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Open book partnering debate: For
Doing it by the Book - Delivering long term savings via open book partnerships
It is generally agreed that improving services to customers requires an integrated approach, delivered cost effectively. But some still don’t see open book as the answer.
Ian Williams’ experience has shown that true integration or partnering cannot be achieved without the central plank in place - cost management. A key way to achieve that without signalling the death of quality customer service nor falling back on a supplier/client relationship is open book.
Open book provides (with some important caveats) cost transparency, and ensures effective decision making. Its beauty lies in its simplicity - by comparison complex procurement and cost analysis models only lead to misunderstanding and dispute. By asking the wrong question such models give clients and contractors no useful answers.
For our clients, well-managed open book means minimising duplication and waste. It gives both parties an incentive to continuously improve and optimises best value. It is for these reasons such a system has the Audit Commission’s backing.
Like any system however if it’s implemented poorly, or in a one size fits all approach, nobody is satisfied. If both parties are unclear about their responsibilities, then value for money suffers. But the same applies for SOR, lump sum and other commercial models. With open book, though, the chances of identifying these flaws early on is enhanced as either party can deliver improvements without recourse to adversarial processes. Poor and inefficient management never delivers, regardless of the cost management approach.
The secret of open book success lies in the detail. Including clauses that protect both client and supplier such as pain/gain mechanisms to encourage good performance or penalise failure, is vital. Partnerships shouldn’t mean losing targets and KPIs under a fuzzy blanket of mutual trust - the obligations must remain, but delivered together rather than in opposition.
Sharing ideas, best practice and financial information is the ideal way to delivering improved service. Closing the door on open book only leads to the customer losing out.
Author of this article
Mike Turner
Development Director for Ian Williams Ltd
This article first appeared in the 2010 bulletin publication.
Read the original publication here
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