How to achieve digital transformation with a new e-procurement setup
By: Michael Keating
What to consider when selecting & implementing a new e-procurement system
It’s crucial that public procurement agencies realize that a digital transformation is more than taking a paper process and converting it to a software process, says Mike Thornton, who is Purchasing Manager for the city of Leesburg, Fla. A true digital transformation has to significantly change and improve a process, he explains.
There’s one catch to selecting an e-procurement system, Thornton says, and this especially applies to government staffers who are unfamiliar with e-procurement setups. “You don’t know what you don’t know.” He says it’s important for staffers to talk to other agencies to see what they are using and find out what they like about and what they don’t like about a particular system. In addition, buyers should learn what they ‘do not know’ by inviting e few leading eProcurement providers for a demo and discussion before they craft their RFP document. Prospective buyers may also want to reach out to e-procurement user groups for public sector customers, he says.
The Leesburg city government selected the Negometrix e-procurement platform for a variety of reasons, Thornton says. “The primary one is that it provides functionality that will allow us to implement best practice public procurement in the future. The platform can provide functionality for what the future of public procurement in the U.S. should be.”
He says it is important to identify and document the benefits a new system will provide. He adds that it is crucial to include all stakeholders early in the process so they know what is coming. “The Negometrix system we recently implemented provided for the elimination of all paper related to solicitations, as well as separate mails, MS Word and Excel documents. This provided efficiencies in processing solicitations form issuance, acceptance of responses, evaluation and award,” Thornton says. With the Negometrix system, the city has digitally transformed its Solicitation and e-procurement processes. “The transformation has benefited all stakeholders, especially our suppliers,” Thornton says.
Human nature says Thornton, is for public procurement staffers to want to have and rely on paper for the purchasing process. “Educating our users on efficient methods to review responses online was key. Train them to use the system properly so they don’t fall back to printing everything. User training is always the keystone to a successful technology implementation. Some employees will understand a new system once installed, but other government employees are not that digitally attuned and may need some guidance [on the new system].”
Acceptance by suppliers and vendors is also a key factor, Thornton explains. “They are a primary user of the system, and if the supplier side of the platform is not very good, then your suppliers will be reluctant to use your system and ultimately not submit bid responses. This will result in decreased participation in solicitations.” He says suppliers generally welcome the new e-procurement technologies that procurement departments adopt. Thornton confirms that he has seen an increase in the number of bidders on Leesburg, Fla. bids. He attributes the increase due to the city’s abandoning its inefficient paper bidding process.
The platform provider should make good guidance and support available to everyone, including suppliers, Thornton says. “Today, suppliers have to deal with a multitude of e-procurement solutions in the market. Your agency’s e-procurement solution is another new one they have to learn and use. The system you select must be evaluated from the supplier perspective as well as the agency perspective.”
Make sure that the e-procurement system selected will meet your department’s needs in the years ahead. “Be sure the solution you select is future proof. Does it provide the functionality and features you may need in the future?” Thornton says some procurement staffers lose sight of this as they move from a manual paper-based system. “So a new digital system can be overwhelming. They are happy with anything that would be better.” Department staffers are satisfied with the efficiencies gained in inviting and managing bid evaluators. They say the system’s ability to tabulate results saves time and gives more control in overviewing the buying process.
He says the automated e-procurement setup in Leesburg has achieved efficiencies in the bid invitation, management, evaluation and tabulation processes. “The efficiencies have helped us save time and give me more control in overviewing the buying process.”
Her city has achieved several technology successes, says Kristina Peralta, Director of the city of San Diego’s Purchasing & Contracting Department. “Part of the reason that we have been successful with our digital transformation is that [so] little attention had been given to our procurement functions — where we could make a strong business case for ourselves.” Procurement professionals need to be vocal and articulate about the benefits of a digital transformation, and champion their department’s needs — even when the pathway is uncertain, says Peralta. ”Change management isn’t easy–not just because people do not like change; it isn’t easy because of the uncertainty on the other end. Implementations are made or broken by the relationship between IT and the business. I have been very fortunate to have a great team on the IT side as a partner,” Peralta says. The city of San Diego has been using the PlanetBids system since 2014 for bid announcements and solicitations. The city is in the midst of implementing an end-to-end e-procurement system.
In Santa Clara County, Calif., getting feedback from suppliers and procurement staffers was crucial, says Jenti Vandertuig, former Chief Procurement Officer from 2004 to December 2017. Vandertuig was responsible for selection, adoption and implementation of an e-procurement system in the county. Deep-dive implementation of the system took place 2014-2016. Home to Silicon Valley, the county of Santa Clara serves 1.8 million people across 15 cities with a $7 billion annual budget.
Collaboration and careful listening was very important in the county’s e-procurement digital transformation and implementation, Vandertuig says. “One of the biggest areas where we came together—we brought in suppliers to talk about problems they experienced with our procurement processes. We had 300 staffers — the people who are doing the procurement processes — they showed up at our implementation meetings. The staffers shared their pain points.”
Vandertuig’s team included accounts payable personnel, budget analysts and procurement staffers. They reviewed and analyzed all the county’s manual procurement processes to find a solution. The team went beyond just putting in a contract module to manage over-spend. Vandertuig spotlights the efficiencies the county achieved through the e-procurement system implementation and setup: “It used to take 4 weeks to get a requisition into procurement. After implementation, our solution enables us to get 96% of payments made on the same day within procurement.” The county’s e-procurement setup relies on ERP vendor SAP along with the SAP Ariba procurement cloud solution.
In conclusion, Mike Thornton in Leesburg, Fla. believes public procurement should be taking the lead in digital transformation within their departments. He says governments can be overly cautious, and he urges procurement staffers to embrace the new technology, and not hold it back.
Some of the features available in the Negometrix platform:
Basic & advanced online sourcing
Extensive capabilities for evaluation of bids
Vendor pre-qualification systems
Supplier relationship management
Very easy to use (without logging in)—Through the system, purchase request forms are available for use throughout the organization
With the 100% Negometrix digital system, procurement teams can develop more sustainable practices, make better decisions, and protect the selection process, all while keeping compliance front and center. Go here for details.
How e-procurement works in Europe
The e-procurement experience is quite streamlined in Europe. There, public procurement processes have been all-digital by law since 2018. In Europe, if a supplier submits an offer on paper, a public agency can no longer accept that offer, due to the European Union requirements. The shift to all-digital has led to governments’ receiving more bids and increasing supplier responses to those bids. In addition, more small and medium-sized enterprises (SMEs) are participating in solicitations because electric bidding is cheaper and is much less cumbersome that bidding on paper. In addition, data security measures in Europe are quite advanced and comprehensive. In Europe, GDPR, ISO 27001, and ISAE 3000 and EUplat standards are currently in place to audit and certify leading eProcurement solutions.
E-procurement platform providers that got their start in Europe tend to have more advanced features due to their practical experience with e-procurement. Prospective users should reach out for information to European platform providers that have deployed in Europe (such as Negometrix) as well as providers in the U.S. Prospective users can then compare and get insights on what the various e-procurement solutions providers can offer.
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