Operating Model Design
We develop innovative designs for operating models
Creating a better experience for learner drivers to keep roads safe
For public-sector organisations, finding ways to improve customer experience is vital. But with legacy technology and large, inflexible supplier contracts, they often struggle to innovate. The Driver & Vehicle Standards Agency (DVSA), which is responsible for driving tests in Britain, wanted to reinvigorate the service they provide to learner drivers. DVSA needed to gain greater control over key parts of their service and ensure their supply chain of suppliers was diversified.
PA brought together a diverse team, with expertise in business case development, operating model design and sourcing to assist DVSA in reimagining the commercial delivery model for the driving theory test. Together with the DVSA we engaged 100+ potential suppliers prior to the procurement activity starting, uncovering potential for an innovative mixed-economy model that will bring greater control, value and quality.
As a result, learner drivers will benefit from a theory test that can keep pace with changes in the driving environment and the opportunity to take the test in fully accessible test centres. The new model will bring estimated cost savings of approximately £50 million. Additionally, contracts will embed social value by committing suppliers to reduce their environmental impact and provide opportunities for apprentices and disadvantaged groups in the local labour market.
Applied deep public-sector expertise to define a future service delivery model
Developed a business case that set out the benefits of the new model, gaining government approval
Augmented the DVSA team to provide public sector sourcing expertise to deliver DVSA’s largest and most complex procurement ever
DVSA is responsible for delivering the driver theory test, the world’s largest high stakes computer-based test, to 2.6 million people each year. The theory test is a core part of delivering DVSA’s strategy of helping people through a lifetime of safe driving. Since its launch in 1996, the test has evolved to take account of changing road conditions, such as the introduction of dedicated bike lanes and new in-car technology like sat navs.
The current service was delivered through an end-to-end managed service contract with a single supplier. The end of this contract provided DVSA with an opportunity to reimagine the future service.
Alex Fiddes, Head of Digital Operations, DVSA notes, “Since the introduction of the theory test customer expectations have evolved enormously. We wanted to reimagine our services delivery model, take advantage of new technologies and work with innovative suppliers."
By reimagining their service delivery model, DVSA would be able to diversify its supplier base to improve competition in the market and deliver value for money. With our extensive experience supporting public organisations to reshape future services and design new operating models, combined with our sourcing and commercial expertise in delivering complex procurements, PA was well equipped to help. For example, we’ve worked with the Crown Prosecution Service in England and Wales to apply customer-centric thinking to redesign the way it manages cases in the future.
Importantly, we also brought extensive experience of writing successful business cases for HM Treasury approval to support evidence-based decision making, running competitive dialogue and navigating public procurement regulations. We have worked with several organisations seeking to disaggregate long-standing contracts, like our work with the UK MOD to manage suppliers on a £27 billion programme.
To launch this three-year engagement, we worked with DVSA to understand their objectives and shape the future vision. We gathered insight from a range of sources – documentation from previous retendering efforts, conversations with the CEO, workshops for senior stakeholders – to create an outline vision and objectives. We refined and confirmed these through collaboration with DVSA stakeholders.
With an improved customer experience, more control over service delivery and supplier diversification to deliver better value emerging as priorities, we began to explore options for delivery. We proposed an innovative mixed-delivery approach as the best route. DVSA would move from a monolithic single supplier contract to a disaggregated model where some capabilities would be brought in-house, building on existing capability and enabling greater control over key parts of the service. By disaggregating the service in this way, we knew we could attract a range of new suppliers who were capable of delivering elements of the service but could not deliver the entire service.
“At this stage, we valued PA’s ability to bring a fresh perspective and provide constructive challenge,” says Alex Fiddes. “By presenting us with a range of evidence to back up their proposals PA helped us make fully informed decisions.”
Next, we defined the new service delivery model in more detail. How would the individual components of a mixed-delivery approach fit together and how should DVSA package the outsourced components to attract supplier interest?
To answer these questions, we worked alongside DVSA stakeholders and engaged with more than 100+ potential suppliers, including computer-based testing organisations, testing software specialists, test centre services providers and public-sector outsourcing providers. This process included events to showcase DVSA’s vision and a series of round-table sessions to understand how different suppliers could contribute and what would make the opportunity attractive for them.
As a result, we defined a future service delivery model and commercial strategy that we were confident could be delivered, and developed the business case for the future service. The business case demonstrated the proposed approach would deliver value for money, which was approved by DVSA, Department for Transport, Cabinet Office and HM Treasury stakeholders.
For the final phase, we managed the procurement of the two main capabilities being sourced from the market: the regional test centre network and the Test Engine & Test Content Management (TETCM) solution, which have a combined value of approximately £300 million. We continued the process of market dialogue, working with potential suppliers over a number of phases to enable them to understand the requirements as fully as possible and refine their proposals to maximise value and quality.
We did all this in line with government procurement regulations and best practice to minimise the risk of future challenge. And we maintained an overview to ensure that the various contracts were complementary and that suppliers would be able to work effectively together.
The backdrop to this procurement meant that the team were negotiating in a high-stakes environment,” says Sharon Meredith, Head of Commercial, DVSA. “PA’s contribution to the negotiation process helped us to secure robust contracts against defined requirements, enabling us to take back control of service delivery.”
“PA provided senior professional consultancy support on the most complex procurement my organisation has undertaken and against a backdrop of the COVID-19 pandemic which required virtual competitive dialogue,” says Alex Fiddes. “PA’s depth of knowledge on procurement legislation, process and bidder engagement alongside their ability to provide professional advice that is understood and more importantly contributed to our success.”
With contracts for the new services now signed, DVSA is much better positioned to develop and improve the theory test experience for learner drivers. The delivery contracts have been developed to deliver DVSA’s strategic objectives. This includes a focus on social value where suppliers have signed up to reducing their environmental impact, employing apprentices and ensuring employment opportunities for local disadvantaged groups. In addition, all test centres must now be fully accessible.
There are other positives too. The new, disaggregated model has opened up the market to a wider range of suppliers, creating opportunities for new entrants and reducing DVSA’s dependence on a single supplier. In addition, the new approach is expected to deliver approximately £50 million in savings over the next five years.
Ultimately, the biggest winners will be everyone who uses the roads in the UK – whether as drivers, passengers or pedestrians. A high-quality theory test that prepares new drivers to take to the road with full awareness of other road users will help keep Britain’s roads as some of the safest in the world.