What will the new year bring for public sector procurement at the city and county level? While every locale has differences based on geography, demographics, previous technology implementations, budget and current maturity level, there are some areas of focus that we expect to see across the board in 2020.
While each municipality may be in a different position regarding each of the 5 areas described below, they all remain prime for improvement, whether from a beginning position to a more mature one or from a mature position to a leadership level.
1. Modernization: It is easy to be lured forward by the promise of ‘the next best thing’ until you start to think about the momentum that will be required to escape the drag of the status quo. In cities and counties, the decision to modernize has been made easier by the general progress of technology and increased public expectations. Legacy systems and homegrown solutions rarely meet constituents’ current expectations, never mind future expectations. Taking steps to modernize procurement systems will increase approval rates, and processes enabled by right-fit technology also enable higher levels of value creation through increased visibility, analytical capabilities and results.
2. Risk Reduction: There are so many large, systemic risks to monitor in the world today that it can be difficult to know where to start. The first step is to know which suppliers the city or county does business with. That information should be maintained in a central location and kept up to date in case it is needed on short notice. The next level of risk management might include identifying and tracking subcontractors and second tier suppliers as well as general contractors/first tier suppliers. For cities and towns that have already made progress in the first two risk-related areas, it is wise to investigate putting a program in place to address cyber threats, which are on the upswing. The best offense is often a good defense, and dealing with cyber threats is no exception.
3. Transparency: The public needs as much visibility into public sector procurement as possible, and that includes suppliers who may wish to bid for city/county contracts. No procurement program can deliver results without a sufficient level of participation from, and competition between, qualified suppliers. For these suppliers, knowing public sector opportunities exist in time to take advantage of them requires transparent processes and systems. Everyone involved stands to gain, as suppliers get the opportunity to grow their business (sometimes with a “hometown bonus”) and cities and towns have the opportunity to partner with members of the local business community.
4. Co-operative Spending: How can public sector procurement make it easier for everyone to get what they need efficiently while still meeting competitive requirements? While eProcurement punchout catalogs are a popular solution, they only work in some categories of spend and are prone to compliance problems. Co-operatives (or Co-ops), on the other hand, centralize demand and have the effect of lowering prices by leveraging buying power while still preserving choice. They are also a good fit in many product and service categories and allow collaboration between cities, counties and states.
5. Supplier Management: If procurement thinks it is difficult to handle implementation internally, they are likely to be very surprised to discover how much more complex and unpleasant supplier onboarding can be if not considered from the suppliers’ perspective. Rather than trying to build a complex ecosystem that may include participation fees, suppliers can be brought on board quickly and easily for individual cities and counties. If this process is handled well, it will also support initiatives aimed at increasing local or diversity spend and protecting the quality of supplier master data.
Improving effectiveness in the above 5 areas ultimately comes down to the quality and accessibility of city and county data. As more decisions are made at a faster rate of speed, the procurement processes and systems that connect needs with services and supplies have to be easy to use in the short run while still positioning high level objectives in front and center.
Jarrod McAdoo brings over 22 years of procurement experience across multiple industries, including higher education, retail, manufacturing, and engineered products. During this time, Jarrod held various roles in category and supplier management including the management of strategic sourcing and procurement teams as well as leading teams in implementing shared service procurement models and source to pay systems. Jarrod holds a Masters in Business Administration from Duquesne University and a Bachelor’s degree from Carnegie Mellon University.