08 May 2018 | Julie Jackson
Julie Jackson, managing director at OCS Group, explains how Carillion's fall has highlighted the importance of communication for customers and providers.
Recent events with Carillion really have shaken the FM market. Like many of you, I have worked as a client, a provider and a consultant leading the procurement process and, although I have said more times than I can remember "we are in a race to the bottom", I never expected a large business such as Carillion to end up bankrupt.
If this doesn't force a change in how customers and providers contract I don't know what will. If we can't agree on a different way of working together, there will be more companies going out of business, and just checking your supplier has enough in the bank to withstand low margins while you contract with them won't work.
There has been lots of talk about the need for responsible procurement; that's a good start, but it's not enough.
Ten years ago I read a book called Vested Outsourcing by Kate Vitasek, and as I read, it hit me - this is the answer to the issues we have with our business relationships.
Ever since, I have done everything I can to table 'vested' and raise the awareness of this alternative way of contracting, but also physically working together in a productive and rewarding business relationship.
As the title suggests, the business relationship described is all about each party being invested in the outcome of that relationship. There are six principles: reciprocity, autonomy, integrity, equity, loyalty and honesty. The outcome truly is a 'win/win' as both parties work in a performance partnership to optimise mutually desired outcomes, drive down costs, and improve services with equally shared risk and financial benefits. Can we afford not to try?
My plea to procurement and business development professionals is please investigate vested outsourcing. There are lots of materials available on Google.
Let's find a better way because what we are doing isn't working and responsible procurement isn't enough to create the sustainable business models we need to rebuild our sector and its reputation.
Julie Jackson is managing director, central support and major projects, at OCS Group