To say that local government agencies have dealt with a lot over the last couple of years is a gross understatement. On top of the typical issues of budget constraints, technology optimization, and improving vendor diversity, the global pandemic pushed many procurement teams and their departments almost to their breaking point as they faced additional hurdles introduced by supply chain shortages, ‘work from home’ procurements, and staffing challenges. As procurement teams stabilize and balance the demands of today’s procurement landscape, new questions also arise – are we ready to meet the digital transformation our community, constituents, and employees need?
There are many untold stories of public servants going above-and-beyond for the people they serve. Bus drivers and train operators who showed up to work every day throughout the pandemic because they knew that frontline employees were depending on them to get to work. Procurement officials who became PPE (personal protective equipment) experts and worked around the clock to source the items needed to protect their coworkers, constituents, and communities. First responders answering the call for the safety of their community and stepping in to support citizens experiencing the effects of natural disasters.
Despite these heroic (and often unprecedented) efforts, many governments continue to struggle with the rapidly changing needs of their customers. The International City/County Management Association (ICMA) annual conference highlighted several key challenges that many governments still face today. While the conference was inspirational and thought-provoking, a key area of opportunity that stood out to me is digital transformation with a particular focus on saving time/money and community engagement.
The key to change starts with procurement
I’ve often viewed government as an ‘industry of industries’. One municipality may operate police, fire, public works, healthcare, sports stadiums, and even zoos, each with their own specific needs and requirements. This can produce silos across departments and offices, creating duplicative contracts, strained supplier relationships, and missteps in compliance. Procurement is the connective tissue between the many layers of government.
As one of the few departments that touches every department and office across their organization, procurement is uniquely positioned to be at the forefront of innovation and has the opportunity to bring these diverse departments and requirements together, leverage the collective buying power for the greater good of the organization, and even inspire change.
One such innovation being led by procurement teams across the country is the focus on and investment in digital transformation. Many procurement teams are engaged in the automation of time-consuming processes and paper-based procurements and focusing on data-driven decisions to drive cost reduction, cost avoidance, and place more spend under management. These actions are leading to higher compliance rates, lower supplier defect rates, and greater procurement accuracy (e.g., purchase order accuracy).
But what if the digital transformation could also aggregate spend data and leverage the collective buying power of multiple public sector organizations thus enabling them to negotiate better pricing despite their individual size or spend patterns? Technology tools could then incorporate AI (artificial intelligence) that analyzes the requirements/needs of the buying organizations and serve up competitively solicited contracts, simplifying the search and evaluation process, and maximizing cost savings while still meeting the procurement requirements of the individual organization.
Digital transformation can also aid governments in connecting to their communities and their constituents. Through aggregate spend data analysis across single or multiple governments, a broader picture of the state of the community can be gained. Does infrastructure across a specific geography need investment? Are parks aging and dilapidated? Does the senior center require expansion? Through spend data analysis, governments (and specifically procurement departments) can identify spend patterns and make timely (and necessary) investments in their communities.
Our social responsibility as a company who serves the public sector
Government agencies want the basics done well: provide a great user experience, play nicely with their existing technology investments without creating redundant or manual processes, and make it easier for their teams to make data-driven decisions. Technology companies need to meet cities and counties where they are today. How do we collectively think backwards from the challenges they are facing, simplify the ability to connect and transact while maintaining the integrity that a municipality needs to meet their individual procurement requirements? These are just some of the questions we at Varis ask ourselves every day.