People in public procurement are experiencing a rapidly evolving field, with new iterations and evolutions every day. Procurement experts can work for more than 130,000 public agencies in the US, spending trillions of dollars each year.
As you know, public procurement is not always a simple process. Inefficiencies still abound: experts estimate 10% to 30% of government expenditure on public procurement is lost due to mismanagement and unintentional disorganization. These numbers will only increase over time as more obstacles pepper the field of public procurement.
Procurement leaders need modern strategies to expedite the procurement process, sourcing the vehicles that they need quickly to serve teams within their public agencies. Let’s explore the ins and outs of procurement inefficiencies and possible improvements.
Common inefficiencies for public procurement
Public procurement buyers have always faced a challenging process, and recent trends and economic downturns have only served to complicate it further.
Three of the most common procurement inefficiencies are:
- Rising costs: The United States is experiencing an 8.2% annual inflation rate, which is one of the highest in the country's history. Higher prices make it more difficult to balance budgets and may become exorbitant for smaller, locally funded organizations.
- Human errors: A single missed comma or extra decimal could dramatically affect your procurement outcomes, now to the tune of $3.1 trillion per year. In fact, nearly one in four (24%) of leaders say that manual or incomplete data entry is a major barrier to their business's success.
- Disrupted supply chain: Holistic supply chains and JIT deliveries are now the exception rather than the norm. Today, 77% of leaders are concerned about their ability to handle supply chain disruptions on all fronts.
Turning a blind eye to procurement inefficiency is simply not worth the risk, especially when it comes to public funds. Fortunately, public procurement experts can take certain steps to reduce or eliminate these roadblocks.
A comprehensive list of procurement efficiencies
Even if people in your organization aren't feeling the impact of procurement inefficiencies, your public-facing audience certainly is. Therefore, you must invest in productivity-boosting tools that future-proof the efficiency of your current workflows.
There are three major elements of an efficient procurement process: transparency, automation, and cooperative contracts. Let's look at these in greater detail.
Improved procurement transparency
Experts often navigate the procurement process with limited visibility. In fact, many officials struggle to know where their money is going and why.
Today, 26% of procurement leaders say that improved transparency in procurement could generate cost savings. This could pose a risk to organizational efficiency and steal valuable resources from your company.
You can solve decreased transparency in several ways:
- Purchasing enterprise software solutions
- Upgrading your internal spreadsheets
- Regularly reporting financial metrics
You may also want to work with a sustainability professional for additional guidance.
Automated data processing
Workers using manual data reports uncover many problems. Not only do they prevent employees from completing projects faster, but they can also be more expensive than automated processes alone.
Rescue bad data with software solutions. Some platforms can reduce order requisition by 75% and invoice processing costs by 90%, saving time and money for your organization.
If you're still relying on Excel sheets or manual documentation, now is a great time to migrate over to automated data processing.
Competitively solicited contracts
Although the two previous factors are critical to success, you can't maximize the efficiency of either one without the help of cooperative contracts.
Cooperative contracts are competitively solicited contracts between a lead public agency and a private company. Other public buyers can use the same contracts to capture lower costs, better equipment, and faster contract decisions.
More than 48% of procurement leaders are already looking for new suppliers to lower yearly costs. That's nearly one in two procurement officials nationwide. If you find yourself in a similar battle to cut costs and save time, your best bet is partnering with the pros at Sourcewell.
Understanding the role of cooperative contracts
Sourcewell helps organizations all over the US source valuable contracts in less time. Its cooperative contracts are curated on behalf of one or more public agencies in need of more efficient procurement.
Here's how it works:
With Sourcewell, all you need to do is register, find a contract, and connect with a supplier—it’s that simple!
Here at Sourcewell, we help public agency buyers procure fleet vehicles faster by fulfilling the time-consuming bid process for them. Through cooperative contracts, we expedite the fleet vehicle procurement process so you can better serve your teams.
Want a faster procurement process? Contact one of our specialists today to buy the fleet solutions you need!
