Procurement together—An interconnected future

Let me start with a couple of hypothetical questions:

Let me also ask: Is there any reason (beyond the logistics of achieving such a thing) that this information should not be freely accessible to every purchaser in the country?

Procurement efforts have started to interconnect
Back in June, my colleague Amanda Valdivieso wrote in this space on the topic of de-siloing procurement. She noted that “Shared data and insights can play a huge role in reducing cost and risk in the procurement process.”

She noted that procurement excels at interpersonal connection and the accompanying sharing of ideas via conferences and associations. But she also noted the rising interest in—and availability of—tech for interconnected procurement. Procurated Founder and CEO David Yarkin recently spoke with procurement legend Jack Pitzer on the “Decisions That Matter” podcast who also noted the importance of collaboration and connection for the next decade of procurement. But how do we get there?

For public procurement tech, the past several decades have seen massive growth in two parallel arenas. The first is cooperative purchasing. The second is eProcurement.

Cooperative purchasing—An increasing reliance on each other
Cooperative purchasing as an idea relies on the understanding that a rigorous, structured procurement process is difficult and time consuming. And that likely, somebody, somewhere has already done that intensive work for exactly the product or service you want to procure—the intake with end-users to build comprehensive specs, the research to find suppliers, the bid opening, and a formal evaluation and awarding process.

The rising use of cooperative purchasing agreements and piggybacks has enabled public purchasers—especially those who are time-strapped and under-staffed—to both figuratively and literally keep the lights on. And it has led to the significant financial success of many national and regional co-ops.

This increasing use also reflects a desire to leverage the knowledge and resources of the broader procurement community. Like everything in public procurement today, cooperative purchasing is becoming increasingly interconnected. Historically, cooperatives would expend considerable energy working with internal and external stakeholders in establishing contracts that would be effective for a wide swath of organizations. But gauging supplier performance across those thousands of using organizations was difficult or impossible to do.

That is starting to change. Cooperatives are recognizing that the value they provide can be boosted when interconnected with insight from those end-user purchasers. NASPO ValuePoint, for example announced an initiative to directly gather ratings and reviews of their contracted suppliers. By connecting the buyer experience back to their process, and leveraging those experiences as they manage their contracts, they are starting to interconnect the procurement process and improve their offerings for everyone.

eProcurement—Transforming procurements into data
Driven by the idea that manual, paper-based procurement processes are onerous, costly, and error-prone, eProcurement has grown quite a bit over the last several decades. Starting as local file and document storage, eProcurement grew with the nascent internet of the ’90s, to include templating, document creation and early file transfer.

eProcurement’s next phase, much of which is still used in the U.S. today, involved the development of procurement tools within and linked to on-premise government ERP systems. These eProcurement tools enabled bid receipt and some degree of evaluation and tracking, while integrating with other government functions like finance and asset management.

The latest wave of eProcurement software is apiece with much of today’s tech—cloud-based Software-as-a-service. These tools allow for comprehensive custom bid and RFP creation, supplier response, bid opening and evaluation, all in an entirely digital environment. Turbocharged by COVID—where purchasers needed to be able to run these operations entirely online—cloud-based eProcurement is on the rise.

eProcurement is starting to develop some measure of community connection with features like RFP template sharing, but most platforms still don’t connect procurement professionals with direct supplier insights from their colleagues.

That said, eProcurement providers are recognizing that purchasers are eager to see shared insights integrated into their platforms. Periscope and OpenGov Procurement, for example, have both started integrating supplier insights and reviews into their platforms.

What eProcurement does do—and what will be critically important in the next phase of interconnected procurement—is transform procurements into structured data.

Top-line and line-item prices, delivery times, emissions information, supply-chain details, service areas, resale values, etc. These are some of the thousands of examples of answers provided by suppliers when they bid. When entered into a cloud-based eProcurement platform, these responses become structured data.

Readers of The Economist know why that matters. They know that “the world’s most valuable resource is no longer oil, but data.” Procurement is starting to get into the game.

Procurement’s interconnected future
Cooperative procurement and eProcurement are two pieces of a jigsaw puzzle of interconnectedness for public purchasing. And while both have recognized that there is value in allowing procurement professionals to learn and benefit from each other’s experiences, neither was designed expressly for that purpose.

A new class of tool is out there that is designed explicitly to meet that need. Today, thousands of purchasers are sharing their experiences and insights about suppliers online on Procurated. They are collaborating to build a free resource where a buyer from Portland, Maine, can learn directly from the experiences of their colleagues in Portland, Ore., despite the 3,000 miles separating them.

This new tool is also creating structured data in the form of ratings. Supplier performance is being rated on a uniform scale, making it possible to aggregate the experiences of hundreds of buyers. This empowers purchasers to compare suppliers within a category, apples-to-apples.

The value of this data is recognized by counterparts in the co-op and eProcurement spaces, with supplier insights and ratings being directly integrated so that buyers can see them within the tools they use every single day.

The power of procurement together
At Procurated, we believe in what we call “Procurement Together.” What we mean by that is that more than ever before, shared procurement experiences and insights can help colleagues from around the country make the best purchasing decisions every time.

Procurement Together is a movement, a shared belief in the power of our procurement community when it is truly interconnected.

I started this article with some questions about supplier insights. Then I asked, “Is there any reason (beyond the logistics of achieving such a thing) that this information should not be freely accessible to every purchaser in the country?”

If you believe, like we do, that every purchaser should have these insights at their fingertips, then strap in. Our interconnected future is just beginning.

Steve Isaac is the director of government marketing for Procurated, helping public purchasers to leverage the power of peer insights in their procurement processes. He has spent a decade working with tech startups across the fields of procurement, spatial data science, and nonprofit fundraising and communications. Isaac lives in the Capitol Hill neighborhood of Washington, D.C., with his wife Lorna and his daughter Quinn.

Editor’s Note: This article originally appeared in the Fourth Quarter 2022 issue of Government Procurement.