Awarded success Story with the Dunedin City Council
The Dunedin City Council won an award for Outstanding Cooperation & Collaboration at the 2023 World Commerce and Contracting (Asia Pacific) Innovation and Excellence Awards – Congratulations to both the team and the new partner!
Dunedin City Council, New Zealand, www.dunedin.govt.nz
The Dunedin City Council won an award for Outstanding Cooperation & Collaboration at the 2023 World Commerce and Contracting (Asia Pacific) Innovation and Excellence Awards – Congratulations!
“ I’ve awarded many, many contracts, but I’ve never been hugged by a vendor at the end of it, when I told him that he won the contract. That tells you something. ”
The award was for a Lean-Agile Procurement (LAP) process the Dunedin City Council (DCC) undertook to source a Contract Lifecycle Management System, and the outstanding way DCC and the successful vendor/partner, Portt, collaborated through the lean-agile process to achieve their goals.
Procurement at Dunedin City Council
The Dunedin City Council represents the people that live in Ōtepoti Dunedin, New Zealand. The DCC’s purpose is to enable decision making by and on behalf of communities, and to promote social, economic, environmental and cultural wellbeing.
Public dollar spend makes up a significant proportion of the NZ economy, including spend from local government organizations like DCC. The DCC has an important responsibility to ensure it spends rate payers funds prudently through its procurement processes – in an open, transparent and accountable way. DCC follows the NZ Government Rules of Procurement. When procuring Goods or Services, they use the NZ Government Electronic Tendering Site (GETS) to list all open market tenders. This site enables registered users to electronically review and respond to all current open market tenders being conducted by the Council.
One of DCC’s procurement rules is that procurement with a cumulative value of over $100,000 requires an open and competitive process, which typically takes over three months.
Why Dunedin City Council used a Lean-Agile approach
Previously, DCC had faced challenges sourcing Software as a Service (SaaS) through a traditional open market Request for Proposal (RFP) approach, with a few complex SaaS contracts resulting in vendor/partners that could not deliver on requirements.
The DCC was going through a Contract Management improvement project, which included sourcing a Contract Lifecycle Management (CLM) system and wanted to ensure the same situation did not occur again as with previous SaaS procurements. This was a strategically important project for DCC, and therefore success was paramount.
It was important that the CLM system sourced met the Council’s requirements to ensure the success of the wider Contract Management improvement project.
When DCC was looking for a way to maximize the success of the procurement process to ensure the right outcomes were achieved, they began looking into the Lean-Agile Procurement approach as an option.
Dunedin City Council’s Lean-Agile Approach
To source the CLM system, DCC decided the contract was complex enough to use a Lean-Agile Procurement approach.
DCC undertook a two stage procurement process.
Stage one was an open market Registration of Interest, using GETS(fn). This was done for two reasons:
1. To comply with DCC’s Procurement and Contract Management Policy.
2. We didn’t know what we didn’t know and didn’t want to miss out on new or emerging technology that we hadn’t uncovered through our market research (aka we had FOMO!).
Following stage one, DCC shortlisted three vendor/partners for the second stage of the CLM Software procurement.
Stage two was a two day workshop ‘Big Room Event’ utilizing Lean-Agile Procurement techniques. As it was DCC’s first Lean-Agile Procurement process, we engaged Ross Darrah from Pareto Toolbox, as an expert in LAP, to assist and coach the DCC team through the process.
Image source: Dunedin City Council - DCC and Pareto Toolbox presenting to Lean Agile Procurement Canvas during the DCC LAP Process.
It was acknowledged that LAP was a new process for vendor/partners and DCC stakeholders, and particularly as this was being conducted in a public sector environment, probity was absolutely crucial. The DCC team and vendor/partners were therefore coached and fully briefed on LAP, to ensure full understanding of the process and to give confidence to all stakeholders and vendor/partners that they were involved in a ‘safe’ process which was fair, transparent and complied with required public sector regulations and probity standards.
The DCC team fully embraced the LAP process and focused during the two days on getting to know the shortlisted vendor/partners. It was important for DCC to understand how the respective vendor’s approach would work for DCC and the capabilities of their CLM solutions.
During the two days of the LAP process, DCC and shortlisted vendor/partners approached the event as an opportunity to start building the relationships.
Business Outcomes Achieved using the Lean-Agile Approach
In adopting a Lean-Agile Procurement approach, DCC achieved accelerated decision making and cut down the time and cost required for vendor/partners to do business with DCC. It also enabled strong relationship building between DCC and the successful vendor/partner – setting a solid foundation for the delivery of the work.
Image source: Dunedin City Council - Serge Kolman, DCC Procurement and Contracts Manager presenting to vendor/partners on day one.
The CLM solution was delivered on time and within budget. The success of this contract can be attributed to the innovative procurement approach, effective project delivery, and the willingness of DCC staff to try new ways of working that benefit DCC, its vendor/partners, and the Dunedin communities they work for.
There were some doubts voiced by vendor/partners prior to the event, as this was the first Lean-Agile process DCC and the vendor/partners had participated in. However, the feedback from staff and all vendor/partners involved was overwhelmingly positive - even from the vendor/partners who were not successful!
Key Learnings, Tips and Takeaways
Investment Logic Mapping
Once the CLM software contract was awarded, and as part of the implementation phase, DCC undertook an investment logic mapping (ILM) process with the successful vendor/partner, Portt.
The ultimate aim of the ILM process was to get to the core of the problems we are trying to solve by developing problem statements and identifying the benefits of solving those problems.
Image Source: Dunedin City Council. - Natalie Strong, DCC Procurement Advisor and LAP facilitator updating the LAP canvas during canvas review with DCC staff and shortlisted vendor/partners.
DCC found this process valuable, and they would in future undertake an ILM exercise with key staff and stakeholders before they went through a Lean-Agile Procurement process, as this would inform the canvas (true north) and User Stories by developing problem statements and can be used to measure success of Lean-Agile process.
Working with Vendor/Partners to solve Problems
DCC found it very valuable to have the ability to talk through issues and challenges with vendor/partners, who then demonstrated how they could help solve these problems in real time.
Two Days vs Three Days
DCC felt like they would benefit from one more day, to feel less rushed.
A great outcome can be achieved by doing a Lean-Agile process in two days, but DCC felt like they would get a bit more out of the process if an extra day was included.
Online vs In-Person
Lean-Agile Procurement works best with people in the room, online presence is fine but to be really successful DCC found that physical presence was best.
Tips for other Procurement Leaders
Embrace the process. DCC have found Lean-Agile Procurement to be a really useful tool to have in the procurement toolbelt for the right project.
Ensuring you engage early with decision makers within your environment is essential to the success of the process. Engage early to enlist the support you need (including from decision makers with financial authority) and to enable and achieve the full benefits and potential of a Lean-Agile process.
Time Management & Peer Feedback
A key learning from the Lean-Agile Procurement event was the importance of time management. As already stated, there was a lot to achieve in two days, meaning that sticking to agreed timeframes was of utmost importance. To mitigate this challenge, we ensured that vendor/partners were clear about timeframes up front and this was reinforced throughout the event. In addition, vendor/partners (and DCC stakeholders) were kept on time by using a timer and alarm. This ‘refereeing’ of the event ensured that the time was maximized.
The strict keeping of time added an additional benefit. It ensured there was sufficient time to provide immediate feedback to vendor/partners to ensure they knew where they stood and made the event a success. This also ensured respect was given to vendor/partners, that is they were held to time but they were provided with feedback on where they needed to improve.
AirFrance KLM - How to Outsource a Critical Project with Lean-Agile Procurement
With a challenging six-month time frame, Air France looked to a new innovative approach to procuring the right team for the job.
Air France KLM Cargo Operations needed to improve the efficiency and productivity of its door-to-door cargo. Time is essential in freight and any delay or break in the chain would lead to product waste and unhappy customers. It was critical that a new system was created to improve the efficiency.
A new booking system was required within six months, how were Air France going to assemble a team that worked cohesively and remotely, thought innovatively, understood the cargo industry, and produce the product within the challenging time frame.
With a challenging six-month time frame, Air France looked to a new innovative approach to procuring the right team for the job.
Air France KLM Cargo Operations needed to improve the efficiency and productivity of its door-to-door cargo. Time is essential in freight and any delay or break in the chain would lead to product waste and unhappy customers. It was critical that a new system was created to improve the efficiency.
A new booking system was required within six months, how were Air France going to assemble a team that worked cohesively and remotely, thought innovatively, understood the cargo industry, and produce the product within the challenging time frame.
Key Points
Challenges:
Critical project with potentially high business outcomes
Short time frame
Keeping a high level of cooperation with an outsourced team in a remote location
Remodel the vendor sourcing policy
Results:
Six weeks to select a vendor and actually start the project
Accelerated project start: team building already done and new team already well aware of the business context and challenges
Challenging milestones easily reached
A key player in the air cargo industry, AIR FRANCE KLM MARTINAIR Cargo is the specialised air cargo business of the Air France KLM Group, offering a worldwide network of 457 destinations from two hubs, Paris Charles de Gaulle and Amsterdam Airport Schiphol.
The recording
To hear Frédérique’s talk jump right to 31:17 in the video.
The slide deck
End of 2018, Frédéric was facing two major problems:
Deliver a new critical IT application for Cargo Truck management within a tight schedule. High importance – vital the Cargo Truck management system was efficient to reduce waste and increase output.
Recruit a new team to develop the new system. The existing team consists of many contractors from different vendors. It is not big enough to handle the project and there is a need for new skills.
The Team - Air France KLM Cargo Operations Department
Frédéric Jacques, Head of Cargo Operations IT
Simon Spoor, Frédéric’s Business counterpart (acting as Product Owner)
Eric Chaumette, Head of Managed Delivery Centers initiative
Sophie Durand and Lionel Massiera, Agile Coaches and LAP specialists
According to the new Air France procurement policy on hiring contractors, Frédéric would have to source a whole team, remotely located on the vendor’s premises.
Air France Cargo department has been working in an agile way for years (SAFe): how would a brand new remotely located team fit in? How would they quickly reach the necessary level of cooperation?
Time was of the essence and following the current procurement policy would have taken several months. Frédéric’s business counterpart, Simon was really concerned with this issue and couldn’t believe that sourcing a new team would fit in the challenging project schedule, given that traditional RFP (request for proposal) processes usually lasted several months a new way of thinking was needed.
Congratulations & Thank you!
Congratulations to the whole AirFrance KLM Team and our LAP Trainer Sophie Durand & Lionel Massiera. Furthermore we also wanna give a big thank you to Emily Ruffle from the Agile Business Consortium how made the interviews, crafted this success story and co-published it to spread the word.
Rolling out Lean Agile Procurement at BNP Paribas: A retrospective.
GUEST Blog Post: We’re proud to co-publish and share with you a very honest retrospective by Reeve Randriamananjara rolling out Lean-Agile Procurement at BNP Paribas. He described his journey from being infected by the LAP virus in one of our public workshop, over convincing his stakeholders at BNP Paribas to actually executing a first pilot. Thanks so much for sharing your story and we’re keen on your further developments with LAP@BNP Paribas :-)
GUEST Blog Post: We’re proud to co-publish and share with you a very honest retrospective by Reeve Randriamananjara rolling out Lean-Agile Procurement at BNP Paribas. He described his journey from being infected by the LAP virus in one of our public workshop, over convincing his stakeholders at BNP Paribas to actually executing a first pilot. Thanks so much for sharing your story and we’re keen on your further developments with LAP@BNP Paribas :-)
The training
1 March 2018: Snowstorm in Switzerland. All planes going to Geneva had been grounded. Luckily my plane was heading to Zurich. However I only had confirmation that I was going to fly a couple of hours before the check-in at Brussels airport. From Basel, I had to take the train to Rotkreuz, home to the pharma giant, Roche. Rotkreuz was also where my one-day Lean Agile Procurement training was going to take place on the following day. But what was I exactly looking for?
Well, I was on a mission to challenge myself and take my 15-year IT procurement experience to another level. For over a decade, I had always been facing the same challenge: lengthy sourcing processes (request for proposals or RFP's, that is), poor alignment with project teams and, occasionally, conflicts with the vendors around the signed contracts.
There was a permanent debate between us, buyers, who demand that our IT colleagues wrote down 100% of their requirements as a condition to send out an RFP. My colleagues, on the other hand, needed a fast sourcing or procurement process, seeing it as necessary pain. Something was structurally wrong and it was high time we changed our ways. This is where I had decided to embrace Lean Agile Procurement.
What is Lean Agile Procurement?
"I took a speed-reading course and read War and Peace in twenty minutes. It involves Russia.” - Woody Allen.
As Woody says it, Lean Agile Procurement is difficult to put in a nutshell.
It is an Agile procurement or sourcing framework that allows businesses to find solutions for complex and/or strategic IT projects; complex as in "we don't know what our customers want exactly and there isn't an off-the-shelf piece of software for that".
What it takes is a clear vision and part of the required features. More importantly, Lean Agile Procurement vows to reduce the time it takes to search, find and select the most appropriate vendor for a project. It claims to do so in days or weeks instead of months. And that's bold!
Lean Agile Procurement basically merges the RFI (request for information), RFP and contracting processes in a couple of daily workshops with the vendors. It invites people on either side of the negotiation table to fully cooperate by being transparent, focused and bringing the right people around. Last, the canvas is Lean Agile Procurement's keystone.
The framework is heralded by the folks at Flowdays. Mirko Kleiner tirelessly preaches all over the world. Interestingly Mirko doesn't have a buyer profile at all.
Complex projects have the following features: Those who sponsor them take strong commitments vis-a-vis the top management who, in turn, take commitments with the market and customers. Additionally innovation is the bottom line. So there is a huge constraint and expectation in marketing the right output the sooner the better. If either the deadline is missed or the deliverable is of poor quality, your competitor will move ahead and the organization will be left behind dealing with project cost overrunning, litigation with vendors and more stress on extended project team members to fix things.
Lean Agile Procurement promises to satisfactorily address the issue. Yet, to paraphrase the definition of Scrum: Lean Agile Procurement is simple to understand and difficult to master.
What Lean Agile Procurement is not or can't do
Lean Agile Procurement is not a miraculous therapy for dandruff, stinky armpits and smelly feet.
It isn't advisable if the product or service you are looking for is neither complex nor strategic. On the contrary, using it for everything will be counter-productive for your organization.
It can't be the last resort to hastily shortcut procurement processes for ill-thought projects.
It takes a huge toll on your workload; meaning that all other topics will have to be postponed until the process is done. Believe me when it is, all other topics will pop up again and hit you hard.
If Agile values and principles are neither fully understood nor shared nor trusted, don't go for it. You will end up perverting the system and cutting corners.
So now, how did we do for our first project?
Finding candidate projects
Once I have received my Lean Agile Procurement certificate, I was full of hope and eager to implement the method as soon as possible. I quickly identified a first project in the same month. Of course, the project team was in a hurry and they asked me to advise on the best sourcing approach. I gave them the choice between the classical RFP and the experimental Lean Agile Procurement. They shrugged off the latter and eventually opted to stick to the standard process. Eventually, 8 months later, the RFP was dropped. What a disappointment.
Later in October 2018, a colleague asked to brief him about the standard procurement process and lead times for a strategic project. I told him to start filling the Request for Information (RFI) template documents with his requirements. I also warned him that it may take up to 6 months to have a contract ready for signature. He shared my warnings to the project team members. One of them called me back asking me if there was a way to make it in 2 months because they had to select a vendor by end of December.
So I took a poker face and told her quietly that I had a solution. The only trade-off I requested was everybody's full availability and dedication during those 2 months. And it worked.
From my initial procurement plan…
Initially my plan was:
Send out a concise RFI with our vision, a description of our project, what we are looking for with a handful of requirements and leave the vendors 2 weeks to reply.
Analyze the answers and shortlist vendors for the workshops.
Invite the shortlisted vendors to come and attend a 1st workshop and share their questions with us and their competitors.
Prepare the Lean Agile Procurement canvas in order to share it with the vendors during the 2nd and 3rd workshops.
Invite all shortlisted vendors to come and attend a 2nd workshop and start collaborating using the canvas as the guidelines for the negotiations. The draft of contract would also be filled in. At the end of the day, we would share our feedbacks with the vendors and shortlist a few (i.e. 1 or 2) for the 3rd workshop.
Invite the shortlisted vendors to come and attend a 3rd and last iteration of the workshops. Again feedbacks to the vendors right at the end of the sessions.
Submit our vendor recommendation to the steering committee and confirm the award to the selected vendor.
Sign the contract and kick the project off.
… to our final procurement plan.
This is what we eventually did:
We wrote a 6-page RFI. The project team felt more comfortable with annexing a spreadsheets that contains requirements such as a fair list of features, a high level project, technical, operations, legal, commercial, ethics and vendor due diligence (i.e. financial risk assessment).
We elaborated an RFI balanced score card for the requirements we have listed. The format I have suggested has been discarded in favour of an old one everyone else was comfortable with.
We invited all vendors to attend the 1st workshop. However we didn't anticipate that vendors wouldn't speak their minds as they were surprised to find each other in the same meeting room!
Broadcasting the Lean Agile Procurement canvas received a lukewarm welcome among the team. In other words, nobody wanted to leave it in the clear. So we used the RFI score card structure as the guideline for our negotiations.
We held one workshop per vendor. The project team thought it was disrespectful to vendors to have them all in the same session and do a beauty contest. This was obviously more exhausting: Instead of one day with all vendors, it was a full week of 4-hour workshop with each. Also our legal team didn't wish to participate leaving the contracting as the last step of the process. As I expected it, this added another two intense weeks after the December deadline.
The last workshop worked well but was equally demanding.
There were a few requests from the steering committee that led to an extra-negotiation over the phone and via e-mails with the selected vendor. I expected this so no specific issue there.
The contract negotiations added some delay but it was great to see that those who participated to the workshops earlier on either side were perfectly aligned. So two weeks to close a contract in a fair constructive way wasn't bad at all.
The check list for success
Here are my recommendations for a successful Lean Agile Procurement:
Ensure people are available and focused during the workshops. This is a strong prerequisite. This entails everybody to be in the same place and participate (no multitasking).
Prepare sufficient training and communication for the people who will be involved.
An reciprocal non-disclosure agreement (NDA) is compulsory as usual. Your organization must have a template available. Note that a vendor that is too picky at NDA stage must be discarded. It is usually a bad sign.
Keep your RFI content concise. 5 pages are recommended. Sentences must be clear and short. Avoid unnecessary (procurement and legal) jargon.
The canvas is a must. It is difficult to draft if your mind is unclear. If you can't fill then you are neither ready to share your vision and objective nor ready to engage in a transparent and constructive conversation with the vendors. All your organization project documents must serve as annexes to the canvas.
People (including all vendors) must be in the same room. Forget concerns about a vendor stealing new features from their competitors and releasing it fully-tested by the time the RFP is awarded. It is very unlikely to happen.
The sponsors must participate to the workshops. They can't just be the "second negotiation table behind the scene" acting like the hidden puppet masters of the negotiations.
Brief your project team members that they have to be very demanding with the vendors. Similarly, prepare them to be equally put on the grill by the vendors. Gone are the days where the mighty client knows it all and the vendor just executes.
Still, it is acceptable not to have all vendors attending the same workshops. Keep in mind that this is more exhausting and vendors will attempt to regain control over the process by playing the game they know (i.e. the sales rep running the show and the other guys remaining silent for 4 hours).
A 4-hour long demo is the best basis for the workshop interactions. So request your vendor to come ready. The canvas will be filled in by the buyer and the sales person.
The inputs of the workshops must immediately fill the annexes of the future contract. So again, have the contractual structure ready and shared. Leave the main body of the contract to the lawyers though.
Lessons learnt and achievements
Lesson #1: Don't assume that those who blame lengthy procurement processes are ready to change them and adhere to Lean Agile Procurement.
Lesson #2: Use the project's time constraint as an advantage to market the Lean Agile Procurement method internally.
Lesson #3: Keep in mind that anything in Agile can adapt and improve. So procurement dogma don't always apply here.
Lesson #4: Vendors are wary of their competitors. You have to factor that in when explaining the process and the project. Keep reminding them what the process is good for.
In just one attempt, we managed to reduce to procurement lead time from 6+ months to 4 months. 1 cumulated month was sufficient for all workshops and contract negotiations. Also, Lean Agile Procurement has demonstrated that the Procurement department is a trusted partner for ambitious projects. To my surprise, we received very positive feedbacks from both sponsors and… vendors. And the word is spreading around faster than expected.
Conclusion
I reckon I did find what I was looking for when I attended the Lean Agile Procurement training on a snowy day in Switzerland. So I will keep pushing. You might try it too.
For more information about Lean Agile Procurement, get in touch with Flowdays (https://flowdays.net/en/home) (https://www.lean-agile-procurement.com/#home/comparison).
From more information about Scrum (an Agile framework), read the Scrum guide (https://www.scrumguides.org/docs/scrumguide/v2017/2017-Scrum-Guide-US.pdf)
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Original source of the blog post:
https://www.linkedin.com/pulse/rolling-out-lean-agile-procurement-retrospective-randriamananjara/
