Month: June 2019

Now more than ever, procurement is gaining recognition as a strategic contributor to the organization, rather than simply an administrative or support department. After all, procurement teams play a crucial role in ensuring that internal departments get the goods and services they need to put organizational plans in action. 

Along with the shift in perception, the role of procurement teams is shifting. Technology is reducing the amount of transactional administrative tasks in a procurement manager’s day, providing more capacity for strategic sourcing. 

Data collection and analysis is necessary to inform a strategic approach to procurement. After all, in order to fuel continuous improvement, you need to understand where you are now, where you want to be, and how you are tracking against those goals over time. 

“Procurement organizations need detailed data to fully understand their purchasing volumes, their expenditures, their spending histories, and the usage patterns of government departments,” explains Dugan Petty, Senior Fellow, Centre for Digital Government and former CIO and state purchasing officer for the state of Oregon. “Without these insights, it’s difficult to build a more effective sourcing strategy.”

DOWNLOAD the GovTech Guide “Procurement Tech and How to Use It” 

Using procurement data to achieve strategic sourcing goals

Cost savings

Given that half of every municipal tax dollar is spent on procurement of goods and services, prudent management of funding is a chief concern of procurement teams. 

Data on cost savings (on an overall as well as per-project basis) makes it possible for procurement teams to identify and optimize cost savings opportunities. It can also give procurement teams a concrete measure of their impact on the organization. 

“Once you do market research and analyze what you’re paying under your contracts, you can execute procurement strategies that are based on what you’re seeing in the marketplace,” notes Petty. “If you find you’re paying three percent over market for an item, for example, you can set a goal of hitting prices two percent below market over the next year or two and track how well you’re moving to that target over time. That can result in hard dollar savings that you can use to demonstrate the value proposition that procurement achieves.”

Better outcomes for stakeholders

In the public sector, it’s not all about the bottom line. 

“Purchasing is also a critical interface between municipal operations departments responsible for service and program delivery and their outside suppliers,” says government procurement expert Stephen Bauld. As such, procurement teams also consider internal customer service and contract outcomes as chief measures of success. 

In order to be able to ensure that procurement outcomes are being delivered and priorities are aligned, procurement teams must stay engaged with their contracts and vendors even after the award is made. 

 By collecting data on supplier performance, contract term and change orders, and total contract value, procurement teams are able to close the loop on their bid and RFP decisions with clear visibility into how well suppliers are fulfilling their contract. They can also provide more proactive and insightful service to stakeholders by using supplier performance data to correct issues before they escalate, or even to inform future procurement decisions. 

Preparing for the procurement function of the future

Data is the new currency, and its impact on procurement teams will only grow in the future. 

Fortunately, eProcurement technology is evolving to make it easier for procurement teams to capture and analyze their own data—without spending hours in Excel. 

As Petty explains, “The data capture and data analysis capabilities are so much stronger than what we ever had in the past, and that is providing tremendous value.”

Digitizing your procurement function makes it possible to capture your procurement data for the benefits described above—while also preparing your procurement team to reap transformative benefits of ‘big data’ in the future. This will help teams provide even greater strategic insight to inform their organization’s spending decisions in the future. 

“The power of cloud software and ‘big data’ will transform how public agencies buy,” notes Bonfire CEO Corry Flatt. “It’s an exciting time for public procurement technology.”

For more, read the GovTech Guide Understanding Procurement Technology and How to Use It. 

Much has been made of the ‘silver tsunami,’ which describes the looming wave of Baby Boomer retirements set to disrupt the public sector workforce in the next few years. Between 30% and 40% of state workers are currently eligible for retirement, with even higher numbers in local government. Meanwhile, most public sector teams (as many as 90% in some jurisdictions!) do not have succession plans in place for replacing employees or managers.

For procurement teams, which are often operating under strapped resources at the best of times, the impact will be magnified. The reality is that when veteran employees retire, decades of experience and institutional knowledge go with them.

Retention, training, and recruiting initiatives are valuable strategies to mitigate the impact of the anticipated ‘brain drain’ from senior staff retirements. However, these are long-term plans—and with nearly half of the public sector workforce eligible to retire today, teams need to start preparing now.

Sourcing software: a port in the storm of staff turnover

Transitioning your paper or Excel-based bid and RFP process onto a centralized sourcing platform provides several benefits to help manage staff turnover and retirements without missing a beat on your procurement.

1. Centralize bid and RFP activities in one platform.

All too often, bid and RFP information is stored in filing cabinets and locally-stored spreadsheets. When a staff member leaves, their teams find themselves putting on their detective hats to find project information, connect with the right stakeholders, or piece together FOI requests or audit reports after the fact.  

At best, it’s a time sink—at worst, it’s a source of risk for your procurement function.

Sourcing software provides one central platform to manage all bid and RFP decisions, across all procurement staff, in one place. Retiring employees can grant access to their colleagues to provide immediate visibility into vendor details, proposal documents, evaluator information, scoring, and project communication for all past and current projects.

As a result, procurement teams have the up-to-date information they need to pick up where their colleagues left off.

2. Do more with less.

Forty-two percent of government purchasing staff report that they are overworked—and the problem is likely to grow more acute as staff retire. In many cases, open positions are backfilled or go unfilled. Even if they are filled, the average hiring process in public sector takes 53.4 days, so teams can be expect to be shouldering an increased workload for some time.

Sourcing software helps procurement teams manage growing workloads by automating many of the tedious administrative steps in the process — such as manning the receiving desk, distributing proposals to evaluators by hand, or manually aggregating scorecards.

As a result, teams are able to reduce RFP cycle time by half, giving them additional capacity to keep up with increasing demands on their time.

3. Operationalize best practices for quicker on-boarding and training.

Every team has a ‘go-to’ person, who is relied upon for questions, gut checks, or reminders on how the formulas work on complicated Excel files. You wish you could bottle up their knowledge—but alas, that technology hasn’t been developed yet.

The next best thing is using a sourcing platform to operationalize best practices across the procurement team. Templates and drafts ensure that standard clauses and compliance language are always included. Staff can also access all past projects in order to learn from previous examples that yielded high value contract awards.

While new team members are learning, experienced team members can maintain supervisory visibility over bid and RFP projects. This helps team members learn the ropes more quickly, with full peace of mind that all steps are being followed correctly.

See Bonfire sourcing software for yourself

Join our upcoming webinar for a firsthand demonstration of how the Bonfire sourcing platform supports teams in managing capacity gaps caused by retirements or staff turnover.

WEBINAR: 3 ways eSourcing can address the transit talent gap

June 25, 2 pm EDT  

Experts predict that most of the jobs that today’s students will hold do not even exist yet. K-12 schools have an imperative to evolve curricula and teaching methods to ensure students are equipped with the technological skills, problem-solving abilities, and creativity they need to take on whatever the future brings.

Procurement teams see the evidence of this in the purchase requests that come across their desks. As STEM education becomes more widespread, procurement teams are playing a key role in delivering the right technology to classrooms.

From SmartBoards to 3D printers, technology purchases now make up 25% of all RFPs run by K-12 procurement teams.

IT procurement decisions are more complex and involve more stakeholders than procurement projects for well-understood products and services. As a result, procurement teams have to work closely with educators and administrators to determine what classrooms need and how to get it at the best price, according to applicable rules and regulations.

It’s no small challenge! Here are three key considerations to help you work with stakeholders to facilitate successful IT procurement outcomes:

#1 Consistency

For stakeholders who don’t live and breathe procurement, the RFP process can seem daunting, cumbersome, and out-of-step with the fast pace of technology change. As one school district superintendent put it, “The traditional procurement process is time-intensive, bottlenecking the ability to stay current with the latest technologies and curricular offering.”

Standardizing the RFP policy and process provides everyone with a clear roadmap, which helps to ensure smooth and efficient stakeholder participation.

This has been a key part of Green Bay Area Public Schools’ success in changing the perception of the technology RFP process. In addition to referencing state and local policy to ensure standardization of when and what type of RFP procedure must be used, they have also built out a standard timeline and leverage a common template to build their RFPs.

“Systematizing and building guidelines and procedures into the school district’s culture can help make each procurement a little smoother and less daunting than the one before,” writes Green Bay Area PS’ Chief Technology and Information Officer Diane Doersch. 

Learn more about how Green Bay Area Public Schools ensures effective collaboration in their RFPs in the upcoming webinar “Better Collaboration for Better Classroom Outcomes” with guest Jake Alverson, Director of Procurement, Green Bay Area Public Schools.

#2 Collaboration

In order to achieve the desired educational outcomes of technology purchases, procurement teams, district administrators, and classroom educators need to get on the same page.

It’s easier said than done when busy schedules, geographic distance, and different priorities get in the way.

Procurement teams can lay the groundwork by reaching out to stakeholders at regular intervals to understand their upcoming needs and open up communication channels early in the process.

Another foundation of effective collaboration is providing an easy and convenient way for stakeholders to access project details, communicate, and complete their evaluation. Historically, participation in the RFP process has meant a lot of paperwork for evaluators, with a host of binders, spreadsheets, and emails to manage on top of their day-to-day work. However, eProcurement technology has made it much easier for teams to share information and collaborate virtually, saving time and making it possible to ensure alignment despite geographic distance and busy schedules.

#3 Compliance

Procurement teams are relied upon to guide stakeholders through a maze of federal, state, and local procurement laws, as well as school district policy. As if this weren’t enough, IT procurement often comes with additional compliance concerns surrounding cybersecurity and the privacy of student data.

Procurement teams can leverage resources such as their legal team, internal IT resources, or helpful tools like this edtech evaluation database to help navigate these policies and procedures. From there, it is valuable to operationalize compliance—for example, by creating templates that ensure all clauses are included or using an automated system to manage vendor submissions and collect Conflict of Interest forms. These steps help to ensure that transparency and fairness is built into the DNA of your procurement process.