BIFM conference: Dealing in trust

Trust – or the lack of – in the relationship between buyers and suppliers was the key area of discussion in the panel debate on procurement on the afternoon of the first day of the conference.

“The key element in the procurement process is trust but it is all too rare a commodity,” said Steve Agg, CEO of the Chartered Institute of Logistics and Transport. “You need to trust each other enough to show your hand and rely on each other.”

Establishing longer-term relationships between buyer and supplier was the key to creating trust and resulted in better value for the customer,  added Alan Soper, MD of Ian Williams. “Best value in procurement doesn’t come from making a different decision every week. Bigger and longer contracts are best.”

But he also pointed out that at the end of every FM supply chain was the person doing the work – the cleaner, caterer or plasterer. “If there are too many contractual layers between the chap who does the work and the buyer, then there will be inefficiencies. Procurement is just a dating agency for bringing people together, not a process in itself.” Soper urged FM professionals to turn the process upside down and focus on the person doing the job rather than getting hung up on the process itself.

Common sense is the key to a successful procurement process, especially in the public sector, argued Paul Franklin from PA Consultancy. “There is lots of red tape, and much of it is driven by lawyers, but if you base the process on common sense and bring in trust then there is potential for lots of value in the major public sector transactions.” Franklin asked the audience whether they thought that as quasi government monopolies such as utilities and railways had to go through the Ojeu process, should this be necessary for the partly-nationalised banks.

Returning to the trust theme, Agg added that trust means leaving the expert alone to do the job. “If we identify particular activities that we want to outsource and we make a wedding with another business, then let’s not try to micro-manage it for the outsourced provider. If we identify an expert we need to manage the process but let’s leave room for innovative thinking and leave them room for manouevre.”

Returning to the marriage analogy, Soper laid the ball firmly in the suppliers’ court. “Better qualified players find a way of getting married, rather than having a one night stand.”