Thames Water & Efficio: Bold move or just anouther captive client?

Thames Water’s £2.5bn procurement outsourcing deal with Efficio has recieved significant attention and has received praise for its boldness and innovative “integrated” model.

The deal with Efficio outsources Thames Waters strategic and operational spend in a five-year contract to manage £500 million spend a year. Problem is (for me at least) Efficio had previously led an 18-month procurement transformation project with Thames Water to improve efficiencies and generate savings in both capital and operational expenditure, so it raises the question as to the consultancies role and commitment in embedding its capabilities within the client to create independence after it leaves. This is something ever successful consultancy assignment – particularly a so called “transformation” assignment should achieve.

Instead it seems Thames Water may have achieved the worst of both worlds. They have paid for an 18 month transformation project and ended up with a five year extension of the assignment. Nice work if you can get it Efficio.

The obvious question is then “what happens after five years” – will Thames have acquired the expertise themselves or anouther evergreen contract?

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