A quick dive into the current state of procurement online and what we can expect.
Estrada Consulting Inc.
- E-Procurement has been on a steady year over year growth.
- Measures are being taken to further E-procurement across the United States.
- The growth presents many opportunities for contractors for more involvement.
This month GovWin and Deltek Technologies published reports on a survey they took from contractors and governments across the country to examine the procurement industry in different Variables.
Their report showcased a strong indication towards a series of different measures being taken in the industry that are developing a new landscape for contractors and governments alike.
A big part of this was the emergence of E-Procurement systems as the major way to procure new contracts across the United States.
What is E-Procurement, and why is it growing?
Traditionally, procurement was paper based, usually with procurement officers interacting with long-time partners or well-known suppliers and purchasing at fixed prices. In recent years, this has changed somewhat to become a strategic function: Procurement officers seek suppliers that fit with a company’s overall strategy. (Source)
E-procurement involves moving the procurement process online to cut out steps and save money. For example, traditional procurement involves getting quotes and then approval, probably from finance, as well as a purchase order, which could take more than a week. With e-procurement, this process is simplified and speeded up considerably, thanks to real-time interaction with pre-approved suppliers and trading partners, who can be anywhere in the world. With online purchasing, the purchase can be approved online, and the order completed within minutes; the required item often arrives within days. (Source)
What does the survey say?
The survey outlines the fact 55% of new contracts are procured through electronic means; this follows the historical trend of year over year increase of E-procurement across the United States. It’s been argued that e-Procurement allows the agency to be able to handle or scale-up for more purchases without requiring much more staff time.
How do these numbers vary across the country?
Differences by type or size of agency were often noteworthy. Agencies most likely
to use these systems included state government, those serving 500,000+ population, and those with staff working extra hours.
The data shows a strong correlation between population density and the implementation of e-procurement systems.
E-Procurement systems are on the rise with positive feedback being given from both sides of the isle. Therefore, we can expect more and more local governments entering the realm of E-procurement which presents a big opportunity for companies building these platforms to thrive.