Can Procurement Save the Government?

Think about the role of effective government: defend the nation from risks and support the citizens, with minimum tax burden. And in a capitalist society that is of, by and for the people, the government needs to tap market innovations of the same people it serves to solve big problems, be it national security, healthcare or recovery from disasters.

The same is true in commercial enterprises. Procurement in companies is chartered with bringing in innovations and helping defend the enterprise from external risks in the supply chain while also helping maximize value to demanding stakeholders. Those stakeholders (customers and shareholders) want maximum value from their money ­— including the money invested in procurement. They hate bureaucracy and love results, whether common national needs (e.g., defense), state-level needs (e.g., transportation) or local needs (utilities).

Obviously finding the right partners helps solve big problems. A good place to start is by looking at where we are right now with government procurement and with private sector procurement to look pragmatically at what sets of strategies, techniques and tools can be transplanted from one to the other to drive innovation. This effort is massive and not addressable in a blog post (or in 100 posts). Rather, it’s a journey, an evolution, a learning process and a conversation to pursue in earnest.

Now more than ever we need to listen to each other and find the best capabilities we can collectively muster, one small win at a time, but with an eye to a broader prize. Personally, I want to devote more of my time to Public Spend Forum, which is geared toward exactly this purpose of bringing the best ideas from government, private industry and non-profit NGOs for the collective good of taxpayers. I strongly and passionately believe that the approaches that the best procurement organizations use to build these victories with diverse stakeholders in highly political environments can inform a broader transformation within what is the ultimate national shared service.

Finally, this transformation is becoming inherently digital. Technology has shown to be a major force of good, as well as harm, in some cases. It’s both a competitive leveler and also a vehicle for building oligopolies. So, we had better get our collective crap together and master such technology in a way that promotes transparency, openness, choice and security.

This is doubly true for procurement. If supply markets are going digital, then procurement must do the same to even be relevant and earn the right to be a transformative force. The great news though is tech-enabled capabilities are emerging that can tame the massive complexity inherent in public sector value chains — if we can learn how to adopt them properly and propagate their use.

In my next post, I’m going to get a little more specific on some of the problems in public sector procurement (from a mostly outsider’s perspective) and how emerging procurement technology can go beyond automating bureaucracy and be used to fundamentally transform procurement and the value chains that serve us all.

Also, if you can make it to Washington, D.C., on Wednesday, October 18, Jason Busch and I will be be part of a national convening of government leaders, entrepreneurs, venture capital firms and experts on how technology can enable procurement innovation and goals. Join us, and find more details here. Stay tuned for more on this event and this topic!

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