Buying Time: invest in e-Procurement to increase efficiency
The advent of technology breakthrough and the age of big-data have transformed the landscape of the modern workforce. With advanced technology and software, private sector efficiency has increased exponentially, but the public sector has struggled to keep pace. Public officials face demands for expedited service and delivery with fewer resources- restrictive budgets, bureaucratic systems, and lagging workflows. Public agencies are forced to do more with less- one area this is clearly evident is in the realm of Procurement. U.S. Public Procurement professionals face complex paper-bound systems burdened with inefficiency, which costs them time and money. These inefficiencies have been relieved in Europe due to the use of digital tools, where they have forged a better way to buy.
Public sector purchasing efficiency has been improved throughout Europe, where e-Procurement (electronic Procurement) is the law of the land. Throughout the EU the use of paper in Procurement has been illegal since October of 2016. As a result European Procurement officials have saved time and money, while making the entire Procurement process more transparent to the public. The wave of the future that is e-Procurement is taking shape in the U.S. as purchasing professionals begin to see the its benefit in daily operations.
When commenting on the efficiencies created by the Negometrix Procurement software, Eric Shibley from the Town of Palm Beach says this: “It’s a game changer. It’s decreased our labor time for issuing a solicitation tremendously- issuance can be done in a matter of minutes now when it used to take 5 days.” The Town of Palm Beach currently utilizes Negometrix in their Procurement office, and has seen markable improvement: increased vendor participation, diversity, time and money saved. The office has undergone a complete digital transformation. Though this digital transition seems common sense, it is not always so simple for U.S. government agents to change.
Mckinsey estimated that the world’s governments could save $3.5 trillion annually by 2021 if they were able to match the productivity gains that leading countries have made in four specified functions, one of which is digital technology and data analytics. The Budget projection of Government spend for the 2019 Fiscal year is $4.4 trillion. So if public agencies stand to save so significantly, why is there hesitancy to transition? Because the public sector faces obstacles that are not prevalent in the private sector. According to a study of McKinsey & Company, these are the most evident challenges:
o Limited budget for technology projects, and general lack of investment in digital infrastructure
o Resistance to change due to entrenched systems, embedded workflows, and decade old purchasing practices
o Absence of “digital native” talent
o Bureaucratic rules and procedures
The benefits of shifting digital outweigh traditional forms of public procurement: visible in return on investment (ROI), paper savings, time savings, increased vendor participation, optimized workflows, etc. With strategic budgeting through a focus on the benefits of a software system, Public Procurement offices that go digital will find substantial improvements in functionality, transparency and efficiency.
More on the benefits of going digital here:
https://medium.com/nx-e-procurement
Sources cited:
The opportunity in Government Productivity, 2017 Annual Report: https://www.mckinsey.com/industries/public-sector/our-insights/the-opportunity-in-government-productivity
Congressional Budget Office: https://www.cbo.gov/topics/budget
Town of Palm Beach: https://www.youtube.com/watch?v=VXx98AghvQE
