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Two Procurement Technology Advances that Could Make a Big Difference to Suppliers and Buyers

This article was originally published on the Spend Matters Network on 27th April 2016

As we said in our introduction, it’s Procurement Technology month at Spend Matters UK. We mentioned that, in our opinion, the public sector may be falling further behind private sector best practice in terms of technology uptake and in terms of what technology can do to make us serious procurement leaders. There are exceptions of course, like the NHS with some significant initiatives under way and exciting new solutions now actually being used. But, as we said, “our perception is that central and local government in the UK and probably most other countries are not really keeping up with the latest thinking and possibilities in terms of procurement technology.”

An organisation that is championing better public sector procurement (including third sector) across the UK is Innopsis – a trade association for companies that deliver the digital infrastructure required to create better public services. It is clear that the organisation has a real passion for what it does, providing its members with access to information about the network services marketplace, and shaping future competitions like the Health and Social Care Network (HSCN).

We were fortunate to be able to secure an interview with Kelvin Prescott, Information Director at Innopsis. Kelvin has a wealth of knowledge and expertise gained from both public and private sector procurement backgrounds – in his role he is committed to promoting better practice and, as we discovered, is a mine of information on public sector procurement past, present and future.

“Our primary function,” he explains, “is to make it easier for our members to do business with the public sector.” His personal experience makes him, in his own words, “part poacher part game keeper.” He has spent 10 years working with public sector buyers – running procurement processes, and advising on strategies – predominantly in IT and outsourcing. The other half of his management consulting career was helping suppliers in bidding for the larger contracts, giving advice on go-to-market strategy and negotiations on large ICT contracts.

So what’s his role with Innopsis? “As Information director I take my understanding of what’s happening in the world of public sector ICT and share that knowledge with our members. I advise on how to gain visibility of opportunities and how to get the best out of them, educating buyers on what suppliers need.”

What does he see as the future for procurement technology in the public sector and beyond? Kelvin could delve into great detail on a number of issues here, but that would be outside the scope of this post. But his ideas are ripe for mining, so we will return to some of them in more detail in the near future: for now, we look at his top two procurement technology advances that could make a wealth of difference to suppliers and buyers.

Single sign-on capability for suppliers, negating the need for multiple sign-ins to procurement websites. “The advantages of this,” says Kelvin, “speak for themselves. Electronic procurement enables customers and supplies to communicate quickly and reduce the time of transactions – but there are some hidden costs. To start with, everyone has a portal. To do any business in the public sector, suppliers must register through a buyer’s portal. And once registered, they then have the task of monitoring that pipeline for relevant opportunities – which can seem like searching for a needle in a haystack. Crown Commercial Service identified some 330 individual procurement portals in use across the public sector shared between about 2,000 customers. Our own research identified about another 100. That’s a lot of registering if you want to be a supplier to government. Keeping on top of it is a big administrative burden with wasted effort.”

“With clearer standards, and more innovation from procurement technology providers, it must be possible to integrate and share this kind of information, so suppliers can see opportunities more easily and focus on the right ones among the thousands of leads. The same kind of opportunity also extends to the private sector, whether it’s manufacturing or retail, where you have a group of customers interacting with the same market. Some initiatives are being made, and that is useful, but it is usually only at regional level, and we need to see these practices adopted nation-wide.”

A catalogue of services – think ‘comparethemarket.’ “There’s a fantastic opportunity in public procurement technology to take what works well for individual customers and extend it across government. If all customers could use the same procurement platform – a service catalogue of spend that customers can advertise on – buyers could see what current suppliers offer and suppliers would be able to see more of the market. A great example of this is the Digital Service marketplace – where you can see and search offers from some 2000 hosting and cloud services suppliers. It’s doesn’t sound like sense for suppliers to be advertising in the same place as their competitors, but it attracts customers just like having all the same types of shop in one shopping centre. Suppliers need to overcome their fear about being compared with others, the benefits clearly outweigh the risks. Why? Because customers are more likely to spend money if they are confident that they have compared the possibilities and are getting the best deal. Spend in the Digital Services marketplace has grown consistently to £400-450m per annum. There’s value in publishing and sharing information. The opportunity for procurement technology suppliers is to find ways to broker that information sharing among customers”

So, in general? “It is our opinion that the public sector is leading the way in some cases, because they can act as a single customer when they want to and leverage that position. Large corporations run their own electronic procurement technology platforms – they are strong on benchmarking their own performance in the supply chains they manage. If they shared their information it could be really powerful.” And why isn’t that happening?  “Because – historically people are very protective of their data. Customers are worried about revealing exactly what they’re spending money on – they think they might give away information that is sensitive to the organisation. Suppliers’ concerns are more commercial in nature. But the overall lesson is that you can create a marketplace where customers are so confident they’ve seen all the options that they are more likely to spend the money.”

And the data that technology generates? “In terms of the public sector, we are convinced that buying organisations are not smart at mining their own data to make saving opportunities. Not because the technology is inadequate but because of contract regulations and skills constraints, and because dominant concern for procurement professionals is with compliance. That makes them more risk-averse and less willing to share. Local authorities spend billions – there’s a lot of transactional data in their hands that could be so much more beneficial to them, to help them aggregate and spend more effectively, but they haven’t got the agility and skills more prevalent in the private sector to make the most of it.”

Many thanks to Kelvin for sharing his thoughts — much more knowledge sharing, opinions and thought-leadership can be found on the Innopsis website, do give it a visit or better still, sign up to become a member.