The public sector marketplace is fluid; always advancing and innovating and generating key trends that have myriad benefits for government contracting authorities. It’s important to keep up with modern trends because the public sector changes quickly, leaving outdated procurement procedures far behind.
Some of the trends in procurement procedures aren’t necessarily new, but thanks to new technology and advanced software, they’ve been given a significant boost that keeps public sector buyers, suppliers, and marketers on their toes.
Our quarterly report on trends and changes in public procurement processes intends to give you the information you need to maintain a strong presence in the market and give you a head start in the New Year.
We’ve included the most important public purchasing trends for 2024 below.
Artificial intelligence (AI) In Public Procurement
Artificial intelligence has come into its own and grown into an invaluable tool that constantly saves costs, streamlines procurement processes, and improves the bottom line.
The latest trends are Generative AI (Gen AI) and Conversational AI, both of which improve efficiency along the entire public procurement cycle. The souped-up technology is better equipped to process and interpret much larger and far more complex data sets than before.
What is conversational AI?
Conversational AI in public procurement does what it says in the tin. It enables people and computers to have a conversation – spoken or text – using natural language.
All people have to do is verbalise or write a question about procurement policies or central government procurement guidelines (for example) and the AI will be right back with the relevant information.
One of the more interesting benefits of conversational AI is the ability to pick up on human emotions. AI uses the knowledge (understanding?) to tailor responses to the specific customer concerned.
This improves customer satisfaction remarkably, especially when interacting with local authorities or central government bodies.
What are the benefits of generative AI?
Generative AI fills some very specific roles in the procurement process.
It’s brilliant at processing and interpreting data and using the interpretations to deliver insightful answers to fairly complex questions, such as, “Are we overly dependent on a single supplier for X products?”
It can also summarise public contracts and lengthy documentation so that buyers and marketers don’t have to wade through pages and pages of data. They simply call up a clear and concise summary generated by AI.
Generative AI and conversational AI
One of the best (or scariest) features of both types of AI is the ability to learn. This enables the tech to know the supply chain, suppliers, public sector market, and public procurement systems intimately.
And, because learning never stops, conversational and gen AI constantly improve their processes to ensure public sector marketers are always at the top of their game.
Look for advanced automation software that takes on even more essential and sophisticated government procurement processes.
Sustainability In Public Procurement
Sustainability is big in modern public procurement. All industries in the private and public sectors are under a great deal of pressure to incorporate sustainability in their business operations.
The public sector has perhaps been under more pressure than most. It is essentially government procurement, which comes under a lot of scrutiny anyway because people want to know exactly where their tax money goes. But with climate change goals looming and greater public demand for sustainability, government departments have to be seen taking action and yielding tangible results.
Local and central government departments and other public bodies don’t have to hit these goals entirely on their own, however. Sustainability is required along the entire supply chain and public procurement cycle.
This means that suppliers and public authorities must be on the same page when it comes to sustainable public contracts. They should also collaborate on sustainability plans to increase their impact locally and even globally.
Note: Sustainability is separate from social value. While the Procurement Act ensures that public contracts include social value, which in turn includes environmental concerns, it’s primarily a public procurement thing. Sustainability, on the other hand, is embedded in company culture.
Look for new, more stringent procurement legislation and central and local government sustainability regulations.
Supplier Diversity In Public Procurement
Recent global events have highlighted the importance of a multiple-supplier strategy in global procurement procedures. Multiple, alternative suppliers are insurance against massive supply chain disruptions, which can cause long delays in public procurement procedures.
Should a cargo ship get stuck in a canal, for example, public bodies and contracting authorities needn’t panic because they have alternative suppliers that use different trade routes and can deliver the materials needed with minimum delay.
Identifying multiple suppliers is part of a risk management strategy, but given its importance, it could almost be a full-time role managing public procurement and concession contracts.
Public sector contracting authorities often have several public contracts on the go simultaneously – stationery, cleaning materials, tech equipment, etc. – so plenty of suppliers and alternative suppliers are required.
It’s necessary to go through the full research process for each supplier to ensure their supply chain integrity is beyond reproach and that public sector buyers’ values and principles align with their suppliers.
And then there’s onboarding – so, pretty much a full-time job.
Look for advanced tech that can run simulations to identify potential problems where your diverse suppliers will come in handy.
Collaboration And Relationship Building In Public Procurement
To paraphrase, no public sector contracting authority is an island.
Public procurement has taken this to heart by recognising that in the current economic climate, collaboration between public sector buyers and suppliers is more efficient (and more stable) than standing alone.
There is a growing emphasis on relationships and relationship building in public sector procurement to foster trust and establish open lines of communication. This can encourage competition, drive innovation, and create opportunities in the public procurement market.
It can also have a positive impact on the less flashy aspects of procurement, like inventory tracking.
Increasing the efficiency of inventory tracking helps streamline the procurement process which boosts cost savings and improves overall performance in the market.
Look for real-time collaboration platforms that provide contracting authorities and suppliers equal access to data and reporting.
Analytics in general is a growing trend in modern public procurement, with the global procurement market expected to hit $32.3 billion (£25.36 billion) by 2031. However, there’s a little extra focus on predictive analytics, which gives you a glimpse into the future of the public sector market.
Looking into the future has never been more important as greater emphasis is put on proactive strategies rather than putting out fires reactively.
So, how can predictive analytics help the public sector?
Predictive analytics uses current and historical data to assess the likelihood of future events, behaviours, and outcomes in public and private sector procurement.
In government procurement, predictive analytics can be particularly beneficial when it comes to:
- Identifying suppliers likely to default on payments
- Informed sales forecasting
The biggest advantage of predictive analytics in government procurement is the way it uses data from a variety of sources (IoT and video) to provide accurate, real-time insights that lead to informed and strategic decision-making to enhance procurement procedures overall.
The impact this can have on the efficiency of procurement processes and profit can be astounding.
Look for AI-driven predictive analytics that takes procurement data accuracy to the next level.
The COVID pandemic changed the standard workplace into something else entirely. Many employees had to work from home – and they liked it. This resulted in some rather disgruntled employees when the lockdown ended and they had to go back to the office. They were so disgruntled, in fact, that according to Gartner, many would rather leave their jobs than go back to the office full-time.
The workplace had to adapt and a hybrid-flexible arrangement was born.
However, while it may work like a charm in most industries, it’s a little trickier in the public sector.
The reason is simple, public sector operations often contain sensitive information that can have dire consequences if leaked to the general public.
Public procurement buyers and suppliers have had to think carefully about how to structure hybrid flexibility options while maintaining high levels of data security.
Solutions to the challenge include crystal-clear rules and regulations governing remote work, such as when, where, and how. They also include advanced cybersecurity and data protection systems that ensure information is safe even if it’s accessed from mobile phones in the Tundra where network coverage is sketchy.
Authority to access procurement data is strictly controlled and authentication systems ensure data stays in the right hands.
The setup enables most public sector employees, including key personnel and stakeholders to work remotely but with the same access to systems and information as if they were in the office.
Look for advanced authentication systems that function reliably on all devices, networks, and locations.
Training For Procurement Professionals
The last trend in public procurement applies to all the other trends mentioned above (and more besides). It has to do with training – training for all the new systems, set-ups, methods, strategies, and tech that apply to the entire procurement cycle, including every aspect of the supply chain.
As is evident, procurement, especially public sector procurement, is becoming increasingly specialised. It’s not necessarily easy for current procurement professionals to adapt – and adapt quickly – to the rapid changes reshaping the procurement environment.
The solution is to provide ongoing training and education for all those in modern procurement, from the reps who have been with the organisation for 15 years to the young, new hires in the tech department.
There are plenty of online courses available for the different roles in public sector procurement but choose wisely because not all courses provide the value advertised.
Investing in upskilling programmes is also a good idea to keep procurement professionals up to date with the latest procurement legislation, procedures, techniques, and trends for public sector organisations.
Look for training courses with a holistic curriculum that can include everything from relationship building to analytics, with tech skills thrown in.
Keeping up to date with public procurement trends can be overwhelming, especially as the market can change in a virtual blink of an eye. It’s tricky enough for large enterprises with decades of experience in the public sector, let alone SMEs just getting their feet wet.
Cadence Marketing can take the pressure off by providing niche marketing strategies that are always up-to-date and on-trend. Get in touch and book a free consultation with one of our marketing specialists who will show you how modern procurement trends can be adapted to boost your business’s impact in the public sector.