Thursday, 28 July 2011

Government support for SMEs

The latest Business Link Newsletter has come round, outlining what the government is doing to support SMEs - in particular in winning business from the government. The news is mixed, and as always with governments of all persuasions contains a mixture of real initiatives, hope, aspiration, spin and the rehashing of existing initiatives as something new.

Large businesses are encouraged to pay smes quickly. This is laudable, but without any real government push behind it is essentially just a wishful idea. Anecdotal evidence is that larger companies are pushing out their payment terms, essentially banking with their sme suppliers, confident that their suppliers are desperate for business. SMEs generally would be happy if their large clients paid on time. Quicker payments would be a real bonus. Quicker than 30 days is probably unrealistic. 30 days exactly would probably be fine for all.

The pressure on major contractors to government to make quicker payments down the supply chain is welcome, but needs some real teeth. When suppliers are dropped for failing to pay sub-contractors they will take real notice. Until then they will pay lipservice until they feel it is safe not to do so. Publishing the data on a website is also to be supported as a general principle, though I am not sure what will be achieved. The public are not interested, and the SMEs already know, and I am not sure that shame will be sufficient. In fact you could argue that the shareholders will be pleased to know that contractors are pushing out payment terms, and therefore increasing their returns.

14 departments have eliminated the PQQ process for low value tenders. This is valuable for SMEs, though as I have argued long and weary a similar benefit could be achieved by all departments using the standard OGC PQQ template for all tenders. Then SMEs would only have to fill it in once. It could even be stored on government servers - as was tried in the One Form initiative in St. Helens. Back in February Robert Peston of the BBC pointed out that eliminating the PQQ process was not a sure fire way to get more competition - see here.

Contracts Finder continues to limp along, and is not really finding traction. The private sector alternative services seem to be able to provide a more extensive service, and so are (if not thriving at least) continuing. The number of contracts published seems low compared to the long standing equivalents in Scotland and Wales. Scotland are trumpeting the fact that their service is now publishing more opportunities below the OJEU threshold than above - which is of real relevance to SMES. It seems like there are lessons to be learned from the existing services.

Contracts Finder has lead to 600 contracts being let to SMEs since February - about 150 per month. Hopefully this will accelerate. The value is over £80m, which means the average contract was for £133 000, or about the OJEU limit. This is fine for some SMEs, but is very large for the smaller SMEs and micro businesses. Real success would be to get that down to, say, £50 000. Then opportunities would be be accessible by even the smallest businesses.

The 9 winners of the government's Innovation Launch Pad Product Surgery competition, out of 350 SMES were able to pitch their ideas to government. Laudable in itself, but why a competition over 3 months to pitch these ideas? Why not a series of Meet the Buyer events which would have allowed all 350 to pitch? The winners look like interesting businesses, of real benefit to the country. However many of them are existing suppliers to the government, and were pitching products that they already sell to the government. Hardly the sort of innovation that we need in these times - they should be being promoted by standard practices. One winner (Learning Pool) has saved the government £30m over the past two years - why do they have to pitch again? Why are they not being rolled out as best practice? More information here. A good idea, but again more needs to be done.

Tuesday, 26 July 2011

ERDF FUNDED consultancy support for Lincolnshire SMEs

SUSTAIN Lincolnshire is offering Small and Medium Enterprises in Lincolnshire help to be more economically sustainable. With the help of PAWA Consulting, Oakwell Management Services Ltd. is utilising a ‘Workbook’ approach to improving control over purchasing expenditure. The Workbook, co-authored by Ray Newell and John Kelly of Oakwell Management Services Limited, Professor Marc Day of Henley Management Centre, (Reading University), and supported by the Chartered Institute of Purchasing and Supply, is a unique and innovative tool, designed specifically to help small business.
The Workbook is an ‘action’ document and is used in conjunction with consultancy support, delivered by expert associates who work directly with the client SME’s. The objective is to improve their purchasing techniques, emphasising economic sustainability to generate real savings for the business, and sharing experiences in a collaborative way.
Initially, the associate consultants visit the customer company and spend a short time with the Managing Director/Purchasing Manager to ascertain where help is required. This diagnosis is used to demonstrate how to improve procurement/purchasing process/s that are identified as ‘in need of enhancement’, and deploying experts for a maximum of two days fully funded consultancy support.
Oakwell are looking for an initial take up in Lincolnshire of somewhere in the region of 40+ companies.
This project is part of the SUSTAIN Lincolnshire programme, which is part funded through the European Regional Development Fund (ERDF), East Midlands Development Agency(emda)Single Programme and Lincolnshire County Council.
This is a great opportunity for Lincolnshire Businesses to obtain sustainable procurement support through Lincolnshire County Councils SUSTAIN project.
The project will help enhance small businesses that have purchasing as part of their daily routine, to make significant savings for their organisation, and allow them to collaborate with like minded organisations.
Eligibility criteria: Small and Medium Enterprises (SME’s) - Businesses of < 250 employees and < 50 million Euros turnover-Annual balance sheet under 43 million Euros, not more than quarter owned by a larger company
The project has a tight delivery horizon and therefore a quick response is critical. The project will finish at the end of September 2011.
Feel free to approach Oakwell, or you can approach me directly if you would like PAWA to deliver your consultancy support.

It is likely that in future there will be few of these fully funded projects, so I would encourage businesses to take the support now.

We are able to offer similar support to smes in the East Midlands, utilising the same workbook for the MATREC project.

PAWA Consulting Facebook Page

PAWA Consulting Ltd. now has a Facebook page - see here.

Currently there are no plans to use this extensively, but rapidly changing information about courses may be posted there as well as at this site.

Tuesday, 19 July 2011

British Science Festival in Bradford 10-15 September 2011

The British Science Festival is coming to Bradford in September - see here for details.

As PAWA consulting I have no involvement with the Festival, but I think it is important to help promote British Science and Technology. And it is relatively unusual for such events to come to Bradford.

Hopefully this event will gain some good media interest, and attract some kids to science as well as explaining science to interested members of the public.

Monday, 18 July 2011

London - Olympics and Ethics

I was lucky enough to come into London Liverpool Street Station from Suffolk, which passes right past the Olympic Park. With a year to say I think it looks great. Very exciting. Hopefully going to be a success.

The local paper is full of the resignation of the Chief of the Metropolitan Police. Regardless of the links to the News of the World, I find it hard to believe that anyone could accept five weeks at a health club without realising that this would compromise their position. A junior officer would surely have been sacked. A very unfortunate error of judgement, even if nothing untoward arose.

There is a role for informal meetings, dinners and hospitality. It builds trust and allows a deeper relationship. Which is both the point and the risk. It can be difficult to know where the line is. 5 weeks at a health club (which is what is reported) is surely a long, long way past that line for anyone in public life or public office. In business, it may be different (though I suspect not).

Friday, 8 July 2011

Project Management Training courses

We now have 3 more dates for the Introduction to Project Management course that I am running for BIP Solutions. They are;
9th November 2011 in London
16th November in Birmingham, and
6th December in Manchester

Venues and further details to follow. The courses will be available for booking on the BIPSolutions website under PASS Masterclasses. The placeholder is here.

The course is not focussed on the public sector, but is widely applicable to anyone who needs to run projects as part of their role.

Thursday, 7 July 2011

British Manufacturing

Evan Davis is making a very interesting series for the BBC, called Made in Britain.
It is often said that British manufacturing can no longer compete with the rest of the world, and that in Britain we do not make anything anymore. This series is showing how completely wrong (and self defeating) that view is.
The first and Second programmes can be accessed here - the third is about services.

A very brief and selective extract is to make the point that Britain is the seventh largest manufacturer in the world. That is hardly "does not make anything". If we accept that the USA and China are numbers one and two, and that Germany and Japan are three and four (at least for the moment) then the best we could hope to be if fifth. Being seventh shows that we are a bit behind where we would like to be - not hopeless. It is like complaining that because as Aston Villa we are not in the Champions League we cannot play football - not true (if we leave the views of Birmingham City fans out of this).

The thing is that once you start to believe this self defeating mantra it becomes self-fulfilling. I have made this point about the UK chemicals industry until people are sick of hearing it. The Chemicals industry is the UK's second largest export - but industry people keep saying it is dead, in terminal decline, not like the old days etc. etc. Of course their business is doing fine, in fact it is growing and they are expanding - but the industry is over, we can't compete..... They practically all say it and end up talking themselves into a pessimistic funk. Heaven help us if the government takes this gloomy myth as reality and acts on it.

One thing British industry needs is to stop running itself down. It is big, successful and there is room for improvement. But it is not over. The people who repeat this ad nauseum have an agenda that Britain is a busted flush. It is not. 7th out of 200 nations is grounds for neither giving up nor complacency.

I look forward to working with more successful British manufacturers in the decades to come.

Tuesday, 5 July 2011

Business Ethics - Bombardier

The railway firm Bombardier is blaming the government for 1400 job loses after losing a procurement process for £3bn for trains for Thameslink to Siemens. The government is saying that their hands are tied by EU procurement rules (with an insinuation it was the previous government's fault for signing up to such rules).

I have some knowledge of the sector, having done some work for ADtranz before they were taken over by Bombardier. I hope and trust that Bombardier have improved things in the intervening 12 years or so, but there were plenty of cost improvements that could have been made at ADtranz.
Curiously ADtranz had a strong presence in Germany, the D representing Daimler, so although the Thameslink trains might have been designed and built in Derby we should not think of Bombardier as a UK company - they are international.

It is unfortunate to that the contract did not go to Bombardier, and the accompanying comments that Germany and Japan would never give a contract to any firm who was not German or Japanese may have some truth - or may not. I don't have any facts to confirm or deny that. However, let us be clear - if the Germans awarded such a contract on the grounds of nationality it would be just as illegal as doing the same here (and Deutsche Bahn is partly government owned so the rules would apply).

Bombardier accused the government (in practice I assume TfL) of "just opening the envelopes" - and then giving the contract to the best bidder rather than a UK firm.

Let us think about that. TfL went out to tender, and took the best bid. We may not like the result, but what can be wrong about that? You may argue about how the specification was written, the process, and may not like the result - but basically Bombardier lost a fair process and would now like us to rig the result in their favour. You can dress it up any way you want, but that is basically what is being asked.

Assuming that we did, what would be the consequences? If Siemens have a better technical element, is it sensible to award a contract to a lower quality bid? Well Bombardier might offer to match Siemen's price - if they can do that, why did they not do it initially? Probably because they wanted to have a higher price. So, we would be rewarding a high bidder. And tax payers money to people who did not put in the best price.

Overseas companies would be put off bidding for UK contracts because after all the time and effort there would be a risk that even if they had the best bid, it would be given to a UK company for political reasons. So competition would drop, and prices would rise - and maybe quality would drop too. UK companies would learn that they do not have to be competitive to win. And everyone would realise that our UK procurement system is corrupt. That is an ugly word, but it is what people are wanting.

If you give public money to businesses who are not the winning bid because you like them more, it is corruption. All done with the best of intentions, but it is what it is. Commercial offers are no longer the determining factors, but how some one thinks and feels about you. We can dress it up with the national interest, but it is really about giving contracts to the firm that you want to. The reasons for which may be because of the UK economy, voters in a key constituency, personal relationships, or little brown envelopes. But make no mistake - you are opening the door, and many people will stroll through and you cannot control what will happen next.

I am very sorry for the people of Derby and Bombardier Transport. But that is not a reason to put aside business ethics - particularly when public money is involved. If they can prove the process was unfair, illegal or corrupt they can appeal against the decision and hope to win a rebid, or to be awarded the contract if Siemens are disqualified. Otherwise, they have to face the fact that they lost and to deal with the consequences. Complaining about it does not help the UK.

Monday, 4 July 2011

Free Purchasing suport for SMEs

Through our partners at Oakwell Management Services, we are able to provide free purchasing consultancy to eligible smes in Lincolnshire through the SUSTAIN programme - click here for details. Businesses will be able to attend a number of seminars but more importantly to have one on one support to help them improve their procurement process.

Our element has to be completed by the end of September, and the number of places is strictly limited, so I strongly recommend signing up as quickly as possible. If for no better reason than that this sort of fully funded project is probably going to become very rare in the future. There is no contribution required apart from your time and committment.

What are the benefits? Well it is always possible that you are doing everything perfectly already, and there is nothing to improve. Generally though we find that there are easy to achieve improvements possible on the bottom line - they may be small in percentage terms, but who does not want to improve their profitability for lalmost no effort? In these difficult times a couple of percent on the profits is always welcome.

Often there are much bigger saving possible with a little effort, and large improvements in risk management.

Fuller details and a launch website will be available in a few days, but if you are interested please call me asap. This project is for companies in the Lincolnshire County Council catchment area - I hope you know whether that includes your business or not.

A similar scheme is being run on a limited basis in the East Midlands, called MATREC and focussing on materials businesses. If you want to know more, get in touch.