What Are Public Sector Procurement’s Top Priorities in 2021?

Bonfire, an organisation providing strategic sourcing and procurement software, surveyed 32,000 public sector procurement professionals between December 2020 and January 2021.

The research sought to gain insights into how public sector professionals have reacted to the pandemic and their plans for future-proofing the business against future disruptions. While Bonfire’s research is based on the U.S. public sector, all five priorities are applicable to Australian public procurement professionals.

What are procurement’s top priorities in 2021?

Major supply chain disruptions triggered by the COVID-19 pandemic have compelled procurement professionals to rethink their priorities.

Bonfire’s report uncovered five areas where the majority of public sector procurement professionals are focussing their attention.

1. Finding new ways to cut costs and reduce budget

Almost 28% of Bonfire’s survey respondents said cost-cutting was their number one priority in 2021, with more than 50% of professionals saying they plan to drive savings via cooperative contracts.

Cooperative purchasing enables public sector procurement professionals to leverage contracts that have been pre-negotiated by a public agency (a cooperative) and a vendor. Not only do cooperatives save buyers a good deal of time and money, but it’s much easy to compare vendors or identify minority-owned or local suppliers

2. Increasing the efficiency of existing procurement processes

Almost 27% of public sector professionals will prioritize making their procurement processes more efficient.

As organisations’ entire business operations shifted to a remote model in 2020, procurement’s key stakeholders quickly grew accustomed to speedier bidding processes. As a result, many public sector professionals have reported that stakeholders expect much faster results from procurement teams than they did before the outbreak of COVID-19.

3. Re-evaluating digital transformation efforts

Around 20% of survey respondents said their organisation will prioritize digitization in 2021. In a post-pandemic world, digitisation will be all the more crucial as procurement teams strive for operational efficiency, cost reduction, and more refined risk mitigation strategies.

Technologies including AI, blockchain, Robotic Process Automation (RPA), and IOT will help procurement to:

• Manage and categorise global spend in real-time.
• Achieve greater visibility throughout the supply chain.
• Manage inventory and predict demand.
• Identify top suppliers and consolidate their existing supply base.
• Automate contract management.
• Curb maverick spending.
• Gain actionable insights from data analysis.

4. Developing infrastructure for telecommuting

Almost 15% of those surveyed said their top concern was developing better infrastructure for telecommuting.

If remote work is here to stay, can procurement professionals continue to nurture long-term and meaningful relationships with their preferred suppliers and key stakeholders, and conduct successful negotiations?

Procurement leaders must evaluate their existing telecommunication tools and establish if these will stand the test of time.

5. Diversifying the supplier pool

Border closures, national lockdowns, transportation delays, stockouts, employee sickness, businesses collapsing, and changing customer demands led to major supply chain disruption across the globe. For this reason, diversifying the supplier pool is the top priority for 7% of public procurement professionals in 2020.

For starters, procurement teams will need to implement more robust contingency strategies to ensure they are never dependent on single-source suppliers. Other strategies include on-shoring or near-shoring production, establishing a preferred supplier program to drive supplier loyalty, and investing in procurement technology that can streamline the process of finding, selecting, and onboarding new vendors.

The Bonfire report explores procurement priorities for local U.S. governments in 2021, while also highlighting key actions taken during the year of the pandemic. Insights from these survey results will empower public procurement professionals to plan accordingly.

Download the report in full here.