Get Ready for ESIF: Build your Supply Chain

With just over a month to go until the European Structural & Investment Funds (ESIF) opportunities are due to be released, lead bidders should be building strong local supply chains in their target Local Enterprise Partnership (LEP) areas.

It is just over 6 weeks until June, when the ESIF opt-in organisations are due to start releasing opportunities. If you work in business development then say farewell to lazy summer days in pub beer gardens, and hello to late night working and dinner at your desk (or tea if you live north of Watford Gap). It does not have to be this way, of course, and you are no doubt starting to plan to get ahead.

Committing resources early to a bid project is usually an uphill battle: trying to get your organisation to focus on an opportunity that is ill-defined and might not happen usually results in a lack of commitment. But there are good reasons why your organisation should be starting to build your local supply chain in your priority target LEPs now.

Five reasons to start building your supply chain for ESIF

1. Get a competitive edge

Identifying the strong existing delivery organisations in your target LEPs will bring knowledge of the local infrastructure, local expertise, understanding of what works and why. Take youth services as an example, the local authority services and structures that exist for young people in New Anglia LEP are wildly different from those that exist in Heart of the South West LEP. The LEP priorities differ too. Good local providers will have been involved in shaping or responding to these changes and differences. Getting them engaged will give you that competitive edge you need to win and deliver real social impact.

2. Get a stronger model: innovation and cost reductions

If you are planning to subcontract a proportion of your service, either geographically or based on service components, then it makes sense to involve your supply chain in designing your model. This is where you will get the innovation that will help you stand apart - those crucial win themes and "nuggets" of genius.

The more time you have to build your subcontractor relationships, the less uncertainty (and therefore risk) involved in pricing. Subcontractors will have time to clarify what is required and what support you will give them, to discuss areas of risk and proportionate responses. If your supply chain is rapidly formed then it will usually build a risk premium into pricing at several points, making you less competitive.

3. Get a better supply chain

This is a bit of a no-brainer, but the more time you allow for supply chain development the better it will be. You will be in a highly competitive situation in most LEPs, where good local subcontractors will be courted by all bidders and most potential subcontractors will have upwards of 10 or so lead bidders to choose from. They are in a similar situation to you - lots of uncertain opportunities and limited resources to commit to them - so starting early will help you to:

  • Engage a wider range of subcontractors, giving you a greater pool to select the best from;
  • Create time and space for subcontractors to inform and co-design your delivery model;
  • Avoid price competition: With a better understanding of each other's positions, and clearer understanding of the financial risks, you will better be able to justify the funding and terms you are offering subcontractors. The worst case scenario is having subcontractors turning you down because you are offering £50 less per outcome than your rivals.

4. Get specialisms, local knowledge and additionality

Starting early also helps you to get three really powerful ingredients to your ESIF bids:

  • Specialisms: Organisations that specialise in things that you currently do not. It takes time for you to understand and then integrate services in an effective way, but getting it right could bring you visibly closer to the Holy Grail of integrated pathways from social exclusion to thriving social inclusion.
  • Local knowledge: Local subcontractors spend their lives delivering in and around the chosen LEP. What they might lack in some areas they will make up for in local knowledge. "The Council wants all services to co-locate in their £2m youth centre, you say?" Perfect.
  • Additionality: The Carlsberg of social impact. ESIF must always be additional to existing services and reach the parts other funding cannot reach. With local knowledge comes a better understanding of what is already there and what would constitute genuine additionality. The same is true of specialist providers - they know the services that operate in their jurisdiction. Building your supply chain early will give you access to this knowledge if you do it right.

Opportunity costs and the risk of action

Planning and acting in an uncertain environment carries a greater risk of "getting it wrong". When operations and business development are stretched thin, this risk seems all the greater. What potential lead bidders risk is the cost associated with diverting their scarce business development resources from other uses (such as pursuing other opportunities or operational delivery) to focus on ESIF. 

There are a couple of ways to reduce this risk:

  1. Plan well and soon: Better planned activity over a longer time-frame should not involve more effort, but should reduce the effort needed to achieve the same quality result. Operational involvement, stakeholder engagement and supply chain engagement are all better conducted over longer time-scales: operational resources can still focus on the day job, and stakeholders and subcontractors have time to reflect and respond more intelligently.
  2. Bring in external resources: The ESIF competition is likely to be labour-intensive, requiring extensive stakeholder, supply chain and proposal development activity. If the opportunity cost of diverting internal resources is high, then consider the value of getting an external organisation to either lead areas of your project or back-fill to enable you to focus internal resources.

If that sounds like an obvious pitch for engaging The Good Consultancy... then I'm doing my job right.

 

If you would like to find out more about how The Good Consultancy can support your ESIF strategy, please contact us.