A $10 trillion sector globally, the government market is enormous by any standard — and extremely complex. Although changes have been made over the years to streamline certain processes and practices, several barriers still stand in the way of companies seeking to do business with governments around the world. As such, Public Spend Forum (PSF) , in collaboration with Ivalua and faculty from North Carolina State University, have undertaken a major global study to identify what these barriers are — and how to lower them.
With the ultimate goal of driving on the ground changes effectively, PSF’s study team has rolled out a survey, are conducting extensive secondary research and interviewing suppliers and government leaders to gather deeper insights.
Jenny Doherty is one such government leader, committed to lowering the barriers to entry into government markets. Jenny, Director of Procurement Shared Services at Pennsylvania’s State System of Higher Education, spoke with PSF about these barriers and the challenges government buyers face in connecting with innovative suppliers. She and her team have also adopted several best practices that are making positive changes in the sector.
Biggest Barriers For Suppliers
According to Jenny, there are two primary barriers which pose the most significant challenges to suppliers seeking to do business in government markets:
- The complexities in navigating public procurement websites make it overly challenging for companies to find and appropriately evaluate which opportunities to respond to. A lack of standardization – with every procurement site being different – makes it difficult and time consuming for suppliers to engage. Further exacerbating this is the cost factor — it often takes $6-8K to respond to a state proposal — and sometimes that RFP is cancelled and redone, increasing sunk costs for the supplier.
- Communication gaps and a hands-off attitude by buyers towards suppliers in the market. Too often, Jenny has found that government officials may avoid talking to suppliers due to the confusion on the rules of engagement and policies that exist to prevent these conversations. As it turns out – there are no such policies, but simply just the way it has always been done. This lack of communication then leads to a lack of transparency in conducting business.
How To Lower These Barriers to Entry?
All is not lost, of course. Jenny shared the approaches she and her team have taken to facilitate better collaboration between the Commonwealth of Pennsylvania and innovative companies looking to transact with them.
- Supplier Forums: Jenny’s team does public postings of the meeting data and timings, inviting suppliers to meet government buyers in Supplier Forums. This is done by researching and finding potential suppliers and then collaboratively interviewing them for input on best practices, structure pricing, contract length and networking small diverse businesses with larger companies. Suppliers have gained tremendously from these forums — finding them helpful and engaging — making this approach a great way to develop best practices.
- Eliminating paper procurement has also been key in lowering these barriers to entry. By moving procurement to an online tool and doing a content line-by-line review to eliminate any non-value added language, Jenny has found that the procurement process has become less complex and much more efficient.
- Online pre-proposal conferences are a recent addition to Jenny’s work in procurement and have been making a positive difference in the process. These conferences are recorded and made available online — providing a broader reach for suppliers.
- And finally, suppliers being able to do site visits at public facilities has been a great step in the right direction. This lower barriers by fostering communication and engagement, giving suppliers a better sense of the opportunity at hand. Jenny and her team have also been doing video recordings of public facilities – which is especially helpful and in line with the COVID-19 pandemic’s social distancing practice.
Adopting these and other best practices is leading to government buyers being able to access innovative companies who can deliver products and solutions efficiently to the public sector. Over the course of Public Spend Forum’s study, the PSF team will continue gathering insights and data to collectively lower these barriers to entry.
If you are a government leader or a company already working in the public sector or seeking to do business within government markets, please take 5 minutes now to submit valuable feedback and contribute to real comprehensive solutions to public sector procurement.
Additionally, if you would like to partner with Public Spend Forum in rolling this survey throughout your organization, please get in touch with our study team. We will provide you with unique survey link which will give you an organizational view of the survey results in comparison to the full data set.
More details about this global Barriers to Entry study can be found here.