1. 0 UCISA Partnering Framework David E Hawkins PSL Director of Operations Creating the future through collaborative partnering.

2. 1 www.pslcbi.com Building business relationships Background  Formed in 1990 DTI now BERR and the CBI  Assist organisations to develop collaborative relationships for competitiveness  Develop, share, promote best practice Business Relationship Management  Self financing – Not for Profit A Company Limited by Guarantee  18 years of practical experience  PSL communities

3. 2 www.pslcbi.com Building business relationships PSL Executive Partnering Knowledge Network Office of Government Commerce BERR CBI FCO Policy Connect Dept. for Communities & Local Government Dept. for Transport HSE DEFRA Dept. of Works and Pensions One-North-East (RDA) UK Trade & Investment Nuclear Decommissioning Agency MoD –DE&S University of Bath University of Cranfield University of Strathclyde University of Southampton University of Exeter Manchester Business School Oxford Brookes University C.I.P.S. ASAP Tech NATS Fujitsu Siemens Parity British Energy DSGI (Equanet) Cofathec (Gaz De France) DNV Merrill Lynch Frost and Sullivan UKAEA AWE EMCOR British Standards Institute AMEC British Retail Consortium GSL Pfizer Lockheed Martin Alliance Inertial Systems PERA Toshiba BT BAe Systems V T Group PLC TNT Sixt Senate publishing Mott MacDonald Logistics International Oracle CH2MHill EADS Raytheon

4. 3 Adversarial

5. 4 Relationship journey Confrontational Collaborative Mutual Trust Compliant Co-operative Value Creation Co-creating Partnering Copyright PSL 2006

6. 5 Partnering

7. 6 Future Connections 2020 (2007) Much has changed since the publication of vision 2010 and not all for the better. The perspective of 2010 has though been largely realised. Future connections driven by the PSL knowledge network has taken a broader look at the future and the role of relationship management through a series of varying scenarios. The corporate business models and the collaborative enterprise is strongly merging to meet the demands and challenges of tomorrow.

8. 7 Corporate boundary Acquisition Production Processing Distribution Sales Suppliers Price Quality Delivery © copyright Midas Projects Ltd June 2005 The outside in theory

9. 8 Corporate boundary Acquisition Production Processing Distribution Sales Suppliers Price Quality Delivery Management In house contractors © copyright Midas Projects Ltd June 2005 The outside in theory

10. 9 Corporate boundary Acquisition Production Processing Distribution Sales Suppliers Price Quality Delivery Management Contracts External contractors © copyright Midas Projects Ltd June 2005 The outside in theory

11. 10 Corporate boundary Acquisition Production Processing Distribution Sales Suppliers Customers Price Quality Delivery Management Contracts Performance Integration Culture Ethos Commitment CSR Interdependence Trust Outsourcing providers Virtual boundary © copyright Midas Projects Ltd June 2005 The outside in theory

12. 11 Focus Procurement Rationalise spend Consolidate needs Discipline approach Efficiency Zone Market price The Glass floor or Sustainable efficiency

13. 12 Focus Procurement Rationalise spend Consolidate needs Discipline approach Reduce suppliers Enhance processes Transaction costs E-procurement Raise skills Improve negotiation Danger Zone Efficiency Zone Market price Power price Saving Zone The Glass floor or Sustainable efficiency

14. 13 Focus Procurement Rationalise spend Consolidate needs Discipline approach Reduce suppliers Enhance processes Transaction costs E-procurement Raise skills Improve negotiation Exploitation Opportunism Harness change Rising input costs Complacency Reduced competition Market awareness Danger Zone Saving Zone Efficiency Zone Market price Power price Glass floor The Glass floor or Sustainable efficiency

15. 14 Focus Procurement Rationalise spend Consolidate needs Discipline approach Reduce suppliers Enhance processes Transaction costs E-procurement Raise skills Improve negotiation Demand forecasting Frameworks Integrated planning Review specification Collaboration Process improvement Exploitation Opportunism Harness change Rising input costs Complacency Reduced competition Market awareness Forward planning Long term pricing Productivity wins Innovation Investment Reduced overheads Danger Zone Opportunity Zone Saving Zone Efficiency Zone Strategic Zone Market price Power price Sustainable low cost Glass floor The Glass floor or Sustainable efficiency

16. 15 www.pslcbi.com Building business relationships The Importance of Relationships Relationships Peopl e Machine Functional Transactions Information Specifications Inventory Accounting Payment Taxation Security Duties Pricing Procedural Bidding Planning Demand/supply Evaluation Budgeting Contractual Performance Alarms Marketing Renewal cycle Relational Language Law Legislation Visibility Reporting Customer profiles Integration Currency Risk mgt. Emotional Confidence Trust Culture Leverage Negotiations Problem solving Dispute resolution Ownership Motivation Innovation Risk awareness © copyright Midas Projects Ltd January 2009

17. 16 www.pslcbi.com Building business relationships Motivation Power Prestige Ambition Rules Expectations Needs Security Formal relationship Culture Informal relationship Systems Tools Management structure Policies Skills Measures Experience Personality Learning style Relationship Iceberg Process issues People Issues C R A F T

18. 17 www.pslcbi.com Building business relationships  Lack of stakeholder commitment / management support  Lack of strategic direction  Poor up-front planning / partner evaluation  Cultural mismatch  Lack of shared goals / success criteria  Poorly defined measurement (often too many)  Lack of benefit / risk sharing  Hidden agendas  Poor communication  Ineffective blockage resolution mechanisms Challenges

19. 18 www.pslcbi.com Building business relationships British Standards Institution (BSI) together with Partnership Sourcing Limited (PSL) has published the world’s first relationship management specification for creating and maintaining successful business-to- business collaborations based on the CRAFT methodology. PAS 11000 Collaborative Business Relationship Framework

20. 19 www.pslcbi.com Building business relationships PAS 11000 Collaborative Business Relationship Framework Background to PAS 11000  PSL Formed in 1990 by DTI now BERR and the CBI  Mandate to Develop, share, promote best practice Business Relationship Management  1994 Latham Report  1998 Egan Report  1999 Vision 2010  2004 CRAFT programme launched  2005 BSI & PSL initiate development of standard  2006/07 Future Connections  2006 BSI launch PAS 11000  2008 BSI Corporate certification programme  2009 BSI /PSL launch certification pilot  2009 BSI roll out certification programme  Late 2010 Target for BSI move to full standard © copyright Midas Projects Ltd January 2009

21. 20 Football? Rules Teams Duration Languages Cultures Playing fields Kit Ball © copyright Midas Projects Ltd January 2009

22. 21 www.pslcbi.com Building business relationships External collaborators Suppliers Internal departments Customers Collaborative relationship management © copyright Midas Projects Ltd June 2005 Multidimensional relationships

23. 22 External Collaborative benchmark Pan industry Efficiency & effectiveness Resource development Public & Private Sector Consistent platform Risk management Process and systems PAS 11000 Internal © copyright Midas Projects Ltd January 2009

24. 23 © copyright Midas Projects Ltd January 2009

25. 24 www.pslcbi.com Building business relationships C R A F T Collaborative Relationship Assessment Fulfilment Transformation A structured framework for building effective and profitable relationships Awareness Knowledge Internal assessment Partner selection Staying together Exit strategy Value creation Working together

26. 25 1. Awareness © copyright Midas Projects Ltd June 2005 Understanding your objectives C R A F T Awareness Knowledge Self assessment Partner selection Staying together Working together Exit strategy Value Creation Executive sponsor Business objectives Business case Identify focus Initial risk assessment Key individuals Operational efficiency Operational efficiency Market reach Market reach Value creation Value creation Innovation Sustainability Knowledge sharing Knowledge sharing Profitability Improved performance Improved performance What does Success Look like What does Success Look like Business objectives Business objectives Shared Risk & reward Shared Risk & reward Optimization of costs Optimization of costs Expanded capability Expanded capability

27. 26 © copyright Midas Projects Ltd June 2005 C R A F T 2. Knowledge Learning from those that are ahead of you Awareness Knowledge Internal assessment Partner selection Staying together Working together Exit strategy Value Creation Identify drivers Benchmark Knowledge map Strategy Risk management Exit strategy People Strategy & Risk Processes Organisation Business Environment

28. 27 © copyright Midas Projects Ltd June 2005 C R A F T 3. Internal Assessment Knowing your strengths & weaknesses Awareness Knowledge Internal assessment Partner selection Staying together Working together Exit strategy Value Creation Self Assessment Constraints Skills / Processes Appoint leader Partner profile Action plan Hard issuesSoft issues TRUST Objectives Processes Procedures Systems Reporting Resources Management Organisation Leadership Experience Capability Communication Motivation Culture Concerns Needs Enablers Openness Honesty Performance Confidence Risk & Reward Consideration Recognition Understanding the impacts of organisational behaviour

29. 28 © copyright Midas Projects Ltd June 2005 C R A F T 4. Partner selection Finding the right partner with appropriate strengths Awareness Knowledge Internal assessment Partner selection Staying together Working together Exit strategy Value Creation Assess partners Strength analysis MAP assessment Negotiate Select partner Contract Organisational Issues (procedure) Cultural Issues (attitude) Capability Issues (skills) Commitment Issues (focus)

30. 29 A B C D AttributesAbilityAttitude Operational processes are well defined and integrate collaborative approaches There is a high level of experience at all levels focused on effective collaboration There is clear corporate commitment and leadership that cascades throughout the operations There is limited application of shared processes and performance indicators There are individuals at various levels that have demonstrable skills in collaboration There is evidence of successful individual collaborative programmes in effect There are robust internal processes and performance indicators There is appreciation of collaborative approaches but a lack of skills There is appreciation at the operating level of the value of effective relationships Operates with a traditional contract and procedural based approach No appreciation of a practical approach to the value of relationships Only operates a robust and effective arms length contracting approach © copyright Midas Projects Ltd April 2007 rev 1 Maturity Assessment Programme (MAP) Suppliers Executive Staff CustomersManagement Collaboration company culture or sales hype ?

31. 30 © copyright Midas Projects Ltd June 2005 C R A F T 5. Working together Building the right approach Awareness Knowledge Internal assessment Partner selection Staying together Working together Exit strategy Value Creation Governance Partnering Charter Joint objectives Processes /Plan Joint risk mgt. Measurement Contract Objectives & scope Performance Terms Risk & reward Partnering relationship Joint Vision & Values Critical success factors Governance Behaviours Operating practice Manage relationship Exploit knowledge Create value Drive innovation Systems & process Drive objectives Monitor progress Enhance communication Measure performance

32. 31 © copyright Midas Projects Ltd June 2005 C R A F T 6. Value creation Awareness Knowledge Internal assessment Partner selection Staying together Working together Exit strategy Value Creation Define value FIT teams CI Process Innovation groups Staff development Future options Customer Satisfaction ResourcesSpecificationPerformance Total cost profile Cycle time Business processes Value Creation Innovation Creating additional value

33. 32 © copyright Midas Projects Ltd June 2005 C R A F T 7. Staying together Maximising joint potential for the future KPIs Performance Joint exit plan Health checks Dispute mgmt. Joint exit strategy Awareness Knowledge Internal assessment Partner selection Staying together Working together Exit strategy Value Creation Strategy CRAFT alignment Objectives Strategy O.S.A. Strategy TRUST index Strategy Critical Behaviours Strategy Risk register Strategy Dispute resolution Strategy Value creation M.A.P.

34. 33 CRAFT ALIGNMENT Overall CRAFT Alignment = 68.11% Overall alignment between = 88.14% Overall Risk = 20.60%

35. 34 CRAFT ALIGNMENT -Awareness

36. 35 © copyright Midas Projects Ltd April 2007 rev 1 TRUST Index C R A F T

37. 36 © copyright Midas Projects Ltd June 2005 C R A F T 8. Exit strategy Awareness Knowledge Internal assessment Partner selection Staying together Working together Exit strategy Value Creation Set boundaries Monitor change Establish triggers Assess liabilities Mang. Knowledge Review future ReputationTime Knowledge Cost Sequence Strategy Customers Business Objectives Suppliers Competition Recognising the changing market place

38. 37 www.pslcbi.com Building business relationships Focus on Joint Objectives - Yours, Mine & Ours Focus on Dispute Management - don’t hide from it Focus on Dispute Management - don’t hide from it Focus on Exit Strategy - up front & develop jointly Address the eight phases even when the relationship exists C R A F T © copyright Midas Projects Ltd January 2009

39. 38 C R A F T Thank You Dave Hawkins David.Hawkins@PSLCBI.com