business enablement through next-gen technology procurement … · 2020. 9. 1. · where clients...

Business Enablement through Next-Gen Technology ProcurementThe Joint Solution Design Approach

Business Enablement through Next-Gen Technology Procurement | The Joint Solution Design Approach

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The challenge for procurement

Organisations are keen to adopt emerging and disruptive technologies like artificial intelligence, DevOps, robotics, automation, and big data to enable new opportunities, improve efficiencies and deliver cost savings for their businesses. In order to reduce time to market, enterprises are evaluating options to build these capabilities through partnerships. While there is a good understanding of the outcomes expected, a lack of detailed requirements to satisfy procurement scope is holding them back. The challenge which most procurement functions face is how to transform their procurement model and base it on business objectives rather than technical requirements, thereby ensuring rapid business enablement.


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Next-gen technology procurement

Traditional RFPs are most effective where buyers know exactly what standardised services they need, in effect, telling the market. Primary procurement categories include transactional enterprise technology services (e.g. IT service desk, desktop and infrastructure support) as well as large enterprise systems/platforms (e.g. core banking platforms and policy administration systems), where business requirements are clear and sufficiently detailed.

Where clients need solutions to new and complex business needs, collaborative Joint Solution Design is used to design the service with internal business owners and supplier(s), in effect, asking the market and work with the suppliers to arrive at a preferred solution. Joint Solution Design is Deloitte’s preferred approach to evaluating partners with the aim of driving change through technology innovation and solving business challenges with limited/no precedence.

Key selection factors RFP (buy-side specification) RFP (sell-side specification) Service design approach

Solution characteristics

• Buyer knows exactly what is needed

• Market provides standardised solution

• Buyer knows broadly what is needed (required outcomes)

• Market offers competing but largely standard solutions

• Buyer knows key outcomes required (e.g. Digital Strategy tenets)

• Immediate solution is not obvious or is complex

Methodology • Standard specification sets • Standard RFP process

• Standard specification sets • Standard RFP process • Market data informs

• Requires solution frameworks, subject matter expertise and empowered decision-making to execute

Organisational skills required

• Procurement SME • Basic costing and pricing

• Management SME (assess trade-offs)

• Advanced modelling and analysis

• Advanced project management, SME (commercial, technical, functional), modelling and analysis

Information required • General supply market and solutions knowledge

• Market trends and pricing

• Detailed supplier knowledge • Trends, pricing and transaction insights

• Deep market intelligence • Industry research • Technology strategy and roadmap sufficiently developed for solution framework

Traditional (Transactional) approach Joint solution design approach


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Deloitte’s joint solution design approach

At the core of Joint Solution Design is a series of collaborative workshops, where supplier solutions are proposed and refined. The workshops are run with two or more short-listed suppliers to provide competitive tension. Joint Solution Design begins with a set of high-level business outcome statements and a set of outcome-based requirements. Based on these inputs, supplier solutions are proposed and refined through workshops, which eventually result in a set of documents (e.g. work packages or service descriptions) suitable for inclusion in the final contract.

Our Joint Solution Design approach focuses on flexible requirements management and ongoing solution documentation, iterative development and evaluation of solutions along with clear technology strategy and cost boundaries to avoid “gold-plating” solutions. It requires that key client stakeholders are engaged during the supplier selection process to gain their buy-in.

• Destined high-level architecture

• Business outcomes • Outcome-based requirement

Inputs • Signed contract • Scoping and planning documents

• Implementation plan

Outputs

EOI

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Collaborative workshops


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Advantages

Having leveraged the Joint Solution Design process successfully with clients across different industries, we are able to simplify procurement when technical requirements, or process detail is not well known. The aim is to leverage the technical expertise of the supplier, rather than the buyer to develop requirements. For a financial services client looking to transform their legacy telecommunication network to Software Defined Network (SDN), Deloitte leveraged its Joint Solution Design approach to develop the future state and select the SDN product portfolio.

Clients appreciate the focus on business outcomes, rather than technical details and the flexibility offered to allow adoption of innovative solutions, as well as emerging technologies. Suppliers appreciate that they don’t need their teams spending weeks drafting RFP responses and are able to bring in their subject matter experts to collaboratively design the solution with the clients. For another financial services client, Deloitte led the partner selection process for its Anti-Money-Laundering practice facilitating rapid down-select to a preferred partner within eight weeks rather than an initial estimate of six months.

While Joint Solution Design has its advantages, it requires high engagement and may have relatively higher associated costs as compared to traditional outsourcing. However, if done right the benefits far outweigh the investments.


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Complexities and risks

Suppliers may not be familiar with the process or may be worried that their competitive advantage or intellectual property will be shared with their competitors, which could result in a lack of commitment and participation. It is imperative that any supplier’s intellectual property is safeguarded during Joint Solution Design sessions. For a public sector client procuring in line with Probity guidelines, the Deloitte team ensured that the information provided to/requested from suppliers did not compromise their intellectual property while supporting and guiding the suppliers through briefings and information packs throughout the process.

Procurement of complex technologies may require more than one supplier to collaborate with the client to develop the solution. This will require information to be provided to the suppliers involved in a way that is fair but doesn’t stifle innovation. This scenario presents unique challenges which are addressed by Deloitte brokering conversations between the different teams. We managed this with a state-owned passenger rail company through providing answers to questions and clarifications of assumptions to both suppliers that were not deemed to be commercially sensitive.

Depending on the number of unknowns in the required solution/capability, a proof-of-concept may suffice with an investment made by the suppliers. However, if the number of unknowns is high, there may be a need for the client to have the supplier conduct a ‘discovery’ phase to better understand the client’s environment and detail the requirements. For an insurance major, the Deloitte team leveraged the ‘discovery’ phase to finalise the requirements of their Policy Administration System.


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ConclusionEmerging technologies can enable new opportunities and offer many business benefits. These opportunities and benefits can be strongly influenced by the client’s sourcing strategy. Organisations that want to take advantage of emerging technologies should consider Joint Solution Design as a part of their sourcing strategy.

Deloitte distinguishes itself from other organisations through a standardised and repeatable process refined through supplier and client feedback, reusable artefacts and trained technology sourcing professionals who can accelerate this journey for their clients.


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Contacts

Kamalpreet (KP) Sawhney

Director, ConsultingTechnology SourcingMobile: +61 (0) 469 758 912E-Mail: [email protected]

Price Strader

Principal, ConsultingTechnology SourcingMobile: +61 (0)402 891 591E-Mail: [email protected]

Colleen Gordon

Partner, ConsultingNational Lead, Technology SourcingMobile: +61 (0) 423 715 390E-mail: [email protected]

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business enablement through next-gen technology procurement … · 2020. 9. 1. · where clients...

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