In recent years, procurement functions within the private sector have recognised the value of cloud technology and solutions, to the extent that procurement can play an integral role in the organisations move to digitalisation. This involves utilising cloud Procure to Pay (P2P) and Source to Pay (S2P) solutions to drive value for money. Despite the benefits reaped within the private sector, this is not a trend that has been replicated within the public sector to the same extent.
From our experience, the main challenges that face the public sector and contribute towards a reluctance to transform their procurement function fall within three areas: data security, appetite to change and the initial cost of implementation. Are these concerns really justified? Or is it time that public sector organisations buck this trend? We would suggest the latter.
To alleviate concerns around security, cloud providers have an obligation to abide to standards such as SOC 2 Type II and are independently audited. Vendors are also often better equipped to manage data centres and have vested an interest in ensuring that data is secure with their product and therefore reputation on the line. The Computer Business Review recently highlighted this, stating that “any significant breach would severely impact user confidence and directly impact their revenue”. If there is one thing that we can ensure, it is that vendors will protect their own interests.
Approach to risk
The second challenge is overcoming the risk averse mindset within public sector organisations. Being risk averse is not an issue, however a measured approach, weighing reward as well as risk should be taken when driving transformation. Within the public sector there is a greater emphasis that a procurement function obtains value for money due to public scrutiny. In order to fully achieve this, there needs to be a change of mindset where risk is challenged and innovation is embraced. From our experience, this would take the form of a properly designed and implemented cloud P2P, S2P or a hybrid solution.
Lastly, the costs associated with implementing cloud-based technologies and the complexities this brings, has led to these solutions being viewed as ‘nice to have’. This overlooks the benefits of implementing a single source solution, as value and savings obtained can not only transform the procurement function operationally but also contribute to the success of the organisation in a wider sense. Ivalua conducted a study that involved 210 procurement professionals and found that a well implemented S2P solution is “a true performance driver” and that “Performance gains are more obvious in homogeneous suites environments”. Compare this to public sector organisations, where procurement systems are often rigid and disconnected – this often results in inefficiencies and can hinder performance.
Despite the concerns raised, there is an emphasis from public sector organizations to move towards cloud-based solutions as highlighted in the 2017 Government Transformation Strategy. The problem is, where do you begin, what value will these solutions bring to your organization and is it feasible? This is where 4C can help, as we can identify the right solution for your procurement function. Whether it be a hybrid or solely cloud based solution, implementing either of these options will obtain improved performance and greater efficiencies. Additionally, this guarantees your procurement function to be more strategic, effective and integral to the organization. 4C can act as the springboard to reap the benefits of cloud solutions and empower your business to strive for the better.