Significant Weaknesses in Commercial Skills & Expertise

£200billion Government Projects at Risk

Projects, like businesses, often fail because they are not properly managed, and concern is growing over the lack of experienced project managers with the skills and knowledge base needed to deliver the large projects and programmes being planned over the coming years.

A small number of recent headlines;

– ‘The strong consensus has been that the NHS and DH need commercial skills as never before’ – DH
– Out of Control: How the Government overspends on capital projects –
– We must attract, retail and develop talent’ – NHS Employers
– £200bn government projects ‘at risk’ – Computer world

The National Audit Office (NAO) has recently released a report titled ‘Commercial skills for complex government projects’.

The report is part of a series of NAO reports examining the current level of commercial skills and experiences in the Government. The gist of the report encompasses the above news headlines! There is a huge gap in what they term ‘commercial skills’ and expertise of the people running major projects like the colossal NHS National Programmes for IT. Originally expected to cost £2.3 billion over three years, in June 2006 the total cost was estimated by the National Audit Office to be £12.4bn over 10 years and it’s still going! Watch out for this week’s news headlines on NPfIT as Alistair Darling pledges to curb government spending. Will the National Programme for IT be cut?

The government are currently sitting on a value of major project portfolio worth around £200billion! The projects have been deemed at ‘risk’ by the Government themselves.

Key Findings

– 44% of Senior Responsible Owners (SRO) of major projects did not have any substantial commercial experience
– 14 out of 16 departmental commercial directors believe OCG has done little to address skills gap
– 8 out of 16 government departments had effective commercial leadership
– The NAO identifies ‘project management capability’ as a core skill in delivering change

What do they mean by Commercial Skills?

Many PM’s have fallen into the profession of Project Management. Project Management skills are only a very small fraction of what makes a good Project Manager. Other elements include technical abilities, communication skills and commercial awareness.

It is very common for project managers to have worked managing internal projects, therefore never having a formal contract, having only informal reporting procedures, no external communications or interaction with customers, suppliers and third party partners and so forth. Therefore, they have never had the change to actually develop these imperative commercial skills.

These commercial skills may incorporate;

1.Client focus
2.Market/industry awareness
3.Financial awareness
4.Business focus
5.Risk management

Commercial Awareness according to the University of Liverpool is, showing that you can;

– contribute to an organisation’s goals by recognising, utilising and creating opportunities
– demonstrate an understanding of what is happening in the sector understand how workplaces and organisations are structured
– understand the nature/requirements of a job display financial awareness
identify, implement/monitor idea development
– interpret data presented in a numerical or graphical format

Back in June 2009 Arras People were awarded Approved Supplier Status from NHS PASA (now merged with OCG Buying Solutions). The Commercial Resources Framework was developed, available to the DH and all NHS organisations seeking Commercial Resources. Arras People is a supplier on this framework. In theory this means a supplier on a list available to the NHS/DH recruitment staff supplying competent, qualified, commercial resources. A company on this list with 100% sole focus on Project and Programme Management. Perhaps if this framework was of more prominence and people were truly aware of it, if it was actually utilised and supplier were engaged maybe, just maybe there would be less skill shortage?

It seems bizarre that with such a skill gap in the public sector this framework is not helping people to solve the problems highlighted in the report and help overcome employee skill shortages. I hate to ask but do staff know this CRF framework exists and aims of why it came about, do NHS staff know it is available to them?

Let us know your thoughts.