What States’ Top Procurement Priorities Mean for Local Governments
The National Association of State Procurement Officials (NASPO) recently released the Top Ten Priorities for State Procurement based on a ranking from state procurement leaders across the country.
State priorities often set the agenda for thought leadership and programming for the profession, but what do they mean for local governments?
Here’s our take on them:
1. Strategic role of state central procurement
While you may not be considering moving to centralized purchasing, new web-based technologies can help leverage government-wide spending, improve communications across departments and engage procurement stakeholders in operations and risk management.
2. Procurement workforce development
With greater scrutiny of procurement practices, now is the time to ask for conference-based training and tools to better equip your team as well as consistent adherence to (and documentation of) best practices.
3. E-procurement/ERP Solutions
It’s no longer hype or speculation—paper and Excel-based processes are being replaced with online systems at an increasing rate. Web-based procurement tools can impact everything from vendor and bid management to strategic purchasing to contract management. With online centralized and standardized processes, purchasing is more efficient, compliance is easier and attainable and document sharing across departments (and suppliers) is a breeze.
4. Measuring performance
Performance measurement is not to be feared; rather, it will be an opportunity to elevate the purchasing function. Residents are questioning the return on investment (ROI) of their tax dollars, and it all starts with purchasing. With online systems in place, data will be your ally as you demonstrate your ability to do more with less, and it’ll help identify areas where improvements can be made quickly. Beyond internal performance, process and performance tracking will be key in addressing contested bids and fairness of opportunity complaints.
5. Effective sourcing strategies
You may not be large enough for category management, but you certainly could be driving more competition, evaluating ‘best value’ and collaborating with neighboring communities to increase purchasing power. All of these bring short-term cost savings and only require a nominal investment in improved systems and adoption of best practices.
6. Staffing and talent management strategies
With increasing turnover in purchasing departments of local governments, we’re seeing younger and more tech-savvy employees driving more change, including better communications, using data in decision making and a more customer-centric view.
7. Information Technology
Increased adoption of online solutions will bring new (but manageable) challenges for local governments. Purchasing professionals will face a steep learning curve when it comes to new IT solutions. SaaS (Software as a Service) solutions have new contracting and pricing models, including “freemium,” month-to-month subscriptions and pay-by-the-drink.
And, don’t forget cyber security. It’s a hot topic that’s alarming but easily manageable if addressed early and taken seriously. Also, look for more self-service online solutions that mitigate dependence upon short-handed IT departments (while elevating the importance of purchasing).
8. Contract Management
Understandably, procurement has garnered a great deal of IT investment to improve efficiency and decrease costs. However, those savings quickly evaporate if the contracts and vendors aren’t effectively managed post-purchase. Paper-based contract management is one of the biggest culprits, so look for contract management to move online. Web-based contract management systems help ensure deadlines aren’t missed, contractors stay compliant and all contract stakeholders have access to the documents and information they need—24/7, whether in the field or in the office.
9. Cooperative Purchasing
There’s lots of promise in Cooperative Purchasing, however, there will be challenges balancing the interests of your local businesses as well as working with disadvantaged and minority businesses. To deal with these issues, look for opportunities to collaborate with neighboring communities to capture the benefits of cooperative purchasing while supporting local and regional businesses.
With hundreds of cooperatives and thousands of contracts, another challenge will be readily identifying relevant purchasing options when you need them (e.g., during a condensed purchasing cycle).
10. Procurement reform and state-wide centralization
States are tackling issues such as modernizing procurement codes and laws, ethics reform, transparency measures and consolidating the purchasing function. Change is coming, but what kind of change? Rest assured, though—those cities, counties, schools and other local agencies that work to replace paper with data, standardize and move processes online and embrace customer-centric attitudes will be able to more easily implement (and even thrive under) reforms.
What do you think about our take on how state purchasing priorities will affect local governments? Let us know in the comments below!