2.11 Business acumen is the ability to take sound commercial decisions based on an understanding of the motivations of private sector counterparts. There are numerous examples of poor commercial decision-making caused by a lack of business acumen within teams.12 In 2007, the PAC's report on improving tendering of PFI projects13 found that PFI teams had not fully understood that lengthy tendering periods and delays were leading to fewer serious bids.
2.12 Nine out of 16 commercial directors told us that business acumen is an area of weakness within their departments. Private sector partners agreed. PCRs also highlighted a shortage of people with business acumen in: the MoD, DfT, the Foreign and Commonwealth Office, and the former Department for Business, Enterprise & Regulatory Reform.
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12 Delivering successful IT-enabled business change, NAO (HC 33, 2006-07, Improving the PFI tendering process, NAO (HC 149, 2006-07). Further examples listed in Appendix 2, www.nao.org.uk/commercialskills09_examples.
13 Improving the PFI tendering process, PAC (HC 754, 2006-7).