Four Tips for Making your Local Government Procurement Strategies More Proactive in 2021

 In Blog, Change Management, Contract Management, Local Government, Supplier Management

If you work in local government procurement, you would be all too aware of the current and continual challenges faced by Australian councils. From rate-capping measures introduced in the 2010s and the recent formation of the Local Government Act 2020, to instability caused by drought, bushfires, and COVID-19, navigating procurement processes smoothly and compliantly this calendar year is proving far from easy. In fact, it’s becoming clear that as we edge towards the second half of the year, councils are increasingly being forced to do more with less.

This seems a little gloomy and overwhelming, doesn’t it? Luckily, it doesn’t have to be – not when you start taking a more proactive approach to procurement.

This is not to say that your current approach is roughshod or reactive, either. You probably have well-defined, compliance-heavy procurement and risk management processes that you follow to a T. But the complex set of challenges you’re dealing with which continually threaten to shake up your contracts, finances and supply chains call for a more thorough, holistic procurement approach.

This kind of approach will equip your procurement function with the tools, knowledge, and capabilities to meet ongoing challenges head-on – and accelerate positive transformation through even the most uncertain of scenarios.

Here’s four ways you can change your approach to procurement this year:

1.    Prioritise risk management at all stages of the contract lifecycle

…not only in the contract execution phase, or when you’re due to pay a supplier, or you’re faced with a natural disaster or global epidemic. Risks are present in all areas of the procurement cycle. Identifying them, analysing them, and regularly monitoring them means your team won’t be caught unaware by their presence, and will be well-equipped to treat them. Care should also be taken to strengthen your risk management processes and refine or broaden them where needed.

This doesn’t have to mean additional layers of paperwork, either. An operational contract management system has the capability to step staff through required processes, monitor key dates and trigger points, and flag risks as they approach. Rather than wading through spreadsheets to identify a multitude of risks through the contract lifecycle, your system will do this for you, and alert you to salient events ahead of time.

2.    Remember that pretty dashboards aren’t everything

Clean dashboards and colourful interfaces can certainly facilitate a user-friendly experience. But sometimes we can be blinded by the lights of big promises, and if the solution requires numerous add-ons just so your team can, for example, post a tender, manage important supplier documents centrally, or configure business-specific workflow processes to guide users through procurement activities, it will fall short at facilitating a truly comprehensive experience.

Analysing your needs, carefully sourcing a solution that will meet these needs, and facilitating implementation with successful change management are all necessary ingredients for a balanced, successful, and informed implementation.

But let’s step back and linger at the sourcing stage for a moment. Once the decision is made to implement a new system, procurement teams are faced with an overwhelming array of choice. How can you be sure that your new software will serve the needs of everyone involved – from the procurement teams using the software daily and the suppliers regularly accessing the portal, to the less-frequent users logging in to quickly send-off quotes or put together contracts?

3.    Choose your procurement software wisely

Here are two elements you should be looking for:

–         The end-to-end factor

–         A trusted reputation

The End-to-End Factor

I touched on the end-to-end factor in the previous section, but it calls for a deeper dive here.

End-to-end solutions are designed to address all (or most) of your procurement needs within one centralised system. Their cost-effective nature and ability to integrate seamlessly with supply chains and existing ERP/EDMS systems make them a huge advantage not only for council procurement teams, but for the councils themselves, their broader stakeholders, and community members.

Importantly, they provide a clear picture of the procurement cycle from sourcing and contracting, through to the delivery of goods and services and capital projects. In doing so they break down silos, are significantly cost-effective, and boost compliance, probity, and accountability within the procurement function.

Making the switch from spreadsheets or disconnected point solutions to end-to-end software isn’t a simple task, however. Successful implementation, and effective change management so the solution is used as it should be, requires the support of a deft and experienced pair of hands, and endorsement and support at the director level.

A Trusted Reputation

If your vendor is honest about what they can deliver and has a trusted reputation for delivering on their promises, council will save a lot of time, money, and effort in the long run. The solution may fulfil most of your requirements, but not every single one – and that’s perfectly fine.

If you have all the information, you can still make an informed choice. If council does its due diligence thoroughly, you will enter into the implementation process certain of which requirements are being fulfilled and which aren’t. This level of clarity will empower you to use the solution effectively.

Beware of variation requests as soon as the contract is signed. But by then, well… it is too late.

To really harness a solution’s full potential, don’t forget to step outside of your comfort zone. Open your eyes to the possibilities the solution presents beyond those you were made aware of during the implementation phase.

4.    Use your procurement software wisely (and more than you currently do!) 

Right now, you might be adapting to a new system, or considering migration to an end-to-end solution. Wherever you’re at, remember the benefits of a quality piece of procurement software don’t end at the parts you’re most comfortable with, or the features you use to complete your core role.

End-to-end solutions, after all, cover many purposes, not just one. New tools, features and enhancements are regularly added to this software, which are designed to streamline operational effectiveness and improve knowledge management across the procurement function and beyond.

Attend your vendor’s training webinars, sign up to their client newsletters, and chat to your manager about the software regularly – or, if you’re leading your procurement function, your account manager. You’ll receive all the information you need to use the software wisely. As an added bonus, direct communication with management will create an open dialogue on the enhancements you might like to see.

Occasionally, your organisation’s unique requirements are not as unique as they seem, and an enhancement you desire may also appear on another client’s wish list. By verbalising your needs, you could help your vendor detect and fill existing gaps in the software, providing mutual benefit. Some of Open Windows’ best features have eventuated after consultation with customers.

Proactive Procurement is within your reach.

Shift your approach using these four tips, and your team will be empowered to do more with less much easier, for as long as external factors demand.

I do want to note that depending on where your council is at with its procurement technologies, shifting your approach in this way may take time, and require solid backing from senior management. But the level of positive transformation that will flow outwards into your organisation as a whole, and to its community stakeholders, makes the time and extra effort worth it.

Open Windows Software is Australia’s premium end-to-end solution for local government. Read more about our SaaS cloud software here.

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