Network-powered procurement: The future of public sector procurement

Public procurement teams have always had to find creative ways to achieve more with limited resources. As governments and public institutions face increasing demands alongside shrinking budgets, the way they approach procurement is evolving.

Today, two key trends are reshaping this landscape: 1) More governments are embracing technology solutions like never before; and 2) Despite these advancements, external challenges continue to outpace improvements in internal efficiency. Euna Solutions’ newly-released 2024 State of Public Procurement report dives into these issues and makes the case for why “network-powered procurement” is emerging as the future of public sector procurement.

A critical gap between project demand and workforce capacity
The 2024 State of Public Procurement report reveals a troubling trend: project demands have surged by 19%, while staffing has only increased by 1.8%. This growing gap between what needs to be accomplished and the resources available to do so has intensified the strain on procurement teams. The report underscores that this trend is unsustainable and that, without innovative solutions, public procurement will struggle to meet the demands placed upon it.

The rise of network-powered procurement
Network-powered procurement offers a solution to bridge the gap between increasing demands and limited capacity. But what exactly is network-powered procurement? At its core, it involves leveraging a vast network of resources—peer insights, larger supplier networks, and collaborative tools—to enhance procurement efficiency and innovation. Instead of operating in silos, procurement teams connect with others in the industry to share best practices, resources and supplier relationships to achieve better outcomes.

Mitigating risks and enhancing outcomes
One of the key benefits of network-powered procurement, as highlighted in the report, is its ability to reduce risks. Procurement professionals face numerous challenges, including rising costs, supply chain disruptions, and workforce shortages. By tapping into a network of peers and suppliers, procurement teams can access a wealth of knowledge and resources that help them navigate these challenges more effectively.

For instance, survey respondents in the report cited financial uncertainty and higher costs as top concerns. Through network-powered procurement, teams can pool their buying power, negotiate better terms, and find alternative suppliers when traditional supply chains falter. This collective approach not only reduces costs but also enhances the resilience of the procurement process.

Building stronger supplier relationships
Another advantage of network-powered procurement is the ability to build stronger supplier relationships. The report points out that cooperative contracts—agreements that allow multiple organizations to purchase goods and services under a single contract—can lower purchasing costs by up to 7.5%. Additionally, these contracts can reduce transportation costs by up to 55%, offering significant savings for public sector organizations.

But the benefits go beyond cost savings. Network-powered procurement enables procurement teams to diversify their supplier base, increase supplier diversity, and strengthen relationships with key suppliers. By working closely with a broader network of suppliers, procurement teams can ensure a more reliable and resilient supply chain, which is critical in today’s uncertain economic environment.

Driving innovation through collaboration
Innovation is a key strength of network-powered procurement. The report highlights a rising enthusiasm for challenge-based procurement—where organizations outline specific problems and invite suppliers to present creative solutions—and outcome-based contracting, which emphasizes achieving results over following predefined processes. These fresh approaches are gaining momentum as procurement teams aim to drive greater creativity and accountability in their work.

By collaborating with peers and suppliers, procurement teams can experiment with new ideas and approaches, learning from the successes and failures of others. This collaborative environment fosters a culture of continuous improvement, where procurement teams are not just managing contracts but actively seeking ways to enhance the value they deliver to their organizations.

Full-cycle solutions: The foundation of network-powered procurement
Euna Solutions’ report emphasizes that the heart of network-powered procurement is built on comprehensive, full-cycle procurement solutions. These solutions provide access to a vast network of suppliers, cooperative contracts and peer resources that empower procurement teams to operate more efficiently and effectively.

Full-cycle procurement solutions streamline the procurement process, from sourcing to contract management to shopping to invoicing. By integrating these processes into a single platform, procurement teams can access real-time data, collaborate with peers and leverage a network of suppliers—all of which contribute to better decision-making and improved outcomes.

The future is network-powered procurement
The 2024 State of Public Procurement report delivers a clear message: network-powered procurement isn’t just a forward-thinking approach; it’s a must-have for today’s public procurement teams. With rising demands, limited workforce capacity and economic uncertainties, the ability to tap into a network of resources can be a game-changer.

At Euna Solutions, we believe that the best way to move public procurement forward is by bringing governments together. Each individual agency is facing its own challenges, but through sharing and collaboration, network-powered procurement can provide solutions that no single government could achieve on its own.

As public sector procurement evolves, those who embrace network-powered procurement will be better equipped to face the challenges of the future. By building strong connections, encouraging collaboration, and driving innovation, procurement teams can deliver even greater value to their organizations and, most importantly, to the communities they serve.