Tech is changing the government procurement landscape, report says
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Governments are exploring digital solutions to improve the procurement process, and, ultimately, the tech products they purchase, a new report says.
As the public sector increasingly grapples with shrinking budgets and growing demands to be more efficient, a new report underscores how technology is helping governments improve procurement and open the doors to innovation.
Among government agencies, there is a growing appetite — particularly among those with a small or underresourced staff — to consider how automation and digital transformations can help streamline the procurement process and reduce purchasing costs, according to a report from software company Euna Solutions. The report is based on a survey of more than 300 public sector procurement professionals.
When it comes to procurement, it’s becoming more pressing for the public sector to do more with less, Tom Amburgey, CEO of Euna Solutions, said.
“One of the ways you can attempt to accomplish that is through ensuring that you’re doing the best job possible in procuring resources,” he said.
Digital tools, for instance, can automate parts of the procurement process, like supplier sourcing and contracting software, saving procurement teams an average of $34,762 per project, according to the report.
The findings also pointed to agencies’ increasing interest in purpose-built procurement tools to close inefficiency gaps throughout the purchasing process.
“While most procurement departments use foundational tools like purchase order software and [enterprise resource planning] — which remain essential for tying data across departments — many still lack specialized solutions to meet procurement’s unique demands,” the report stated.
For instance, about 60% of respondents said they have or plan to adopt purpose-built tools for specific tasks such as invoice automation and contract lifecycle management, according to the report.
Compared with the private sector, governments have to comply with different laws, processes and standards for purchasing, Amburgey said.
“There’s usually more approvals that have to happen [and] paperwork that has to be tracked,” he explained. “Therefore, the technology needs to be built out to try to lessen the impact of that lift as much as possible.”
Another 24% of respondents said they also plan to or currently leverage supplier performance monitoring software, the report stated, which Amburgey said has been an aspect of procurement that agencies have previously overlooked.
The growing interest in supplier performance solutions comes amid procurement teams’ increasing shift to a more centralized model across governments rather than having individual procurement departments in each agency, he explained.
A centralized approach helps procurement teams standardize accountability and transparency about how public dollars are being spent, easing the burden of separate procurement doing so, Amburgey said.
“The more that you can streamline and centralize any kind of [government] function, the more time you’re freeing those individual departments to be able to function and focus on their job,” he said.
A major driver behind governments’ efforts to improve procurement is their increased attention on artificial intelligence and how to introduce the tech to further boost operations and service delivery, Amburgey said.
“Most governments are being very thoughtful about how they roll out AI for people who are concerned with safety … and their privacy,” he said.
Procurement is one aspect of government where implementing AI can help officials demonstrate the positive impacts of the technology for concerned community members and stakeholders, Amburgey said.
“While adoption is early, practical use cases are already demonstrating value, such as AI-enabled invoice analysis that flags payment discrepancies before they become costly errors, and marketplace tools that rapidly analyze and compare goods for best-value purchasing decisions at scale,” the report stated.
Governments can leverage such outcomes to prove to the public that AI can be a force multiplier to reduce staff’s workloads, cut back on government expenses, and, ultimately, set agencies up for improving how they procure tools in the future through better digital solutions, Amburgey said.