8 keys to digitalising public procurement | NTT DATA

Fri, 25 March 2022

How to approach a successful digitalisation of public procurement

The holistic approach to public procurement’s transformation towards the adoption of electronic public procurement covers many different areas, such as legal transformation, organisational changes, processes reengineering, technological innovation, and interoperability, etc.

Therefore, digitalisation of procurement does not mean just translating paper processes into electronic procedures but seeking innovation in the way procurement is conducted to achieve greater benefits. Furthermore, the introduction of innovative technologies such as Artificial Intelligence or Advanced Analytics can lead to a complete reshaping of the public procurement practice.

Public procurement is one of the largest expenditure areas of governments around the world. Every year, public authorities spend around 14% of their GDP (around €2 trillion per year) on the purchase of services, works and supplies. Therefore, it is crucial that public administrations conduct procurement while bearing into account the most cost-efficient use of public resources.

The highest quality goods and services must be ensured, facilitating accessibility to procurement opportunities by all interested suppliers (specially SMEs), while being responsible with taxpayer money.

The 8 key principles to digitising public procurement

NTT DATA's approach to electronic public procurement involves a complete transformation of the procurement procedures. Our main recommendation is to adopt full electronic procurement to cover the complete procurement processes, from demand planning to contract execution and control by default.

Our outlook also involves a transformation from document-based procurement to data-based procedures. The electronically-generated data throughout the procurement process replaces the need for documents (either physical or electronic). Taking advantage of the technological evolution, we believe that systems can play a more intense role in generating, sharing, and consuming data, which reduces the need for having actual documentation.

Successful digital transformation in public procurement is based on eight key principles:

1. Defining efficient and optimised digital procedures

The first principle of a successful digital procurement relies on defining efficient and optimised digital procedures that avoid vices imported from the paper-based procurement. The workflow management of public procurement processes will be made easier by assisting users throughout the process, automating all potential tasks, avoiding the production of non-necessary documentation, reducing the administrative burden, and decreasing clerical mistakes during the process. A main principle to bear in mind is to avoid introducing duplicated information, which is counter-efficient and increases the probability of making mistakes.

2. Implementing user-friendly and user-centred e-procurement systems

The second key to achieving optimal digital public procurement involves Implementing user-friendly electronic procurement systems with a user-centred approach. Contracting authorities, economic operators and any other system users will be placed at the centre of the system design. IT tools must facilitate user working procedures to be effective for organisations.

3. Automating procedures through RPA and AI

Automating procedures through the introduction of proven technologies in other sectors, such as Robotic Process Automation (RPA) and Artificial Intelligence and avoiding human intervention in certain tasks in another key. The implementation of blockchain with smart contracts can also facilitate the automation of certain tasks. Some procedures do not require human intervention to be executed or performed, as the electronic procurement system already has the necessary data to execute the task.

4. Generating standardised public procurement data

Generating standardised public procurement data compatible with the most common available standards is the next step. Public procurement processes produce enormous amounts of information for a more profound analysis and monitoring of the procurement function, by both civil society and public administrations. It also fosters transparency of public spending information and data-driven accounting of public expenditures.

5. Adopting an evidence-based approach

Another key to digitising public procurement is to adopt an evidence-based approach by implementing techniques to make use of the vast volumes of information available. This method will allow for better planning of procurement needs, with more comprehensive knowledge of the market and its players and facilitating public procurement auditing and monitoring. Today it is possible to adopt this perspective thanks to advanced data analytics, forecasting and big data techniques.

6. Integrating eProcurement systems with other digital solutions

Enabling communication and data exchange between systems facilitates the automation of tasks and procedures, preventing the duplication of tasks and reducing the need for administrative and low added-value tasks. It is essential for public administrations to adopt data standards that allow seamless communication and information exchange between different organisations, even with different public procurement regulatory frameworks and languages.

7. Recycling available solutions

Re-using solutions that are already at the disposal of public administrations to guarantee a considerable reduction in time-to-market for new solutions and avoiding the duplication of efforts in developing IT solutions with the same purpose. This allows using already tested and successfully implemented solutions used in other processes and for other purposes.

8. Facilitating cross-border participation in public procurement

Enabling mechanisms that facilitate cross-border participation in public procurement contributes to a successful digitalization of the latter. Public procurement is a fundamental pillar of the European Single Market, and both public authorities and suppliers will benefit from greater mobility.

NTT DATA has successfully assisted clients not only in implementing modern eProcurement systems, but also in conducting public procurement reforms. We have recently worked with clients at diverse levels of the public administration, including the European Commission, the United Nations, the European Bank for Reconstruction and Development, the European Patent Office, and several national and regional administrations.