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Pinching pennies through a streamlined procurement process
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As state and local government budgets across the country
further tighten their already tight belts, there exists a growing need
to look at how government operates on a line-item level.
Now, more than ever, it is important that public sector institutions
look at how they buy the everyday items that make up the nuts and bolts
of their operation. Or so says Bill Schaefer, vice president at IBM
Procurement Services.
“Strategic sourcing of indirect spend [software, office supplies,
official travel] is quite large for the average firm or public sector
institution,” Mr. Schaefer said in an interview with CivSource last week. “Around 10 to 20 percent.”
Last week, IBM announced an expansion of their procurement services,
including strategic sourcing services and new procure-to-pay services.
Although the announcement was primarily directed toward prospective
customers in the private sector, Mr. Schaefer said IBM’s offerings are
“very relevant to the public sector.”
“IBM has been in the business of managed business process services
and procurement for over ten years,” Mr. Schaefer said. “We’ve grown to
the point where we do about $48 billion in manage spend around the
world. And we can drive tremendous savings for the customer.” And due
to the unprecedented financial troubles facing just about every state
in the Union, Mr. Schaefer said IBM’s, “public sector prospects are
looking harder at this than in the past.”
Through
their strategic sourcing services, customers have access to
spend-category experts who can analyze their spend, develop new
sourcing strategies and negotiate improved contracts with suppliers. Or
for institutions that rely on localized resources to perform
back-office operations, they can use IBM’s global shared services
capabilities for procurement and payables.
Mr. Schaefer says IBM “provides either component services or
end-to-end solutions because everyone is trying to do more with less.”
But for Mr. Schaefer, the magic sauce is with the employees and for
their bottom line.
“e-procurement is important,” Mr. Schaefer said, “But we provide
services and technology – I’ve known companies or institutions who
think that if they buy the system everybody will be happy, but in
reality you need the right people, the right expertise and the right
processes. Last, but not least, is the right software.”
The real innovation, Mr. Schaefer says, is that individual firms or
agencies can only optimize their procurement process to a point.
“A big problem [for the public sector] is expertise,” he said. To
understand the level of expertise Mr. Schaefer is talking about, take
managing travel, for instance. “To make sure you were getting the most
out of your travel budget, you’d need someone who came out of the
airline or hotel industry to understand the what’s happening. That’s
where IBM comes in.”
There are some slightly different priorities [between the public and
private sector] and a lot of challenges with how to deliver the highest
quality service and drive end-user satisfaction, according to Mr.
Schaefer. In the public sector, there are competing and different
constituencies with stringent procurement policies that cost a lot of
money.
“At IBM, we really focus on the procurement process to make sure the
employees are satisfied. If you just through tech at it, people aren’t
satisfied – at IBM, we fit the pieces together to bring the most value
for the customer.”
To view the original article, click here. Or, go to CivSource to read more on how state and local leaders are leveraging technology.
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