Philadelphia, India and Nigeria – Three different geographies with distinct socio-economic and political scenarios. Wonder what brings them together? Well, as evident from the articles above, one aspect that runs as a common thread in the present context is their growing inclination towards rapid adoption of ‘e-procurement’ practices.
We at Eyvo eProcurement have noticed that while corporates across the globe have already been cashing-in-on the benefits of e-procurement, even the public sector seems to have developed an affinity towards the process. The reasons for adoption, however, may differ. For some, it is an excellent measure to streamline procurement, while others use it to check corruption and many are adopting it simply to thrive in a competitive playfield. Whatever be the motive, the core of adopting e-procurement for any private firm, large corporate or a public sector entity boils down to one underlying aspect – ‘enhancing one’s ease of doing business’.
As per the 2016 Edition of the World Bank Benchmarking Public Procurement report, which assesses public procurement systems in 77 economies across the world, “the Public Procurement Market is massive. In developing countries, governments spend an estimated $820 billion a year (about 50% of their budgets) on procuring goods and services. And in the case of high-income countries, the procurement spend is 29% of their total general government expenditure.” Really loud figures.
Now imagine going through cumbersome processes, dealing with numerous vendors, ensuring quality checks and maintaining huge flowcharts and files to record transactions worth several hundred billion dollars. All these years, millions of managers across economies and offices, especially in the public sector, have struggled day-in and day-out to maintain these records. Unfortunate, but true. Going by the numbers and efforts involved, public sector procurement makes a very strong case for electronic streamlining.
What further necessitates adoption of e-procurement is the role of purchases made by the public sector in determining development outcomes of an economy. A new research study by Harvard Kennedy School provides evidence to support claims that replacing manual procurement procedures with e-procurement, in particular, can improve outcomes for publicly-funded projects. The study focuses on a range of projects in two large emerging economies – India and Indonesia – where cost overruns and delays in infrastructure provision are commonplace. “The results present a consistent story. E-procurement appears to have led to increased ability of firms from outside the home region to win a contract,” they write.
What’s more E-procurement can not only help enhance transparency but has a definite and positive impact on good governance and facilitates efficient use of financial and human resources, thereby stimulating inclusive growth.
Though the buzz word has already hit the market, the concept of e-procurement is still in its nascent stage especially in the case of economies which are too comfortable with their current hackneyed practices. One of the biggest challenges in adoption of e-procurement is its perceived image of a high-tech monster, especially in absence of adequate organisational culture to encourage smart intervention of new technologies. In some cases, the regulatory and policy framework also inhibits swift inclusion of e-procurement processes.
However, despite the many challenges limiting rapid adoption of e-procurement in the public sector at a constant pace across the world… the early interventions are surely promising. As Socrates puts it the secret of change even in this case “is to focus all of our energy, not on fighting the old, but on building the new.”
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