Many procurement experts are discussing a new model for the public sector that builds a strong relationship between local governments and suppliers. By initiating a common system across all government, agencies can uncover similar purchasing needs, identify discrepancies and take advantage of savings opportunities through volume-based discounts. To achieve these endpoints, procurement strategies must be fine-tuned to optimize savings potential.
According to Dan Warn, Vice President of supply manager BravoSolution, procurement best practices for the public sector include:
- Analyze spending. Spend analysis, when completed correctly, provides a foundation for procurement transformation. Without having insight into your current cost structure, it makes it impossible to make informed decisions on where to cut costs or increase your budget. Once spending visibility has been achieved, it opens the door for collaboration and sets the stage for leadership buy-in—making spend analysis the first and most important step to a successful transformation.
- Develop talent. With the procurement landscape changing, it’s critical the team is well-versed in stakeholder management, data collection and analysis and finance. Relational skills are also important as procurement moves away from operating in a silo and increases internal collaboration across organizational departments. Continual development of talent and partnering with skilled procurement technology providers will be key for sustained sourcing success.
- Constantly collaborate. There are currently many opportunities to share and collaborate with other agencies. Public organizations are all on the same team, with the same mission, and peer-to-peer collaboration can make everyone’s jobs easier. Make it a priority to share tips, best practices, content and knowledge on a regular basis—it will help foster process innovation and ultimately give stakeholders better value for their money.
- Facilitate adoption. Successful public sector procurement teams understand the importance of making sure new users, both buyers and sellers, are educated on how to optimally use the new technology at their fingertips. A change management framework that outlines a training plan for the chosen solution and addresses each step of the transformation process is integral to the success of any modernization initiative.
By following these steps, Warn argues local governments and agencies will create a transparent open bidding process to ensure the community has visibility into all procurement activities and contract awards.