By David Levi
It’s no surprise that according to Gartner’s Global 2018 CIO Agenda Survey, digital transformation is the number one priority for Government CIO’s throughout the world (18 percent ranked it first). However, the second and third priorities (security, safety and risk at 13 percent; and governance, compliance and regulations at 12 percent) illustrate the inherent challenge most public-sector organisations face. They must deliver transformational change whilst also managing amplified security and compliance concerns.
These conflicting priorities can serve to slow-down progress and it’s a real issue when it comes to digital transformation in the rule and document heavy world of public sector procurement and contract management. Whilst the technology around managing policy, process and information relating to tendering (procurement), buying (purchasing), contract management and supplier lifecycle management has dynamically evolved, the public-sector has yet to fully embrace it. So far, most organisations are only looking to automate downstream purchasing and accounts payable processes.
Why is the opportunity being missed?
There are several inhibitors at play, but they largely boil down to a combination of complexity and fear.
Upstream processes, systems and policies in public sector organisations are bound to considerably more rules than downstream processes. Departmental policy is often seen as too sacred and complex to amend, but it’s a necessity if organisations want to move to this new way of doing business.
Secondly, as leading- edge automation is relying more and more on cloud-based systems, there is still a hesitation when it comes to the security of public-sector data when stored in the cloud. This comes down to perception vs. current reality issues. After all, most Government entities heavily rely on email to enable procurement processes which is much less secure than encrypted cloud. Further, entities already store their data in the cloud every time they use AusTender. The Government’s own Digital Transformation Agency is trying to tackle the perception issue but some public-sector organisations remain sceptical.
And lastly, automation in downstream processes (purchasing and accounts payable) has been around for much longer so people are far more comfortable with its pay-offs and pay-outs. When it comes to upstream, there’s a real concern that automation will mean loss of personnel and an accompanying general fear of adopting a relatively new way of working. It is the classic fear of the unknown.
Embrace the fear and do it anyway
End-to-end cloud-based procurement and contract management platforms offer public sector organisations the ability to rapidly deploy a single portal for all procurement, contract and supplier management tasks, without the need for building highly customised systems.
I’ve seen the transformational effects that the automation of full spectrum commercial information systems can bring to a business and am passionate about the efficiencies and value it creates. So, for me it’s a case of embracing the fear and doing it (in a considered manner) anyway.
And this is why.
Upstream automation significantly reduces the volumes and complexity of downstream transactions by managing the procurement, supplier and contract management processes in a standardised system. The system can be configured to include specific policies to ensure business rules are followed and compliance requirements met.
For example, intelligent automation systems can reduce the lead time to approve the supplier base, cut down on false lead times through purchasing off approved catalogues of items to achieve both efficiency and compliance. They also improve data integrity as the system provides a single source of truth for end to end processes and moves the function to a paperless more environmentally friendly one. In addition, these systems allow procurement staff and suppliers to collaborate on documents in real time, with the system automatically highlighting and alerting staff on document changes that don’t meet predefined business rules. Once the final agreement is reached it is sent to both parties to digitally sign, ensuring greater efficiency, full transparency of the final agreement and records management compliance.
When it comes to the impact on existing personnel, I’ve found that it actually lifts the employee experience and productivity of teams as it eliminates mundane and repetitive tasks. Once these are removed, procurement and contract management specialists can in fact achieve better business outcomes. Productivity is increased and the cost of tendering is reduced as staff have more time to focus on supplier intelligence, supplier relationship and supplier risk management
And finally, the integrated supplier lifecycle management capability means an organisation can effectively manage supplier information in one place. This provides real-time visibility of supplier risk and intelligence directly from within the process, including automating alerts when certain risks or events occur. It really is a game changer for public sector procurement teams as it puts supplier intelligence and risk information at their fingertips to improve commercial decision making.
The real risk is standing still
The real risk when it comes to automation of upstream process is not doing it. The longer you have people doing repetitive administrative tasks, the larger the risk of non-compliance and reputational damage. Not to mention the loss of efficiency and time.
Talk to Callida Consulting about how we can help you achieve end-to-end visibility of your commercial information systems. We empower our clients by providing expert knowledge and advise on how to make the most of their ICT investments.
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