Procurement Technology: Why is the Public Sector Absent from the Table?

By Raj Sharma posted 13 days ago

  

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While private sector companies invest billions to innovate and create commercial technologies that streamline and improve the procurement process, the federal government (especially) and local governments (to some degree) continue to lag way behind, choosing to build custom applications and spending hundreds of millions in the process.

Below are some quick highlights of how technology is helping reshape public procurement and government contracting:

  • Artificial intelligence and machine reading are here in a big way to help improve transparency, collect and organize unstructured data, and present data in a way that intuitively identifies opportunities for improvement. Some interesting presentations included IBM’s use of cognitive learning through its Watson platform and Tamr’s products around integrating large datasets from multiple disparate sources.
  • Shopping made easy through platforms such as Amazon Business that make it simple for users to shop and get the best pricing.
  • Process optimization tools such as Coupa’s e-invoicing platform or Bravo’s sourcing technologies.

These are just quick highlights. There’s a lot more happening in the procurement technology space and it is critical that the public sector make it a priority to explore and leverage commercial technologies to the maximum intent

What does this mean for the public sector and public procurement in particular?

  • Stop building custom solutions. The private sector is doing the job of investing hundreds of millions of dollars in solutions. There is significant innovation in the space. The public sector at a minimum should explore commercial options before building custom.
  • Understand and prioritize commercial procurement technologies. The public sector should invest in better understanding the entire procurement technology space and prioritizing potential solutions that can address the biggest needs.
  • Create pilots and test multiple solutions. Governments should pilot different solutions which can be done quickly and at a very low cost, without investing hundreds of millions of dollars.  There is already a strong movement afoot by the US Digital Service, 18F and others to use pilots and this is another space that offers significant opportunity.

The pace of innovation in procurement technology is exciting. It is a shame that more of the public sector isn’t exploring the potential. Let’s make it a priority to do so going forward.


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