The United States is a vast, diverse country – A mix of coastal metropolis, sprawling suburb, and vast stretches of rural landscape dotted with towns and cities. This regional diversity and the country’s varied demographics can make it a challenge to conceptualize a slow but significant transformation, like the one taking place in procurement and purchasing divisions from coast to coast.
The traditional paper procurement process, with its inherently high costs in time and material (especially to suppliers) is, in some place, being supplanted. For some municipalities, that means a hybrid process with online bid postings and a mix of paper and emailed proposals. For others, it means a move to a 100% digital model for the entire procurement process – from requisitions to creating solicitations, through awarding and contracting.
The Case for Florida
When comparing the demographic makeup of individual states to that of the nation as a whole, Florida consistently ranks in the very top. And while rankings such as this are mostly used for investigations into electoral politics, they help us know where we can find a meaningful slice of data for examining national trends.
Florida is intensely non-uniform. Urban, suburban, rural – Florida has it all. And as we examine the digital transformation happening in Florida procurement, we gain some insight into the where and why this transformation is occurring across the US.
Florida Procurement’s Digital Transformation
Florida is home to 67 counties. They range in population from just over 8,000 in the panhandle’s Liberty County, to over two and a half million people living in Miami-Dade. Naturally, the needs of procurement divisions across this broad spectrum is different. The Strategic Procurement Division of Miami-Dade county, for example, boasts a staff of nearly 80 people. Counties like Liberty on the other hand often have a procurement division of one County Clerk, for whom procurement is only a small piece of their day-to-day responsibility.
Naturally, a digital transformation looks different across this spectrum, and the rate at which these counties are undergoing these transformations is also different.
Drilling into the county level data, we see that just over a fifth of Florida counties have moved to a full eProcurement system:
But when we zoom in on only the top 20 Florida counties by population, the ratio shifts dramatically:
At first blush, there is logical sense to this. A larger population implies key factors, including:
- More frequent and highly varied purchasing needs
- More complex procurement logistics
- A larger tax-base, yielding deeper budgets, and a greater capacity for investment in new technologies
For an eProcurement solutions provider like Negometrix, it is exciting to see this transformation. A county like Orange County, Florida (5th in population in the state), which has posted 74 Solicitations via the platform, can derive significant value from the elimination of paper bidding, increased supplier access, and the ability for procurement staff to collaborate remotely in an online environment.
Roadblocks to Digital Transformation
It is wonderful to see more and more large counties and municipalities moving towards eProcurement. In addition to the cost savings, this switch democratizes access for suppliers and makes procurement more environmentally friendly.
But it does sometimes seem like small and medium size areas are a bit slower to transform. This may come from a perception that the cost savings – so obvious for larger agencies – aren’t present for smaller ones. But this simply isn’t true.
Higher Cost to Suppliers without Full eProcurement.
For one, a vast majority of Florida counties who aren’t using a full eProcurement solution are partially digital, in that they use various services to post their bids and solicitations online. This seems like a positive, until you realize that a number of these services are passing along costs to suppliers and vendors, forcing them to pay to access opportunities.
Charging suppliers creates a barrier to entry, reducing supplier participation. And with fewer bids, procurement divisions may be missing out on cost savings on the other end of the process, never seeing lower cost options. A full eProcurement solution like Negometrix will not pass costs on to your suppliers or vendors.
Savings on Material
Just because your municipality doesn’t run hundreds of solicitations a year doesn’t mean you aren’t spending money on materials. An 100% digital eProcurement solution allows you to eliminate paper. No more printing multiple copies of dozens of proposals for your evaluation committees.
eProcurement allows all of your evaluators to access proposals digitally, and to make notes, ask questions, and score bids – all online. eProcurement will save even the smallest procurement departments on materials like paper, ink, and their growing array of filing cabinets.
eProcurement is More Than Cost Savings
The digitization of procurement functions has been happening, slowly-but-surely, for years. The current pandemic and subsequent social distancing requirements are only speeding up the transformation.
We don’t know exactly what a post-COVID environment looks like. But across industries, signs are pointing to a greater focus on the ability to work and collaborate remotely. eProcurement brings that benefit to procurement divisions of all size.
The digital transformation of Florida continues, just as it does in counties, cities, and towns across the country.
And eProcurement Transformation is Exponential
What we mean by that is that larger procurement agencies around the country are going digital. This has a trickle-down effect. Suppliers see instant benefits from the platform in cost savings, access, and ease of submission. Those suppliers, now in an eProcurement ecosystem can even more easily respond to solicitations from other municipalities on the platform. The more municipalities and suppliers that eProcurement, the greater the benefit to the broader buyer-supplier ecosystem.
It is our aim to facilitate the natural growth of this ecosystem – to provide cost-effective options for agencies of every size. And by doing so we hope to create a lower cost, higher efficiency and more sustainable procurement ecosystem in Florida, and across the whole country. Little-by-little, we are excited to be seeing this growth taking place everywhere we look.