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Singapore’s Security ITM encourages smart buyers to adopt best sourcing practices

Singapore’s Security ITM encourages smart buyers to adopt best sourcing practices

The
Security Industry Transformation Map (ITM) envisions a vibrant, technologically
advanced and competitive security industry delivering better security outcomes
for Singapore and better jobs for Singaporeans.

Such
an industry ecosystem needs both solutions-based companies to deliver high quality
security services and smart buyers that choose security solutions that integrate
manpower and technology.

The Security
ITM acknowledges that buyers play an important role in the security industry as
they shape the kind of security services and outcomes provided by the security
agencies. As such, other than encouraging technology adoption and upskilling
talents, the Singapore Government also intends to bring about change on the
demand side.

The Security
ITM aims to help buyers become “smart buyers” by encouraging best sourcing practices.

Buyers’ behaviour as a challenge to the security
industry

At
the moment, many buyers of security services do not have the practice of
conducting risk assessments before they call for tender. It is typical for them
to use the same tender specifications, such as the same number of guards, for
years without knowing if the solution is optimal. Most often, buyers also tend
to select vendors on cost only, rather than assess value. 

In
general, there is low awareness of new technologies and innovative solutions
that can provide them with the same or even better security outcomes. Even if
they were prepared to invest in technology, there may not be follow-through to
redesign jobs or equip staff for effective implementation.

According
to Mrs Josephine Teo, Minister, Minister, Prime Minister’s Office, Second Minister
for Home Affairs & Second Minister for Manpower, this results in little
incentive among service providers to differentiate their services.

Minister
Teo also pointed out several other industry practices that have unhelpful
consequences. For example, contract durations tend to be short, which makes it difficult
for service providers to recoup investments, even if they are willing to bear
the upfront risks.

The consequence of these industry norms has made security
guarding remained largely manpower-intensive, with little adoption of promising
new technologies and innovative solutions. Job content and work conditions for security
personnel also remain unattractive.

Helping buyers to be
smart by promoting best sourcing practices

The Security ITM encourages buyers to take a smarter approach
to procuring security services. This means that buyers should first understand their
security need through a risk assessment. The tender specification should then
reflect the buyer’s priority in security outcomes, rather than just headcount.
This will allow solution providers to solutions that best meets those needs, by
combining manpower and technology effectively.

Also, buyers are encouraged to develop long-term partnership
with their security providers, rather than taking the lowest-cost approach and
switch between new firms every few years. This allows buyers to enjoy higher
quality services at lower long-term cost, as well as incentivise the chosen provider
to offer better solutions.

In
Minister Teo’s speech, at the ITM launch, JTC was cited to be a good example of
a smart buyer. Having conducted feasibility studies and consulted with various
service providers, JTC will be launching an outcome-based tender for cluster
guarding of their properties in one-north. Security agencies have the
flexibility to propose how best to achieve security outcomes, such as by
consolidating multiple command centres, and deploying video analytics and quick
response teams. Through this project, JTC expects to see productivity savings
of more than 20%.

Credit: MHA Singapore

To support the adoption of best sourcing practices, the
Government will take the lead to be a smart buyer.

As
announced by Minister Teo, most government agencies will adopt outcome-based
contracts by 2020. Government agencies, such as Ministry of Home Affairs (MHA),
have started to re-structure security contracts by aggregating demand and
focusing on outcomes. This serves to provide sufficient economies of scale to
incentivise technology, process innovation and training. 

At
the same time, the Government will support buyers through a new pilot grant
administered by the NTUC U Care Centre. Under the Smart Sourcing Initiative
(SSI), funding support will be given to service buyers in security, cleaning
and landscape sectors which implement outcome-based contracts and train their
procurement staff to be familiar with best sourcing principles.

To
qualify for funding under the SSI, security service buyers must meet
requirements such as: (1) conducting a risk assessment before drawing up tender
specifications, (2) specifying expected performance outcomes rather than
headcounts through the use of technology-enabled solutions in their tender
specifications, (3) placing heavier emphasis on quality rather than price when
evaluating bids, (4) training their procurement staff to be familiar with best
sourcing principles, and  (5) putting in
place longer-term contracts. 

Similarly,
the Security Productivity Initiative introduced by Workforce Singapore last year
also provides customised support for service buyers and security agencies to
implement job redesign and tech adoption projects. This will help ensure that
technology solutions are effectively deployed to improve productivity and
security outcomes. 

The Security Productivity Initiative (SPI) is part of the
Lean Enterprise Development Scheme (LEDS) programme.  Under the SPI, 5 scalable security technology
solutions have been identified and validated with industry stakeholders. These technologies
include visitor management systems and video content analytics, which can be deployed
across different property types such as industrial and commercial
buildings. 

In terms of education and outreach, the Government will
launch a comprehensive tripartite guide on best practices in procuring security
services by the mid-2018. The guide will educate buyers on how to plan and
evaluate an outcome-based tender for security services.

In addition, there will be training programmes on
best sourcing for security, targeted at procurement officers and service
providers, to be launched by next year.  Industry-led
seminars, organised by the Union of Security Employees, Security Association
Singapore and Association of Certified Security Agencies, will also be available
in the first half of this year for buyers in the commercial and industrial
sectors.