Overview about Current State of Play with Alliances and VFM

In the world of alliances, the now-familiar debate about Value for Money (VFM) continues to gather steam and, in some cases, rages on.

Not only is this topic the focus of sometimes intense disagreement, it has also become the focus of much study.
We have seen comparative studies of various procurement models, for example, and there is marked lack of consensus about methodologies used as well as the different conclusions drawn.

Even though it has been found that most alliances are delivered at a cost below their Target Outturn Cost (TOC) and above the minimum conditions of satisfaction (MCOS) for the non cost key result areas (KRAs), whether this represents value is still very much in question.

If we are true to the principles of alliancing, this is a debate which demands mindfulness and constructive conversation. Those of us involved with alliances work in a context where we have historically broken down barriers, challenged each others’ thinking, yet ultimately gained each others’ trust and made great gains because of it.

What has changed?

Over the past nearly 20 years, my colleagues and I have seen alliances transform the adversarial “us” and “them” paradigm. Alliance collaboration amongst competitors, vendors and clients has resulted in radical shifts that created new thinking, ways of operating and behaviours. Historical and conventional views have been confronted honestly, allowing parties to genuinely listen to each other and thus create something new.

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About your author: Deborah Kiers, Managing Director, JMW Consultants Asia Pacific

Tags:   VFM | value for money | JMW | alliances | procurement | TOC | target outturn cost | MCOS | minimum conditions of safisfaction | KRA | key result area