Digital: Post 1 - An Introduction to Procuring Digital

Apr 15

An Introduction to Procuring Digital Services

Procurement can be bureaucratic, slow and painful.

Some procurement users, both internal staff and bidding companies, will try and navigate around the many processes and procedures often reverting to a position of hacking to deliver what they need.

Whilst these hacks might work for a specific purpose, they are not sustainable. We think procurement itself needs to transform. Procurement of digital services is no different. In fact the case for doing procurement of digital differently is even more compelling than it is for other goods and services.

That is why we have created a Procurement of Digital Services practice.

Why is buying digital different?

The pace of digital innovation is exceptional. Consumers, both in their professional and personal lives, are experiencing new ways of working and consuming services remotely, either at home or on the move. Real time data and easy to access information is expected and many people lead their lives using these.

Traditional procurement processes, for example those that include long gaps between procurement stages, often mean it is hard to react quickly. Building user-centred digital services requires agility and often releasing the minimum viable product.

Therefore buying digital services requires some key ingredients, such as:

collaboration
incremental and iterative delivery
innovation
openness
transparency
user centred design

The cheapest - it’ll do

The cheapest price can work for highly commoditised products, such as office supplies, utilities, vehicles. But this emerging digital category needs to consider more. Much more.

Developing, releasing and iterating services requires a multi-vendor approach, one that allows suppliers to be part of the multidisciplinary team delivering the service.

Don't just drop in - we need you to stay

This requires a different type of culture. A new way of working with people and in teams. It is important to have the correct contract in place but it is more important to have the right people. To do this, procurement people need to be invited to the table early on. Procurement people need to be there before the guests arrive and to stay on to wash the dishes long after the party has finished and the stragglers have left.

Procuring is a fundamental business discipline. Enabling procurement to be part of the wider business eco-system will help prioritise delivery, lower the risks, deliver real user value, and save money.

Know what you are buying

Creating a digital category creates more focus for both the buying organisation and the supplying market. Knowing what you are buying, how to contract for it and what price to pay will make procurement interactions simpler and quicker for digital colleagues and could perhaps see a shift to a self-serve model where procurement people aren’t needed to procure services.

Focusing on this area allows better conversations with the current supplying market as well as industry innovators who might become suppliers in the future. It is important to lower barriers and make commercial interactions easy for them so the best possible service can be delivered to the end user in the shortest possible time.

Contract data

Enticing new suppliers is part of procurement's role. The simplest way to do this is by being transparent with contract data (such as outlining the services being bought, contract periods, contracted supplier, etc) whilst protecting commercially sensitive information.

Just make sure the data is useful and easy to absorb.

This also ensures users know more about the service they are consuming. Opening up tender opportunities to the largest possible amount of bidders ensures the best service will be procured.

Digital procurement community

Procuring digital services is new to most people. Procurement people always worry about how to procure things in a way that complies with procurement regulations. For them procuring services with digital people who adopt agile delivery methods can be very challenging. Whilst digital people worry about the speed and quality of things.

Talking, sharing ideas and trying new things (that might not ultimately work) is the best way to find the balance and co-deliver. Creating your own digital procurement community of practice allows for a safe place for people to do this.