Spend Matters welcomes another guest post from Dan Warn of BravoSolution.
In my last post, I made the argument that the U.S. government could benefit from applying some of the procurement and contracting strategies and tactics used in the business world, specifically spend analysis.
Spend analysis solves the transparency issue. The next step is to streamline the actual acquisition of goods and services. Automating the procurement, contracting, and acquisition processes—also known as e-sourcing—would overcome several challenges hamstringing efficiency in government sourcing today:
- Under-skilled and understaffed procurement teams
- Manual processes and out-of-date technology solutions
Government contracts are often big, complex, and tough to wrestle to completion—from crafting the RFx to reviewing submissions to signing on the dotted line. But in many cases, a simpler, technology-driven process can reduce the time required to launch a sourcing or contracting event, make evaluation of bids much easier, and enable the communication needed to ensure that suppliers know what the agency is looking for and can package up the offer that’s most needed.
E-sourcing solutions go straight to the heart of inefficiency, automating best-in-class sourcing processes. Leveraging technology to streamline every step of the sourcing process lets agencies focus on more important matters. E-sourcing solutions make it possible to do the following:
Stop reinventing the wheel: A library of RFx templates, along with a customizable sourcing process manager tool lets users leverage the best of what’s already been created, and tweak it quickly as needed.
Compare apples to apples: Based on customizable pre-defined criteria, e-sourcing solutions collect and aggregate scores from evaluators and quickly and accurately narrow down the top candidates for final award recommendations – eliminating the hard and human-based work of data entry and spreadsheets.
Level the playing field with communications: With a console where suppliers can see the Rfx, get updates and reminders, ask and get the answers to questions others are likely to have and ultimately learn the outcome and rationale for the choices, users don’t spend untold hours answering questions, clarifying requirements, or defending the final award.
Consider the experience of the Musanada, the procurement agency of the government of Abu Dhabi. Encumbered by inconsistencies and inefficiencies hidden in paper-based sourcing and acquisition processes, Musanada’s team know that they were missing out on savings opportunities. With an e-sourcing solution, they cut the time required to create and issue an RFx from two weeks to two days; eliminated more than 50 percent of the manual analysis required to evaluate bids; and built an auditable trail of the selection process, protecting integrity and ensuring fairness.
Now able to run sourcing events quickly and efficiently, the team has captured compelling savings. One reverse e-Auction lasted 51 minutes, and uncovered $270,000 in savings; another at 48 minutes saved $918,000.
When the obstacles of inefficiency and lack of resources are removed, there’s really no limit to the effectiveness of sourcing and value that government procurement teams can deliver in terms of cost reductions, optimal choices for goods and services, and transparency. In other words, do their jobs.