The procurement strategies of the past are no longer enough to meet the demands of the ever-evolving technology-enabled world we live in.
It's estimated an average of only 22% of digital transformation efforts achieve the desired outcomes—something many government CIOs have experienced. While there are a number of factors that add to these failures—poor implementation, inadequate technology, or the wrong partner—it often starts at the procurement process with poorly devised RFPs.
The problem is, most RFPs are not written for today's digital, cloud-based world and fail to account for the customer experience. When this happens it sets the organization and vendor up for failure.
Now, with the modernization of government services and technology at a higher priority than it’s ever been before, organizations embarking on digital transformation efforts should also examine how modern their procurement process is. This will prove mission critical to keeping pace with the rapid advancement of technology and aligning with the right partner. And it can also mean the difference between implementing a solution that quickly becomes outdated or obsolete versus something that is sustainable and evolves with needs and demands over the long haul.
Digitization Is Under the Microscope
At the federal and state level, leaders are challenging government agencies to modernize and to provide 21st-century services to better meet the needs of today’s population. This has only become more urgent because of the pandemic and the need to accommodate remote work as well as the virtual delivery of services.
Of course, doing so will require the modernization of information technology infrastructures and the need to engage with IT vendors who can advise and execute on the right solution. But the procurement strategies of the past are no longer enough to meet the demands of a fast-paced, ever-evolving technology-enabled world we live in.
Procurement leaders have to create a more responsive buying process and modernize the acquisition culture. Some agencies have already adopted new procurement processes that are enabling them to better understand the vendor marketplace, attract new potential partners rather than continually resorting to the same vendors, and even encourage existing partners to challenge the “this is the way things have always been done” mentality.
Challenging the RFP Status Quo
To encourage more agencies to follow in these footsteps, the Office of Federal Procurement Policy launched a campaign in 2019 highlighting how some acquisition managers have challenged entrenched procurement processes and risk-averse cultures to attract and evaluate potential IT partners. The following are some steps agencies are successfully implementing:
- Shifting IT procurement to an organizationwide effort. Understanding technical requirements is only part of the equation. Feedback is also needed on pricing structure, performance metrics, evaluation criteria, etc. to improve the selection and implementation process. Procurement should be the responsibility of the entire team including contracting staff, leadership, those on the frontlines and other integrated project teams. Don’t just relegate this to internal IT teams or project managers. These teams should be engaged from the onset, starting at the needs assessment phase. Getting input and perspectives from multiple stakeholders will help in identifying and prioritizing needs.
- Adopting micropurchasing and smaller acquisition increments. Rather than undergo a major overhaul at once, incremental tech adoption enables agencies to reduce risk, speed source selection and implementation, focus on priorities, work through issues on a smaller scale, and prove return on investment before overspending.
- Involving potential partners early on in the process. Some agencies are finding success involving potential partners in the needs assessment phase. As long as sensitive procurement-specific information isn’t disclosed and it doesn’t compete with the procurement process, it can prove a valuable exercise to engage with industry partners to uncover the root of the issue and support in developing more meaningful evaluation criteria.
- Using product demonstrations to assess fit. Agencies have tended to avoid demos as they’ve traditionally proven too complex and provided little value for acquisition personnel. But when other members of the team are involved, demos can help agencies test vendor and solution capabilities (in some cases with their end users) and evaluate whether it meets the need to streamline the procurement process.
- Expanding vendor options. Rather than limiting the RFP process to past vendors, agencies are opening the procurement process to new vendors, including smaller businesses, to bring in fresh, innovative ideas and solutions, increase competition, and provide new opportunities.
Eliminating Waste and Redundancy
A primary reason IT procurement efforts often come up short is because organizations map their requirements to existing workflows and processes—the “as-is” state—that have already proven inefficient. Potential vendors then base their proposed solutions on this current-state scenario. Requirements outlined in the RFP should be mapped to the desired state. To do that, it requires first understanding the underlying inefficiencies or issues prompting the digitization in the first place.
Documenting existing workflows and processes—with the entire team involved—will provide a visual for analyzing otherwise abstract workflows to determine where there are inefficiencies, redundancies or unnecessary steps that can be eliminated. This not only sets the agency up to focus digitization priorities, but also put together a more concise RFP and more dialed-in evaluation criteria. And this can lead to better outcomes.
These were the steps one construction licensing agency in Arizona took after a couple of failed partnerships and attempts at digitization. The agency was already using cloud-based software to help manage its 40,000 active licenses and 7,000 complaint investigations annually. They were keeping pace, but they knew they could be getting more out of their system.
As they prepared to go through the procurement process again to find the right IT partner, they decided to approach it differently. Applying the process improvement principles of Lean Six Sigma, they focused on eliminating waste, defects and reducing variation first. This required the team to collect data and feedback to better understand the current system and processes, the needs and requirements, the cause and effect relationship between processes and outcomes, and the stakeholder point of view. Getting input from front line workers and more importantly, the customer, gives you a way to identify where to focus your digitization efforts.
This proved to be a lot of work upfront, but it provided the team with a detailed view of every step required in their core workflows. With this map, they were able to identify what was needed—and no longer needed—to achieve their desired or “to-be” state.
Rather than follow what’s been done in the past by putting out requests based on traditional procurement policies—many of which were created for a paper-based, in-person world—agencies will have to challenge the status quo. It will be the only way to realize new opportunities and keep up with the accelerated pace of technological change.
Brian Kirby is the director of strategic licensing solutions at MST Solutions.