Kingston and Sutton Councils operates a Shared Service which is one of the longest established Shared Services dating back to 2014 across the London Boroughs. The service provides services to an additional 13 entities spanning across; Sutton, Kingston, Richmond, Windsor and Maidenhead where support and equipment are provided to circa 5,000 users in total.
Having to support a total of 15 entities across a large geographical landscape with different demands, supplier bases, the Digital & IT Shared Service had a number of challenges to overcome. Some of the challenges for example were; different entities were using different providers, paying different prices and purchasing volumes of supplier recommended equipment which did not always align to the core standard offering the Digital & IT service were working towards.
As a result, the Digital & IT team was spending valuable time managing requests, sourcing quotes, challenging demand and validating prices – meaning it was working in a tactical, admin-based way. The disproportionate effort spent on these simple tasks was unsustainable, especially given the pressure to procure in an effective and efficient manner.
“There was lots of back and forth with suppliers only to find that something was obsolete, out of stock, on back order, or had lead times that were too long,” explained Jason Sam-Fat, Digital & IT Commercial Manager. “Benchmarking involved looking at historical data and comparing quotes in line with our statutory requirements, but we needed a more efficient and accurate way of validating that we were getting good value. Furthermore, we also needed to address the significant unacceptable lead time difference across our supplier base.
Digital & IT Commercial Manager Jason Sam-Fat had used KnowledgeBus in previous roles in both the public and private sectors, and upon joining the organisation in July 2014 recommended it immediately.
Al Nagar, Mercato’s Head of Benchmarking, demonstrated the solution and then prepared a spend analysis of more than 100 commoditised IT products, showing what the councils had paid and the price they should have achieved. This validation exercise revealed savings and overspend in precise areas to focus on – and provided the business case for the KnowledgeBus implementation.
“After we completed the spend analysis, KnowledgeBus value was undisputable. Although value-for-money benchmarking was being carried out in line with the Council processes to ensure best value, the analysis showed considerable scope for improvement, with focus areas to target” said Al Nagar, Head of Benchmarking at Mercato. “We got buy-in from the start,” added Jason. “It was clear we needed a better benchmarking tool which gave us full transparency across the IT supply chain, and we had all the right justification from Al and the Mercato team. KnowledgeBus was very easy to implement – it worked ‘out of the box’, and because it’s a web-based tool, we were up and running very quickly with no set up or fuss.”
The Digital & IT service used KnowledgeBus to conduct a full benchmarking analysis, which demonstrated supplier performance in terms of delivery and cost. Because KnowledgeBus gave visibility of stock levels and prices, staff were able to spend less time on provider communications and basic stock purchased became a simple procurement admin task with much needed delivery lead time improvements. This made it easy to reduce supplier margins as well as deal with suppliers who were defaulting to longer lead times without providing competitive pricing advantages. The team were also able to address legacy products and dead stock being purchased, which futureproofed procurement and the infrastructure we had to support.
Thanks to KnowledgeBus, the Digital & IT service has refocused and strengthened key supplier relationships. “We made a point of showing our providers the intelligence we had and how we now wanted to work across commoditised IT requirements. Over time, our relationships have improved and become very transparent on what is an acceptable margin and where we perceive the value chain to be, in short, we are now able to assess the exact value we are receiving for any applied margins” said Jason.
KnowledgeBus has also enabled the team to identify and avoid deal reg that gives resellers an advantage. This has saved Jason and his team substantial time and money on large tenders.
One of the most recent notable example which delivered significant value was a £1.4 million tender for Chrome units and IT peripherals. KnowledgeBus use was a key to set correct budgets without engaging with the reseller market which would have lead to ‘deal reg’ and stifled any competition during the tender stage.
Knowledgebus was also of great value to understand the various Chrome options lifecycle and sustainability of specific products in the channel, especially as Chrome product does have a shorter roadmap.
The transparent insight provided by knowledgebus did not only help to easily validate the Digital & IT device strategy, the insight allowed them to shape their tender strategy, and led to them working directly with OEMs on purchase prices and margins.
“The price difference in the SKUs was literally pennies from the tender. Usually the range would be considerably greater” said Jason. “This was because there was no deal reg – we didn’t have to engage through resellers to shape our outcome and had the right information to engage with the OEMs on identified risk for the refresh project and drive the quality aspect of the tender much harder for the margin reseller were looking to add.”
They successfully completed the roll-out of more than 4,000 units across multiple sites in just 3 months and having had sight of the channel stock flow pre tender was a major factor contributing to this successful outcome.
This valuable insight allowed for accurate planning and mobilisation as well as leveraging the insight to push manufacturers & resellers harder on areas where delivery commitment was critical in the quality aspect of the tender.
“From previous experience, large roll outs are often delayed due to conflicting views between a perceived realistic roll out plan from a customer and actual roll out from the provider based on actual channel stock flow” said Jason. “Knowledgebus channel stock data helped us create an aggressive roll out plan and use the insight to ensure early manufacturers commitment to meet identified gaps. Without Knowledgebus, I would have expected our roll out to have taken 30-40% longer with the associated greater cost of running the refresh project”
The team has continued using KnowledgeBus to police procurement across business-as-usual spend. Their Hardware catalogue items are in the system, and they get notifications on EOL, EOS and dropping stock levels to ensure they’re proactive in addressing constraints and protecting their lean stock approach. Price forecasts have given confidence for budgeting.
“Not only is KnowledgeBus easy to work with, but Mercato are very responsive to queries. If we can’t find a product on the system, they add them efficiently and promptly – well within the SLA,” said Jason.
The Digital & IT Shared Service achieved ROI on its initial 2014 KnowledgeBus commitment in less than a year based on cost savings alone, and in 2017 the service made a prepaid commitment until 2022 to align with the 5 year end user device contract put in place in 2017 because Knowledgebus is seen as a positive addition to contract manage the Council IT hardware contract.
As the councils define their digitisation strategies, they’re now considering other opportunities for Mercato to offer support.