The role of digital in public sector procurement

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It is estimated that the UK economy could grow by £232bn over the next two decades if investments in digital technologies continue, representing 6.9 percent growth by 2040.  

According to a McKinsey & Company study, Covid-19 has accelerated digital transformation by seven years. The pandemic-induced acceleration is resulting in a growing shift to online channels, both for consumers and organisations – from online grocery shopping to complex government initiatives. 

Accelerated digital transformation

To limit the spreading of the virus, the UK Government has had to co-ordinate an extensive response and in doing so, public organisations have had to focus on rapid procurement of a large volume of goods and services. Social distancing and lockdown have forced organisations to progress their digital transformation initiatives at accelerated speed, implementing new digital processes practically overnight. According to NHS Digital, 38 percent of people have increased their use of NHS technology since the start of the Covid-19 outbreak, with registrations on the NHS app skyrocketing by 111 percent in March last year.  

It is estimated that digital transformation of public services can reduce costs by 30 percent, as well as laying a critical role in increasing productivity, reducing administrative burdens and offering better and faster services. One of the main challenges for government departments at this time is being able to deal with the large volume of requests while working with limited resources. Cloud solutions can help to resolve these pain points, by facilitating service delivery and automated workflows, with prioritisation and categorisation of requests, as well as data insights to identify performance patterns.  

G-Cloud, the government framework facilitating the purchase of commoditised, cloud-based services, is a positive move away from long term contracts, offering transparent supplier information, including service offerings, pricing and terms and conditions. 91 percent of suppliers are SMEs, providing access to a range of smaller suppliers and supporting the government’s commitment to spend £1 in every £3 with small businesses. 

Data is the new currency

Boston Consultancy Group estimates that digital solutions can generate saving between 1% and 3%, by reducing the end-to-end time for procurement processes by up to 80 percent for standardized items like office supplies and by 40 percent for more complex items like capital spend.  

Comprehensive, up-to-date, and publicly accessible data is essential, not only to manage public sector procurement better, but also to identify the best sub-contractors for a contract, predict tenders that only attract single bids, and spot fraud and collusion. However, instead of focusing on over-protective measures that stifle innovation, data should be used to shed light on the actual risks associated with contracting. 

Naturally, driving successful digital transformation initiatives in the public sector doesn’t come without barriers. Traditional procurement frameworks often struggle to offer a fast and compliant route to market, creating significant roadblocks for innovative suppliers in the digital space. However, the disruptions of Brexit and Covid-19 bring opportunities to recast public sector procurement with a fresh focus on data and context. 

Finally, with the governments drive to support more digitalisation, make the Civil Service more effective for the future demands on the public purse and ‘Build Back Better’ commercial functions are an integral part of the solution and are being asked to provide more and more strategic support on complex answers for government.       

4C’s Public Sector team’s extensive knowledge and Chief Executive-level experience gives us a deep understanding of the sector’s rapidly changing nature, how to make the most of the opportunities that exist with the statutory regulations and the importance of customer, cost and culture. We help public sector organisations across Central Government, Local Authorities and the Health Sector improve front and back office services across their organisations. We also work with internal and external stakeholders and third party suppliers to ensure total cost of ownership for the tax payer and the public purse.  

4C are successfully on Consultancy 1, Consultancy2 and G Cloud 11 frameworks. If you like to find out more, please contact Mark Ellis at mark.ellis@4cassociates.com.

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