Government Procurement Officers: What You Should Know About Procurement Software
In this age of ever-present technology, it’s quite a surprise that 22 percent of public-sector purchasers do not use procurement software of any kind.
In October, The Institute for Public Procurement (NIGP), based in Herndon, Va., announced this interesting statistic—and many more—among the results of the “2011 Member Survey: Use of Procurement Software in the Public Sector.” Nearly 500 participants, heads of procurement at all levels of government, throughout the United States and Canada (including procurement officials in city, county and state governments, and K-12 district schools and public universities) responded to the survey with their thoughts on the state of the industry.
The survey—conducted online via an email invitation —reached 2,269 purchasers with 499 responding to questions. With support from NIGP’s research partners SciQuest, Inc. and Deltek, the survey explored the use and benefits of procurement software throughout public agencies.
For procurement officers, the survey results show the vital inner workings of competitor organizations, as well as the technological future of purchasing. Here’s what you should know about the use of procurement software in the public sector.
Tina M. Borger, executive director of business development and research director at NIGP, identified some significant results from the survey:
A surprising number of procurement officers aren’t using any procurement software
- 22 percent of those surveyed—even the larger entities—do not use procurement software of any kind.
Some are planning to invest in new software
- 35 percent of organizations currently using procurement software are planning to invest in new or additional procurement software.
- 26 percent of those not currently using procurement software are looking to implement new software.
Most are using very old software
- 80 percent of respondents using procurement software have been using it for five years or longer.
Most are not using available management tools
- 73 percent of respondents using procurement software are not using available supplier performance and risk management tools.
Very few are tackling new initiatives
- Only 12 percent reported new initiatives, such as updating and upgrading their systems to provide extra system tools and features, in the past three years.
But what do these findings illustrate? Borger says procurement has evolved so much in the past decade that the use of technology is essential. “We are no longer simply placing orders,” she says. “We are a strategic function in the organization that relies heavily on data, analysis, problem solving and creativity—technology supports this role.”
The value of procurement software in the workplace
Darin Matthews’ everyday routine’ ev;’ was completely modernized after his department implemented a software solution to streamline approval processes, reduce paper waste and allow staff to focus on other tasks. As chief procurement officer of Metro, the regional government in Portland, Ore., Matthews’ office underwent a technology renovation in 1998, allowing electronic requisitions, online reconciliation of procurement cards and a wide range of contract reporting tools. Just last year, the software was upgraded with automatic workflow notification, so managers with budget authority, could receive emails reminding them to electronically approve a certain procurement action, such as a purchase order, contract or payment.
Matthews, a participant in the 2011 survey, says the update streamlined the approval process, reduced the amount of paper used and allowed staff to focus on other activities. “We decreased the mundane tasks through automation,” he says. “I would rather my professional procurement staff be developing complex RFPs, rather than running around trying to get signatures and approvals on contracts.”
Many are concerned that switching to a software system will result in a steep learning curve for officers so familiar with the paper procurement process. But Matthews’ staff adjusted quickly with hands-on training for the new system function. It started with commitment from management, Matthews says, followed by meetings and training sessions for department users. “It is natural for people to be comfortable with the way things are—and reluctant to embrace change,” Matthews says.
Why more are switching to software
According to Borger, 82 percent of organizations are currently using procurement software or are planning to invest in new or additional technology. “The days of adding staff to solve workload issues are behind us,” Borger says. “The staff members that you already have should work at the highest level of their abilities, while technology handles routine work.”
Based on the survey, procurement software investments are currently limited in most organizations, and Borger suggests that organizations make the most of what is available. “For those without procurement software and waiting for funding, you can still take action now,” she says. “Review current processes and be lean about it by removing unnecessary waiting time, redundant reviews and excessive controls.”
Borger adds that streamlining the paper processes will prepare an organization for software solutions when they become available. “Research what is available,” she says. “Learn to make your business case and be ready for the funding when it comes your way.”