With an annual spend of c.£3bn, DIO provides construction and infrastructure services to the MOD through its suppliers. It supports our armed forces by commissioning, building, maintaining and guarding what the women and men who serve our country need to safely live, work, train and deploy on operations.
However, DIO had never set out how it would do business with these suppliers to increase the value it delivers to the MOD and UK taxpayers. Graham Dalton, Chief Executive of DIO, summed this up: “We realise that we have not been the easiest organisation to do business with in the past and we are dedicated to changing that”. DIO recognised that it must strengthen commercial expertise to develop pragmatic, affordable solutions with its suppliers, that completely aligned with the outcomes its MOD customers were seeking to achieve. To address this challenge and guide commercial transformation, DIO worked jointly with PA Consulting to develop and publish the organisation’s first commercial strategy.
Deploying cross-sector procurement expertise paired with a deep understanding of Defence, PA worked closely with DIO and its other Strategic Business Partners (Capita and AECOM) to develop a coherent commercial strategy. PA engaged key stakeholders to understand the causes of DIO’s commercial challenges, and test infrastructure and procurement best practice to address them. Working collaboratively, the team developed and published the strategy to underpin the delivery of DIO’s transformation vision of ‘a Better Estate, a Better Service, and a Better Business’. The strategy informs DIO’s customers, suppliers and wider government stakeholders on how DIO will do business and create and sustain a competitive infrastructure market.
By jointly developing the published DIO Commercial Strategy with PA, applying and leading best practice, the organisation has built a strong foundation for engaging with and shaping its supply base. At its heart is PA’s actionable strategy approach which ensures DIO, its Armed Forces customers, the market place and the taxpayer all benefit in the short, medium and longer term. A great example of the new approach set out in the strategy was the process used in successfully awarding £1bn of contracts for the Faslane Nuclear Submarine base in May 2018. With the Strategy being warmly welcomed by industry, the DIO will continue to draw on it to guide how it spends c.£3Bn per year on behalf of its customers to drive value through a far broader supplier base. This reduces delivery risk and benefits the wider UK economy, including small and medium sized enterprises (SMEs).