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Why change, what is wrong with current methods?
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Costly bureaucracy
Cumbersome paper-based requisition, approvals and invoice-matching processes still prevail in most of the Public Sector. The sourcing to payment cycle involves lots of paper and costly manual processes.
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Departmental ‘tribalism’
The Public Sector has a range of approaches from fully centralised to fully devolved. Most are somewhere in between. Departments tend to control their own budgets and manage their own spending. Some degree of front-line decision-making is seen as essential – which is appropriate for some service delivery-related spends but not for everything. Centrally agreed contracts with preferred suppliers tend not to be used. The result? Little useful management information, commitment accounting or control of spending until it is too late. So a change is needed.
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False economy
The problem is that government departments tend to think that because they are in procurement or responsible for buying that they should just do it themselves rather than get “expensive” help. Saving money on consultancy to help them with the procurement and contract management almost certainly results in them spending too much money on what they buy. Investing in a consultant appears not to represent value for money when, in fact, the opposite is true. This results in everyone losing as the customer blames the supplier and vice versa for a poor outcome i.e. over-budget, late, and less than what was expected.The specialist and new nature of eProcurement means that both sides are not expert in the area. Software companies want to sell their software whether or not it is right for the customer. And then sell lots of consultancy to make it work.
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Not just point and click
There is a tendency is to think of eProcurement as “point and click” buying along the lines of Amazon.com. It is really about cost reduction in the supply chain through improved efficiency and effectiveness. “Optimising price and process”. |
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