Month: March 2019

That’s the question explored by Bonfire CEO Corry Flatt in a recent feature on Future of Sourcing.  

It may sound farfetched to those outside of the procurement world. However, as Public Procurement Month comes to a close, there’s no better time to consider how procurement can be part of the solution to some of the biggest challenges facing the world.

Public procurement’s footprint

Still skeptical? Consider the following statistics:

• Global public procurement spend is estimated at $8.5 trillion USD annually
• 13 – 15% of gross domestic product (GDP) in OECD countries is spent through a procurement process

Contrast this with the World Economic Forum’s estimates for the expenditure required to tackle major global challenges:

• $116 billion to wipe out hunger,
• $26 billion to provide basic education to all children, and
• $8.5 billion to eradicate malaria.

Given the scale alone, it’s clear that public procurement, and its core principles of fairness, transparency, and best value, can have a major impact on the fabric of society. The ripple effect of responsible and ethical spending decisions extends beyond the direct end users, to the supplier community and wider society.
From increasing a community’s economic capacity through the involvement of minority-owned businesses, to promoting more sustainable industry by including environmental criteria in the purchasing decision, procurement teams can have a major impact on the world around them.

Challenges to overcome

However, there’s a clear gap between procurement’s potential impact and the status quo in most public organizations:

• Only 26% of public sector procurement leaders believe that their procurement function is highly effective, and that procurement is highly regarded internally and seen as a key business partner contributing significant strategic value
• Technology adoption is low, with only 39% of procurement leaders reporting that their digital strategy helps them deliver on objectives and improve enterprise value

The digital transformation that has brought exponential efficiency gains to many functions has been slow to materialize in procurement. In many cases, procurement is still seen as a back office function, with staff members’ time monopolized by administration and transactional work, leaving little time or energy for innovation and process improvement. After all, it’s hard to think about changing the world when you’re buried in paperwork.

How technology accelerates procurement’s impact

Adoption of technology is a key piece of the puzzle when it comes to procurement’s impact. As the pace of technological advancement accelerates, it is crucial for teams to begin the process of modernization in order to take advantage of game-changers such as blockchain and AI.

It begins with leaving behind paper and offline processes that are a drain on staff time and an obstacle to collaboration.

“By taking a first step toward digitizing the procurement process with something as simple as an e-sourcing platform, teams can eliminate many of those ailments while introducing collaboration, data insights, healthy competition among vendors, transparency and compliance,” notes Flatt. “The compounding effect of utilizing procurement software for smarter decision making has the ability to lead to material improvement and an overall better world for people.”  

Once digitization is underway, the data that was previously scattered in spreadsheets and filing cabinets becomes centralized and actionable. This unlocks the potential to apply artificial intelligence and blockchain to procurement for greater impact.

Olinga Taeed of Birmingham City University, a leading researcher on the applications of blockchain for social good, is enthusiastic about the role of procurement in enabling  values-driven purchasing. He writes:

 “My honest belief is that procurement will be the single largest instrument in the world to change the world – children will say they want to be a procurement officer because they will want to change the values of the world – what we buy, what we eat, what we sell, the values by which we transact. Blockchain and AI will change our processes dramatically.”

What is your organization doing to build towards this future?

Read the full article in Future of Sourcing.  

Fair and open competition is fundamental to public procurement. However, from a vendor’s perspective, public sector bids and RFPs can seem anything but open, thanks to the complex rules and cumbersome submission processes.  

The reality is that many organizations are inadvertently excluding vendors from their opportunities: not through any policy violation or compliance issues, but simply due to the difficulty and hassle of doing business with the organization.

There are many barriers for vendors in public procurement. It starts with the challenge of finding open opportunities in the first place and continues throughout the submission process: interpreting legalese-filled forms, spending hours by the photocopier collating copies, paying for costly shipping, and facing disqualification for postage delays or other wild cards. At the end of the day, many qualified suppliers decide that it’s simply not worth it.

Uncompetitive RFP projects on the rise

Unfortunately, research shows that this problem is worsening rather than improving. The State of the RFP Benchmarking Study, which looked at RFP processes in 190 organizations in North America, found that in 2017, 16% of projects received only one submission. This is a 3% increase from the previous year. Furthermore, 38% of projects received only two submissions, a 5% increase from previous years.

Other studies that included both bids and RFPs have reported even higher numbers, with one study showing that 25% of tenders received only one bid.

A lack of competition signals that your processes are not truly as open and transparent as they should be, but that’s not all — it also seriously impedes your ability to ensure best value.

The price of poor competition in your RFPs

Economists show that the number of bidders in a procurement influences the relative difference between expected price and award price, confirming what most procurement professional already know: more competition equals better prices.

In a typical fixed scope, price-only procurement, one additional bid can result in 3% cost savings. For a more open-ended type of project with defined outcomes but flexible scope, that can be much higher at 8% or more.

For public sector teams under pressure to maximize funding and reduce costs, accepting the status quo of two or three vendors per project is no longer feasible.

How eProcurement software helps improve RFP competitiveness

1. Reach more vendors.

To increase competition, you need to get your opportunities in front of more vendors. Newspaper advertisements and Excel-based vendor lists are a limited and outdated way of reaching vendors in today’s connected world. Clients using Bonfire eProcurement platform have reported a 5x increase in the size of their vendor database. Here’s why:

• Online advertisement and submission makes it easier for vendors all over the country to find and submit to opportunities, removing geographic limitations.
• Buyers can tap into a large pre-existing network of vendors who do work for hundreds of other public organizations.
• Buying teams can invite vendors by commodity code or location, notifying relevant vendors of your opportunities without any manual work.

2. Make it easy for vendors to participate.

Once vendors are aware of your opportunities, it’s up to procuring organizations to demystify the rules and regulations and remove barriers to participation, so vendors have every chance of succeeding.

Here’s how eProcurement software platforms help:

• One central location for vendors to find opportunities, register, and view all details and documents.
• In-platform Q&A and vendor communication so vendors can easily get answers to questions and stay abreast of all addenda or clarifications.
• Structured step-by-step submission to reduce error and ensure complete submissions.
• Online submission removes the cost and expense of printing and shipping, as well as risk of shipping errors, lost packages, etc.
• Instant confirmation of bid receipt, for peace of mind.

3. Visibility into your vendor community through up-to-date records.

Keeping up-to-date vendor lists is a constant struggle for procurement teams, made even more difficult when you’re doing it with paper forms or email and Excel. However, without clear visibility into your vendor community, it’s impossible to know where to invest vendor outreach or other growth initiatives.

eProcurement software provides:

• Easy online vendor registration with custom fields to collect and auto-expire vendor information.
• Visibility into vendor behaviour: how many vendors have viewed your opportunity, how many submit, what time they make their submission.   

Your ability to deliver best value to taxpayers depends on sufficient competition. See how Bonfire could help you get more vendors involved with your opportunities in a 20-minute demo webinar.

Bonfire is celebrating International Women’s Day by recognizing our female team members, sharing their experiences in tech, and focusing on how we can all work towards this year’s theme of #BalanceforBetter.

Women make up almost half of Bonfire (46%) — we’re always striving for balance. We’re happy to share insights on Bonfire’s female force across the organization, and yes, we’re acknowledging that there is still some disparity in a few of our departments.

There are many women making a difference and driving results at Bonfire, and while we wish we could have shared everyone’s perspective, we asked a few members of the female force at Bonfire to join the conversation on advancing women in the workforce.
We heard from:

• Maddy Currie, Senior Full Stack Developer (and the first female team member at Bonfire!)
• Liu Yang, Product Manager
• Melissa Nicolas, Business Development Representative
• Kim Veenstra, VP of Finance
• Meghan Wahab, Product Designer
• Whitney Chen, Client Support Agent

1) What would you tell your younger self about work?

Maddy: Diversify your skills early, in any direction, because if you have the experience to bring to the table that others don’t, you will think of solutions that others can’t. And trust your intuition; your gut feelings are based on a lot of information your rational mind isn’t aware of, so by listening to it you can avoid risks and take advantage of opportunities that you might otherwise miss.

Kim: You don’t have to know the answer to everything but what is important is having a good work ethic and taking the initiative to figure things out and get things done. I’d also tell my younger self not to complain so much when picking stones or helping with hay season on the farm as it provided me with the work ethic required to succeed.

Whitney: Contrary to popular belief, it’s okay to not be outstanding or the best. You’re going to see a lot of young women out there killing it, especially in tech, and you’re going to hear a lot of comments about how a woman is “not a real dev” or a “fake gamer” unless she has completed a dozen complicated side projects, or works at Google or Riot Games, or knows at least 5 obscure facts about a game she loves to play. Screw that. Just do your best, whatever your best is, because at the end of the day how you feel about your work is what matters.

Meghan: Ask a lot of questions — especially from people in different walks of life. You never know who will give you the most insightful yet veiled advice or guidance. There’s no such thing as an obstacle unless you think there is one. Have trust in yourself and treat your life like an adventure — be gritty, take risks while still maintaining a sense of security.
It’s easier said than done, but don’t fret about your future career path. Eventually life figures it’s s*** out and helps you connect the dots.

2) Why is a gender-balanced workforce essential for the tech community to thrive?

Melissa: I graduated from electrical engineering, which tends to have more men than women. Even from my past jobs working as a field engineer, the workforce was primarily more male than female. Now that I work in tech, it’s easy to see those nuances that I otherwise wouldn’t have noticed earlier, and I’m a firm believer that a diverse workforce creates different views and also welcomes more opportunity to solve various problems in the best way.

Liu: A diverse workforce in any sector also makes us all better people by giving us empathy for other human beings that are different than ourselves. It makes us less selfish. An ethical workplace retains ethical and happier workers who are more loyal to the company.
In tech specifically, we are automating things humans do. It’s too easy to imagine a world where technology runs the world. A diverse workforce in the tech sector would provide a better sounding board to the visions of tech companies. Our products could better serve our customers and cause fewer unintended consequences.

Kim:  I believe having a gender-balanced workforce is essential in bringing together different perspectives and experiences that should be shared. There are several studies that prove that having a gender diverse workforce leads to stronger financial performance and is key to high growth companies. I’ve witnessed this proving true at Bonfire given its executive team — I thoroughly enjoy the discussions we get into with the varying perspectives and approaches on the team from our diverse backgrounds.

Maddy: Gender balance in the workforce is essential for the tech community because women and men have different perspectives and ways of thinking about our common problems. By coming together we can combine all of our experiences to invent new solutions. Stereotypically, success in tech requires traditionally “masculine” strengths, like logic and critical thinking, ambition, and competition. To be fair, those traits are very important, but success also requires traditionally “feminine” qualities: compassion, aesthetics, communication, and cooperation.

3) What does the tech community need to do to realize the goal of a gender-balanced workforce?

Whitney: I think we as a community can start by recognizing that women with technical skills and roles are “valid” and “legitimate” regardless of their skill level or portfolio. And at an individual level — and this goes for women too — we can check ourselves during a questionable interaction with others by asking, “If this person was the opposite gender of what they currently are, would I be acting/reacting this way?” There’s a lot more that needs to be done, but I think this would be a good start!
Liu:

• Be family friendly. This is a pipe dream, but can you imagine providing daycare on site at work? Someday we might get there. But how about involving children during more company events?
• Minimize the role of alcohol as part of company culture. This might be controversial, but drinking should not be a prerequisite for networking with your colleagues. When it becomes the primary channel of social engagements in a company culture, those who do not engage will lose out. These, statistically, are women. For more on this: Stop (Silently) telling your Female Coworkers to Drink More.
• Provide mentorship. This would help recruit and grow men and women alike.

There are many many more things that can be done. Start anywhere!

Learn more about life at Bonfire.

In honour of public procurement month, we’ve gathered insight from top procurement professionals on their best advice for a career in public procurement, as shared in previous webinars and blogs. Browse these quotes for motivation and perspective as you chart your own procurement career path.

Collaboration is key in procurement

Internal customer satisfaction was rated as the most important measure of success by public sector CPOs in Deloitte’s 2018 survey. Understanding stakeholder goals and providing value through change management and project management is a crucial part of the job—but not always the easiest part. Here are two perspectives on the importance of taking a customer-centric approach:

“For me it’s about serving. I am serving these different departments to help the municipality do the best it can. Going into it with a servant heart and getting to know all the different operations within the municipality — if you don’t have a passion or desire for that, it’s probably going to be a hard job. But if you like being involved and supporting, then it is going to be a great thing to come to work every day.”

• Travis Ratsoy, Procurement and Assurance Coordinator, Town of Stony Plain

Be willing to talk to people, understand their viewpoint, get out of your office and meet people face to face.

• Travis Temeyer, Director of Purchasing, Eastern Michigan University

Conflict and difficult conversations happen

At the end of the day, procurement professionals can’t say ‘yes’ to every request, nor will their decisions please all parties. These two pieces of advice will serve you well in your procurement career to ensure conflicts resolve with a productive solution:

What I have kept in the back of my mind, in my experiences throughout 18 years of service, is that the vast majority of people that are in public service are good people who are trying to do the right thing. We may argue about the way in which we get things done. But in general, no matter what side of the aisle you may be on, everybody is trying to do the right thing.
We can’t look at our functions through the lens of a critic, thinking that people have the worst intentions. We have to put policies in place to prevent those things, but not at the expense of those that are trying to do the right thing. I keep that in mind every day of my work.

• Joel Neaveill, Director of Purchasing, Louisville Metro Government

Don’t take anything personally. During negotiations or difficult parts of the processes, remember it’s not about you. Focus on the process. In the legal field, a lot of things are very adversarial, but procurement is not like that. You’re working towards a mutually beneficial agreement. In the end, you want to be on the same page.

• Amy Tejirian, Procurement Officer at BC Net

Procurement has an organization-wide impact

The speed and effectiveness of the procurement process has a big impact on your organization’s ability to meet their goals. Here’s some inspiration to help other teams own their impact:

It’s important to remember that procurement influences the profitability of every area of the organization. We have direct influence over the business operations, and we need to capitalize on our expertise. Procurement is known for staying in the shadows — we need to self-promote a little bit and make sure people know how important our function is. You only do that by being willing to take some risks.

–Tracey Ens, Director, Procurement Services, Wilfrid Laurier University

More advice to advance your procurement career

When it comes to your procurement career, you are in the driver’s seat. However, it can be an uphill battle to get the resources and tools you need to thrive, whether that’s funding to attend a conference or a new software to cut down on paperwork.

In our webinar “Invest in your procurement function for better outcomes organization-wide,” special guest Paul Brennan, founder of ProcurePath and Director of Purchasing for County of Rockland, provides advice from 25 years as an educator and practitioner to help procurement teams successfully advocate for the support they need to advance their careers and the profession. Watch the webinar on-demand now.