Office of Government Commerce
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Nine steps to efficiency savings - OGC launches
The Office of Government Commerce is calling upon public sector organisations to strive for greater value for money from spend on temporary staff to help deliver real, cashable savings. A new guide, Demand Management in 9 steps, sets out a simple suite of measures that can be applied by public sector managers to get greater value for money when considering how to best organise their external human resource requirements.
The new guide shows how demand management can offer extensive savings over the long and short-term. It also offers other benefits, when taking on temporary staff, such as improved business performance, a sustainable workforce and retention of skills and knowledge. Demand management is an approach that helps to ensure an organisation's needs are being appropriately met and that resources are applied in the most suitable way.
Successfully implemented demand management can play a significant part in helping to reach efficiency targets that are part of the government's professional services collaborative category of spend. Collaborative procurement is a key strand of the government's Operational Efficiency Programme (OEP) and a potential £1.1 billion of efficiency savings by 2011-12 from professional services has been identified.
Nigel Smith, Chief Executive of the OGC said:
"As efficiency targets increase, contracting authorities have a much greater need to make sure they are getting the best value for money from the use of their resources, and that includes human resources. It is crucial that public sector organisations also have the appropriate resource, at the right time and the right place, with the right skills and at the right price.
"Demand Management in 9 steps aims to support those within the public sector and challenges their current use and spend on external resources. It shows how the implementation of a demand management strategy can be highly effective in getting greater value for money from our public services."
A copy of Demand Management in 9 steps can be requested from the OGC Service Desk on telephone 0845 000 4999 or email ServiceDesk@ogc.gsi.gov.uk
Notes to editors:
About demand management:
The nine steps to implement demand management, as outlined in the guide, are:
Step 1: Define the approach and create a group of key stakeholders
Step 2: Analyse data and identify opportunities
Step 3: Generate options
Step 4: Select options and complete the business case
Step 5: Design a benefits tracking and recovery methodology
Step 6: Develop a communications plan
Step 7: Implement the changes
Step 8: Monitor and embed the changes
Step 9: Review and consider longer-term plans
Demand management is one approach to ensuring that the business' needs are being appropriately met and that resource and the nature of resource (i.e. not over skilled or more expensive than the market rate) is not being applied unnecessarily. It is not about just reducing contract volumes - it is about ensuring, among other considerations, that when any resources are procured (whether temporary worker, interim or specialist) they are appropriate to meet the current and future needs and objectives of the organisation. In implementing any demand management activity, it is critical to differentiate between the business 'wants' and business 'needs'.
Demand management can either be a relatively 'simple' approach against a specific requirement, or may involve adopting a strategic approach. Examples of the former might include managing the range of job categories available via an on-line catalogue or requiring 'approval' pre-purchase. A strategic approach might include a change of resourcing policy and a link to organisational workforce planning or a critical review of the organisation's needs or a change of the expected outcomes. A simple approach can deliver benefits but it is important to note that in order to achieve greater and sustainable savings and better use of resources, a long term strategic approach should be adopted.
A demand management approach introduces discipline in terms of demand forecasting: understanding which point in the business/ cycle or under what circumstances an organisation may need to use agency workers. A demand management approach will also provide assurance that the right procedures have been followed to meet the needs of the organisation, for example through an authorisation process to confirm that the requirement for an agency worker is valid.
For more details visit: www.ogc.gov.uk/psdm.asp
About the Operational Efficiency Programme (OEP)
The OEP findings published recently show scope for a total of £15bn per annum increased value for money - including projected savings of £7.7 billion by 2013/14 through increased collaboration. This includes possible savings of £1.1 billion by 2011/12 for professional services including the use of consultants. The report recommends structures and tools to help organisations achieve savings, as well as improved accountability and performance management to encourage greater value for money throughout the public sector. For more about the OEP visit http://www.hm-treasury.gov.uk/vfm_operational_efficiency.htm
About the OGC:
The Office of Government Commerce (OGC) is an independent office of HM Treasury, established to help government deliver best value from its spending. The OGC works with central government departments and other public sector organisations to ensure the achievement of six key goals:
- Delivery of value for money from third party spend;
- Delivery of projects to time, quality and cost, realising benefits;
- Getting the best from the government's £30bn estate;
- Improving the sustainability of the government estate and operations, including reducing carbon emissions by 12.5% by 2010-11, through stronger performance management and guidance;
- Helping achieve delivery of further government policy goals, including innovation, equality, and support for small and medium enterprises (SMEs);
- And driving forward the improvement of central government capability in procurement, project and programme management, and estates management through the development of people skills, processes and tools.
OGC provides policy standards and guidance on best practice in procurement, projects and estate management, and monitors and challenges departments' performance against these standards, grounded in an evidence base of information and assurance. It promotes and fosters collaborative procurement across the public sector to deliver better value for money and better public services; and it provides innovative ways to develop government's commercial and procurement capability, including leadership of the Government Procurement Service.
Michael Dunning, Media Relations Manager, OGC
T: 020 7271 1318
M: 07771 815245
OGC Service Desk
Tel: 0845 000 4999