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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.

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