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The Office of Government Commerce is calling upon public sector organisations to strive for greater value for money from spend on temporary staff to help deliver real, cashable savings. A new guide, Demand Management in 9 steps, sets out a simple suite of measures that can be applied by public sector managers to get greater value for money when considering how to best organise their external human resource requirements.

Successfully implemented demand management can play a significant part in helping to reach efficiency targets that are part of the government’s professional services collaborative category of spend. Collaborative procurement is a key strand of the government’s Operational Efficiency Programme (OEP) and a potential £1.1 billion of efficiency savings by 2011-12 from professional services has been identified.

Nigel Smith, Chief Executive of the OGC said:
“As efficiency targets increase, contracting authorities have a much greater need to make sure they are getting the best value for money from the use of their resources, and that includes human resources. It is crucial that public sector organisations also have the appropriate resource, at the right time and the right place, with the right skills and at the right price.

“Demand Management in 9 steps aims to support those within the public sector and challenges their current use and spend on external resources. It shows how the implementation of a demand management strategy can be highly effective in getting greater value for money from our public services.”

About Demand Management
The nine steps to implement demand management, as outlined in the guide, are:
  • Step 1: Define the approach and create a group of key stakeholders
  • Step 2: Analyse data and identify opportunities
  • Step 3: Generate options
  • Step 4: Select options and complete the business case
  • Step 5: Design a benefits tracking and recovery methodology
  • Step 6: Develop a communications plan
  • Step 7: Implement the changes
  • Step 8: Monitor and embed the changes
  • Step 9: Review and consider longer-term plans

Demand management is one approach to ensuring that the business’ needs are being appropriately met and that resource and the nature of resource (i.e. not over skilled or more expensive than the market rate) is not being applied unnecessarily. It is not about just reducing contract volumes – it is about ensuring, among other considerations, that when any resources are procured (whether temporary worker, interim or specialist) they are appropriate to meet the current and future needs and objectives of the organisation. In implementing any demand management activity, it is critical to differentiate between the business ‘wants’ and business ‘needs’.

A demand management approach introduces discipline in terms of demand forecasting: understanding which point in the business/ cycle or under what circumstances an organisation may need to use agency workers. A demand management approach will also provide assurance that the right procedures have been followed to meet the needs of the organisation, for example through an authorisation process to confirm that the requirement for an agency worker is valid.


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