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March 7, 2016

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How public procurement can focus on the customer

 

While many point to technology as a panacea to public procurement’s seemingly turgid processes there are other, simple ways to improve the internal customer experience writes Jonathan Dutton for GOVT NEWS.

 

In our home, the iPad lives by the sofa in front of the TV. Our family often flop down, grab the iPad and click away with impunity. With our Amazon account we can even order with just one click. It’s an easy, seamless and satisfying customer experience – unlike procurement, much of the time.

 

The procurement department’s internal customers or stakeholders do not have one-click ordering. Traditionally, they have forms to fill out, requisitions to fulfill, specs to write and business cases to put together – even for fairly mundane requirements as well as supply critical or plainly obvious needs.

 

Improving the internal customer experience is a key part of modern procurement thinking. Inefficient processes that waste time, frustrate colleagues, impact operations and ultimately add cost also contribute to maverick spending, low compliance, higher risk profiles and policies without traction.

 

Most procurement departments currently use major supply side IT systems – often an enterprise requirements planning system – that facilitate the requirements planning process. Other options include panel management software, procurement programs, online portals and SaaS facilities – all designed to improve user experience.

 

Delivering a customer experience

 

What has not yet happened is one-click ordering; we have not given our stressed-out, time-poor departmental colleagues a normal business-to-consumer experience (like at home) in an abnormal business-to-business environment (in a public office).

 

Many organisations are working on this exact concept in order to bring efficiency and speedy self-service to a tiresome process and to quicken up support services.

 

Some technology providers are leapfrogging beyond mere web catalogues and one-click ordering.

Oracle demonstrates chatbot software that uses voice recognition on the smartphone – like Siri or Alexa. This ordering bot can discuss your internal requirement, compare features and options, offer alternatives, check approvals, order for you, confirm delivery dates and charge your departmental cost-code within your delegated authority level. All this is done in a short conversation. It also records the conversation as text and issues you a purchase order number as a receipt.

 

Procurement automation  

 

This level of sophistication isn’t yet commonplace, certainly not yet in public sector procurement processes. But it exists and works today, which raises the spectre of automating procurement. In fact, much of the administration orientated work of procurement can be automated fairly easily now.

 

We’ll still need people to do the tasks that machines are poor at and which truly enable better outcomes – such as thinking strategically, managing risk, building relationships and making professional judgments.

 

Procurement professionals will also still be needed to address the big issues like embracing social procurement activities, tackling modern slavery in supply chains, using procurement as an instrument of policy, accelerating local economic development, building compliance rates, addressing probity questions and eradicating fraud on the supply side. All contribute to a better, broader and more fulfilling customer experience.

 

An agenda for change

 

But beyond technology, there are other, easier ways to improve the internal customer experience.

 

Here are five key ways that procurement teams around different jurisdictions could get more customer focussed for real departmental and stakeholder benefit:

  1. Adopting a more customer-centric approach: recognising that procurement is in the service game by surveying customer needs, building responsiveness into the procurement culture, and setting targets for procurement fulfilment. One large UK central government department in London sets a 120-day target to fulfil all procurement requests, and reports against the target. Agreeing expectations and measuring against them is the basis of happy customers.

  2. Agreeing clear procurement policies: surprisingly, not every procurement team has a clear, written set of procurement policies. Nor are they all published – internally, never mind externally. This is not as easy as it sounds. Some procurement policies often conflict (we’ll buy the cheapest globally, buy locally, support indigenous owned firms and tender every requirement openly). Sitting down with key users and agreeing such policies is a start. It’s easier to succeed when you have clear and prioritised objectives. Ideally those you can measure and report against.

  3. Recognising suppliers as customers: Acknowledge that suppliers are a key stakeholder in the supply process by treating them as partners, investing in the relationships (as explained in last month’s column) and harvesting their expertise to bring soft benefits to complement their hard contracted deliverables. In other words, eradicate the master/slave mindset, and watch your colleagues’ experience grow.

  4. Invest in the right process: Bill Gates once said that IT was “brilliant at amplifying mistakes.” The dash for systemisation often mimics the process that exists (because that’s how we do it here), not the process that should exist (best practice or best process). Invest in designing efficiency and effectiveness to fulfill agreed policies, map the customer journey to expose hurdles and develop them out of the process to build a seamless experience. Then invest in technology for better/faster/cheaper service.

  5. Ask for feedback: once you start surveying customers, attracting feedback and getting ‘rated’ you start to learn of true customer needs. Acting on the feedback aligns you naturally to those needs, and sets the basis for contented customers.

Do all that and you have the basis of an excellent business relationship in the making – and that’s often the basis of a good business with great customers.

 

Then, maybe, you can hand out free iPads, or even let internal customers order through an app on their own smartphones and turn the requisition process into an easy customer experience – for everyone’s benefit.

 

Jonathan Dutton is an independent management consultant specialising on procurement and was the founding CEO of CIPS in Australia from 2004-13. He writes a regular column on procurement in government for Government News.

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