Digital Shift Helping to Define Procurement Best Practice*
Best-practice is an interesting concept. At its most useful, it represents a set of overarching guidelines, rather than a prescribed list of tightly defined methods. This reflects the fact that while procedures may change from time to time, the ideals remain constant. But even if we are clear about the destination, it’s of no use if we don’t know how to get there.
Luckily, within local government procurement we often see best practice most clearly defined in terms of system requirements. Local government bodies understand what best practice looks like to them, so are very clear about what is required in order to achieve this, and given that 211 of our e-Procurement client base are local government bodies across Australia and New Zealand, we’re well-placed to hear first-hand where they think procurement best practice is headed.
The consistent message we hear is that they’re after flexible toolsets to cater for changing practice and organisational structures; cost savings through process efficiencies; risk mitigation through increased transparency and probity; improved supplier equity through better reach; and, ultimately, better individual project outcomes.
Much of this is hard to achieve when relying on outdated, manual procurement processes. Many will know this process all too well: the photocopying, the log book recording of communications, the physical mailing of addenda to each and every interested party… the list is endless and, understandably, exhausting. At every stage, there’s the possibility that one slight error or oversight will threaten the chance of best practice ever being achieved.
In the digital age, best practice is a far more attainable goal simply because the methods for achieving it have been upgraded.
Those 211 local government bodies using our e-Procurement toolset have divested themselves of the manual steps in the procurement process. They no longer have to photocopy every document; manually record every communication into a log book; or mail out addenda to each submitter. Each function is automated within our e-Procurement toolset, meaning every system email is recorded, all supplier queries can be addressed through electronic forums, and addenda can be distributed to all interested parties with a few simple keystrokes.
Through shifting to digital toolsets, these organisations have also built automatic transparency and probity into their process – every step is digitally recorded, easily retrievable and the source of errors identifiable.
Additionally, better outcomes are achieved through increased supplier equity, thus reaching a wider pool of potential suppliers. RFTs, EIOs, RFQs and panel building notices can be easily distributed to a large group of potential suppliers: far larger than those normally available to organisations reliant on their own supplier bases. And with our website registering more than 500 e-Procurement portal searches every week, we know that suppliers are hungry for opportunity. It’s quite simple. More suppliers equals more choice and more choice equals more competition.
But nothing remains still for long. So whether you run a centralised, decentralised, centre-led, outsourced or consolidated procurement model, the best e-Procurement solutions should be flexible enough to meet a local government body’s specific needs, today and tomorrow.
Yet even though more organisations are making the shift to digital procurement, until the manual process goes the way of the fax, best practice seems likely to remain an ideal rather than a reality.
Evidence of this is the performance audit released earlier this year by then-Auditor General, Ian McPhee, which found proof of serious process errors within public sector limited tendering situations. To quote two examples: approval being acquired prior to entering into a supplier arrangement was missing in 26 per cent of procurement cases reviewed, and suitable justification for adopting a limited tender approach was provided in only about two-thirds of cases.
The findings are clear: while only focusing on a single procurement method, best practice has not been achieved or – worse – avoided. Even clearer is that while procurement best practice guidelines may be ship-shape, it’s dangerous to assume that the methods are.
Maybe that’s why those 211 local government bodies have shifted to digital. It’s critical to shoring up the potholes, and through its adoption these organisations are making a statement about what best practice looks like to them, all the while leaving those wedded to the manual method behind.
*Copy supplied by Rob Cook, Marketing Manager, TenderLink