It might seem like the UK government is lagging behind in digital transformation, and it is, kind of. There are sectors that are world leading when it comes to digitisation; for example, Healthcare and ICT. But there are also sectors that are definitely behind the times in digital maturity and they are primarily in local government.
It’s not really surprising when you think of their limited budgets and laundry lists of public services they need to deliver. However, change is happening and suppliers looking for local and central government contracts would do well to ensure they are on the ball and up to date with their digital technology strategy.
Lollygagging will get them shunted off approved supplier lists as more advanced companies come to the fore. But how can they maintain a competitive edge in an increasingly competitive market?
We’re going to take a look at how digital transformation is shaping public procurement and what suppliers must do to stay relevant in their field.
How eProcurement Platforms Are Driving Digital Transformation In Public Procurement
eProcurement platforms revolutionised public procurement by providing a single source or central hub where public sector buyers can publish contract notices and suppliers can set alerts for contract notices that meet their search criteria.
Search criteria includes type of contract, field, location, contract size, etc. As soon as a contract that ticks the right boxes is published, suppliers receive a notification in their inbox. Basically, eProcurement platforms for suppliers can give them the headstart they need to stay ahead of their competitors.
One of the many great things about these platforms is the way they simplify public procurement processes. Supplier data is stored so they don’t need to enter their details repeatedly when they bid on contracts.
Some eSourcing platforms also provide customisable templates which suppliers can adjust to meet each contract’s unique requirements.
Government buyers benefit because they don’t have to publish contract notices across many different platforms. For instance, a contracting authority might publish a contract notice on the government’s Contracts Finder, and eProcurement platforms pull the data and automatically add tender opportunities to their database.
Tender responses also come from a single source, which helps to ensure consistency and virtually guarantees compliance with critical legal and procedural regulations.
Key Technologies Driving Government Procurement Technology
We’re seeing increasingly advanced tech, designed to simplify tendering processes, create, and save time, costs, and resources. Artificial Intelligence (AI) and Machine Learning (ML) are two of the most significant emerging technologies.
AI automation plays an important role in procurement, as it can carry out tasks like contract management, strategic sourcing, and risk mitigation, and can also enhance data-driven decision-making.
Machine learning is a ‘thinking’ tool that crunches data and recognises patterns that facilitate informed decision-making. It’s capable of interpreting large volumes of data at super speed. Data analysed includes past purchasing, supplier performance, and market trends to more efficiently optimise supplier selection and inventory levels, as well as forecast market demand.
How is AI Being Used in Procurement?
AI in digital transformation is used in several ways, including (but not limited to):
Spend analysis: Analytics pinpoint saving opportunities, which leads to more efficient resourcing and provides the data behind spend management.
Sourcing: Machine learning detects patterns in supply trends, which can be used to forecast developments and enhance sourcing nationally and globally.
RFX generation: AI automation can generate the RF suite, including Requests for Proposals (RFPs) and Requests for Quotes (RFQs). One of its functions in this area is drafting questions to identify only the most suitable suppliers.
Supplier risk management: AI detects changes with suppliers and can determine the potential risk to government services.
Contract lifecycle management: AI automation can generate the first drafts of contracts, support negotiation, monitor terms and conditions, and track timelines to ensure suppliers meet their deadlines.
The onus is on suppliers to develop strategies that ensure their reputations never flag, the quality of the services or products never falters, their supply chain is immaculate, and they are always compliant with regulations. This requires constant market research, competitor research, and research into UK government buyers’ patterns. Fortunately, AI works just as well for suppliers, so they don’t have to waste time and resources on grunt work.
Digital Contract Management Systems
Automation is big in AI, and it’s big in contract management systems too. Algorithms have advanced to the point where they can carry out contract reviews and analysis at the same time and improve accuracy in the results. The time saved is significant but not as important as the insight into risk management, especially as it relates to regulatory compliance.
In addition to enhanced efficiency, automating manual processes in digital contract management provides real-time data visibility that facilitates communication and collaboration and, ultimately, increases transparency.
Clear communication and increased transparency help accelerate contract negotiations because all the information is on the (digital) table for all to see. Its accessibility means that signatories can give contracts the go-ahead no matter where they are. Digital technology ensures there’s no need to be physically present.
Benefits Of Digital Transformation For Suppliers
We’ve already mentioned some benefits for suppliers, but here they are in more detail.
Because details are only entered once, the rest of the procurement process is quicker and more efficient. And with templates and documents stored in your account, there is much less paperwork and admin than in old legacy systems.
Some of digital services on the more advanced eProcurement platforms go much further than merely publishing tender alerts. Some include profile management services and resources, like webinars, blogs, and guides. There are also platforms that provide data analytics and these are worth their figurative weight in gold.
Data analytics can include comprehensive market overviews, custom query builders, and customisable dashboards. You get access to real-time data, advanced search and analysis tools, and features that provide tailored insights for insightful decisions.
Many public sector digital procurement platforms are structured to update compliance details when regulations change or are adjusted, so your tenders always meet compliance requirements, including mandatory security standards like ISO 9001.
How To Align Your Business With Digital Transformation In Government
Suppliers can take several steps to ensure their businesses keep pace with digital transformation. For a start, they need to adopt the digital technology that is already changing the face of government procurement. Then they need to implement automated procurement systems as soon as possible. Immediately, they benefit from greater accuracy and quicker response times to published contracts.
New strategies must incorporate procurement data analytics, so you gain greater insights into the market, government leaders, your competitors, and government buyers’ behaviour, and take advantage of opportunities as they arise, while avoiding risks that appear on the horizon.
While all of this development is going on, you also need to ensure you’re compliant with cybersecurity and data protection regulations.
The Future Of Digital Procurement: What Suppliers Should Expect
Digital procurement can look forward to an interesting future in which AI and automation play an increasingly large – and convenient – part.
Take blockchain technology, for example. One of the primary benefits is its transparency, which makes it easy to track and trace all interactions and transactions. The way blockchain tech is structured ensures that data is tamper-proof. It’s a perfect audit trail that can be used to unequivocally settle disputes or double-check agreements and criteria.
All of this transparency goes a long way towards building trust among stakeholders and encourages collaboration up and down the supply chain.
However, AI in public procurement isn’t all happiness and roses. There are many challenges that must be overcome. In an effort to address these challenges and take control of AI in procurement, the UK Cabinet Office published a Procurement Policy Note (PPN 02/24). It addresses the use of AI in bid writing. Some of the measures include:
- Requesting suppliers to inform buyers when they use AI in their tender, particularly where it was used.
- Ensuring suppliers don’t use confidential authority data to train AI algorithms.
- Ensuring suppliers can fulfil the contract because AI has been known to fabricate information in tenders.
- Buyers must ensure they can manage a potentially enormous increase in tender responses because AI makes it easy for suppliers to submit more bids on more contracts.
Digital Transformation in the Public Sector
Digital transformation will continue sweeping through government transformation and public sector procurement, bringing a host of changes in its wake. The government is doing its best to ensure that central and local departments have the new technology they need to keep on top of trends and developments.
Less has been said about suppliers in the digital sphere. However, it stands to reason that if their buyers keep up with modern technology, they must follow suit or risk losing out to their more tech-savvy competitors.
Once suppliers are up to date with digital developments, they should cast their eyes on the future. Using their (predictive) analytics skills and tools they can anticipate which direction the market will take and put their innovative minds to work, developing new and improved products or services. The kind of headstart gained will be invaluable in the competitive public procurement sector.
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