VT Training is the largest training provider in the UK delivering NVQs, apprenticeships and a number of bespoke training programmes
The spend was approx. £3.5 M with over 30 awarding bodies covering a variety sectors. The maximum spend with any one provider did not exceed £700 K and the relationships were transactional with very little efficiency in the administration of paperwork and information associated with approx 20,000 learners. A discount was negotiated with the largest provider but not any others.
With the likelihood of funding cuts and an ever present need to increase profitability there was a need to reduce costs wherever possible and with this category being the one of the higher spends it was highlighted as a priority.
After an initial investigation it was apparent that not only were the direct costs high but there was also a significant cost in the administration of such a large amount of data and paperwork.
The first action was to identify the key stakeholders and understand the history, key objectives and barriers to change. This also helped to establish candidates, who would be likely to form the team to lead and manage changes.
I then set up a competitive tender which had two stages and 5 providers. The first stage requested responses to an outline requirements statement and simple request i.e:
“We recognise the part that strategic partners can play in the ongoing support and opportunities to grow our business and we are therefore requesting proposals covering the Company’s requirements.
This proposal should provide us with an understanding of your company, an outline of how you would provide the services and any innovative ideas you have to support our aim of improving our cost base and growing our business. “
Suppliers were invited to send in their initial proposal and then present this to the steering group which included the business unit MD, Operations Manager, Finance Executive and other operations key stakeholders.
In parallel to this process the key objectives and outputs required by the business were established and agreed by the steering group which formed the basis of the marking of the supplier proposals and was also used to guide discussion at the subsequent presentations.
After considering the initial proposals, the presentations and any subsequent clarifications a short list of providers was agreed and a full ITT issued. This included a requirement to address the following key risks/requirements:
It was also made clear in the tender documentation that this would not be an exclusive contract as the sensitivity of some of the sectors dictated that there would be some niche areas which would need careful consideration prior to any changes.
Responses were received, presentations given and written clarification where needed was completed.
The preferred bidder was then selected using a marking frame which included how the above risks and requirements were addressed including quality, marketability (of the qualification and the joint corporate image), price, business development opportunities, back office support, service levels, customer interface and strategic alliance opportunities.
This proved to be remarkably simple as a result of the key decision makers being involved in the requirements, presentations and selection. This together with a phased approach to any changes in the awarding body kept cost down, avoided customer confusion and gave time to communicate changes amongst the delivery staff.
The turnover with the selected provider grew to over £2.5M in the following 18months which amounted to a 500% increase in volume to that provider.
The benefits were far reaching and included: