Barriers to digital change in the Public Purchasing & how to overcome them
Data driven solutions and technology have enhanced productivity and workflows in offices all over the world. The pace of the working world has accelerated, and the way offices operate has evolved with the advent of SaaS platforms and data driven tools. In the United States, technologies have been quickly adopted, and improved upon by the Private Sector. This is driven by market competition to improve productivity, profit and workflow. However, this is not entirely the case in the U.S. Public Sector, and an area that is particularly lagging in the Public Sector is Procurement.
U.S. Public Procurement not only trails the technology adopted in Procurement of the Private sector, but behind entire markets such as that of the EU (more here). The U.S. falling behind in Procurement is not an entirely inexplicable shortfall. There are widespread explanations for the lack of technology adoption in Public Agencies, expanded upon in this piece.
The hesitancy, and sometimes resistance of the U.S. public sector to digital change raises many questions. If going digital presents an opportunity to save time and money, establish more efficient workflow, increase transparency and more readily provide public information to citizens- what is holding U.S. Public agents back from taking the digital leap?
A study by Mckinsey & Company identifies these four factors as the biggest obstacles to digital transformation for public agencies:
Cumbersome and bureaucratic internal rules and procedures.
Scarce funding for technology projects.
Narrow perspective on individual functions and customer touch points.
Shortage of “digital native” talent.
These four barriers bar many public entities from fully embracing the digital age and as a result government workers and public servants are set back. Public agents are so often restricted to paper-bound, labor intensive processes- costing them time, money and energy. Though these four factors are difficult obstacles to work around, solutions are beginning to emerge and the U.S. government is making strides to improve efficiency and effectiveness in public works. The formation of United States Digital Service, Federal Information Technology Acquisition Reform Act, and the emergence of executive orders to increase sustainable business and reduce waste have all increased likelihood of public sector digital transition.
But, as stated by authors Steve Cheng, Mike Joyce, and Mark McMillan in Harnessing the power of digital in US Government, published on McKinsey & Company Public Sector:
-Mike Thornton, Purchasing Manager for the City of Leesburg, FL
As Cheng, Joyce and McMillan articulate- digital change requires the adoption of new tools and a radical departure from old systems: upheaval of the old and embrace of the new. The most difficult element is that these systems have evolved over countless years of complex work by purchasing professionals who have developed what they believe to be an optimal system. These paper-bound, antiquated procurement processes are entrenched workflows based on the decades of experience of purchasing professionals. Shifting digital presents challenges and can often be countered with the question: if it’s not broken, why fix it? Mike Thornton provides an excellent response to agencies that believe they are operating perfectly with paper-based procurement:
“There’s one catch to selecting an e-procurement system…you don’t know what you don’t know.”
— Mike Thornton, Purchasing Manager, City of Leesburg, FL
Relative to the age of the procurement industry, e-Procurement is a young and new mode of operation- it is understandable that the change is met with reluctance. Fundamental change in operational structure is certainly a challenge, but Cheng, Joyce and McMillan estimate the following improvements (Figure 1): 20 % improved customer satisfaction, 15–20% higher operational efficiency, 20–30% increased employee engagement.
These figures present a strong case for the adoption of digital processes. As a counter to the barriers these authors introduce, they present 4 ways of overcoming them:
Establishing a digital nerve center with a clear mandate and singular accountability to drive change.
Adopting agile project methodologies to increase flexibility and accelerate time-to-market.
Reimagining end-to-end customer journeys rather than optimizing touch points
A core group of experienced, in-house digital specialists to lead the transformation
These counters to the universal obstacles of public agencies in obtaining digital systems present tangible action items that can help move public offices in the right direction. Cheng, Joyce and McMillan’s article identifies the challenges of public agencies adopting technology, and present tools for fighting the inertia of entrenched systems, limited funding, and absence of free time to pursue new workflows. Government agencies will benefit immensely by investing in public infrastructure through digital tools and solutions- making present systems more efficient and effective.
More insight into overcoming public procurement challenges to come!
Sources Cited:
- Harnessing the power of digital in US Government by Steve Cheng, Mike Joyce, and Mark McMillan published by Mckinsey & Comapany: https://www.mckinsey.com/industries/public-sector/our-insights/harnessing-the-power-of-digital-in-us-government-agencies
- How to achieve digital transformation with a new e-procurement setup by the Municipal: http://www.themunicipal.com/2019/07/how-to-achieve-digital-transformation-with-a-new-e-procurement-setup/
- United States Digital Service Mission Statement: https://www.usds.gov/mission
- Federal Information Technology Acquisition Reform Act: https://www.congress.gov/bill/113th-congress/house-bill/1232
