State and federal agencies need to leverage their procurement community to gain a real-world view on what works and what doesn’t, writes Stuart O’ Neill.
It’s positive to read that our federal and state governments are seeking to understand the role procurement can play in supporting innovation, cybersecurity, development and the digital capabilities of Australia as a nation, as well as supporting local suppliers, onshoring and our SMB sector.
But procurement can’t play the strategic and critical role it should be playing right now, unless the procurement community is engaged and involved.
With many organisations, procurement people buy on Amazon over the weekend and know how easy it can be to procure goods or services. Then they go back to work and see how hard it is in the work environment, thanks to outdated systems, manual processes, lack of the necessary tools and teams / departments / agencies that don’t share information, processes or best practices.
Effective procurement management, policies and procedures allow any government department – like any organisation – to gain visibility, maintain efficient processes, drive further efficiency and cost savings to taxpayers.
In the process, it can start to ensure diversification in terms of size of businesses supplying the government, and – importantly – support for local and indigenous suppliers, as well as responsible sourcing and supply chain practices.
The government has an obligation to spend wisely on behalf of its constituents, and to act with social responsibility.
But – and it’s a big but – I would urge any council of decision makers and ministers to be certain to admit what they don’t know, and talk to the people who do know. They might not have all the solutions, but collectively they do have an informed, front-line perspective on what is working and what isn’t, where supply lines are stressed, where they worked and when they haven’t, what needs to change, and what capabilities they wish they had.
That’s why the government must invite the collective intelligence of its procurement and supplier community, at a minimum, to successfully achieve the objectives it’s working toward. It could even leverage the procurement community at large to understand what processes work and identify outdated or inefficient processes of its own.
Steps to smarter procurement:
- Government procurement will work better when there is consistency across departments, elimination of process for process sake, and clear visibility of the supply chain and spend information.
- It must be easier for procurement to do its job and for suppliers to engage with the government. It must be simple to onboard suppliers, as well as interact with and inform them. It must be easier to purchase everything from a pen to a computer to an enterprise technology solution. It must be easier to log an issue, source for a contract or to fix something (like air conditioning), or to undertake a project.
- The way suppliers engage with the government must be consistent and simplified so they all engage with the same processes, held to the same supply chain standards.
- The process of finding and working with new local suppliers who can deliver the same product locally must be simplified, which drives money into the community and supports the economy and drives success for us as a society. This enables procurement to drive real change at a grass roots level.
- Of course at the same time, any processes and solutions must ensure you are risk averse so you don’t find yourself on the front page due to sourcing from unvetted, unreliable or unethical sources. You need visibility of the supply chain, and of your suppliers’ supply chains.
- If it’s too big a project, it won’t get done. You need to establish a consistent approach in multiple different departments in terms of processes, in a manageable way. It can happen on a piecemeal basis because then you can see tangible deliverables and get projects completed in months not years.
- Making a manual process into a digital one is not effective digital transformation. You need to assess and modernise your processes, and create appropriate digital processes, so that they work for now and into the future.
Enable your procurement managers to be smarter together from a supply chain, governance and end to end business spend management perspective. Let your procurement community help drive best practice going forward. If government agencies can be intelligent about how they spend taxpayer money, that can drive real change.
Right now, government procurement is in a more prominent position than ever to ensure the survival of many Australian businesses that would be government suppliers. But only if the collective intelligence of the procurement community is leveraged.
*Stuart O’ Neill, is APAC managing director for procurement management platform Coupa
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