As a performance management technique, 'continuous improvement' refers to a process whereby a buyer sets expectations with a supplier to deliver uplifts in value or capability within the life of a contract. As indicated by the diagram in the 'Managing Contracts' guidance previously, continuous improvement sets out to achieve expected improvements in performance that can be clearly defined.
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A key principle of the Crown Commercial Service's contract management guidance encourages public buyers to: "drive continuous improvement, value for money and capture innovation" (CCS, 2018).
The International Association for Contract and Commercial Management describes continuous improvement as: "an ongoing effort to improve a supplier's products, services, and/or processes, generally aimed at a specific contractual performance measure" (IACCM, 2019).
The Chartered Institute of Procurement and Supply distinguishes continuous improvement as the process of: "making continual small improvements that require close monitoring... as opposed to big changes made at irregular intervals" (CIPS).
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Creating the commercial conditions for suppliers to continuously improve performance helps a buyer to achieve better value over the life of a contract. This is particularly important in competitive technology contracts with a long-contract duration (e.g. greater than 3 years), where alternative products and services would be expected to improve within the life of the contract.
Though, continuous improvement efforts often fall down due to poor definition. An IACCM survey found 50% of buyers claim to define clearly continuous improvement outcomes, while only 28% of suppliers agree (IACCM, 2019). An effective continuous improvement process takes account of this common pitfall to ensure better outcomes can be achieved.
Authorities with low contract management maturity There is a range of maturity of IT contracting management functions across London boroughs. This guidance will be most practical to boroughs that do not regularly:
Contract Managers Contract Managers are responsible day-to-day for managing supplier performance, and can use this guidance to enforce suppliers continually improve their product or service.
Procurement Directors Procurement Directors should have oversight over the enforcement of continuous improvement outcomes, as a key objective of each procurement process.
CIOs / CDOs & Service Directors CIOs / CDOs and Service Directors should be consulted in the definition and agreement of continuous improvement outcomes with suppliers.
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