Procurement reform in the UK, via the new Procurement Act 2023, is shaking up public sector procurement. While there are many changes, the most significant are simplifying and streamlining procurement processes.
We have Brexit to thank for this simplification because it enabled the UK government to repeal “over 350 individual regulations derived from EU Directives,“ dumping hundreds of confusing procedures and helping SMEs and newbies to compete with confidence on a level playing field.
Buyers and suppliers have until the 25th of February 2025 to prepare themselves for the official launch of the Act. The government has made several resources available to help stakeholders understand and adapt to the changes, but there is also one underestimated procurement tool that can ensure a smooth transition: eSourcing platforms.
We’re going to explore the role that eSourcing plays in procurement reform and how it can benefit suppliers and buyers as they try to optimise the new processes to suit business needs.
eSourcing’s Role In Simplifying the Public Procurement Process
First, let’s look at what eSourcing is, exactly.
eSourcing uses online software to identify the most suitable suppliers, evaluate potential suppliers through a bidding process, select the bids that provide the best overall value, create contracts, and award contracts to suppliers whose pricing and services create a package that exceeds expectations.
eSourcing platforms provide a central hub where buyers can publish contract notices, bidders can submit proposals, suppliers can save profiles containing business and contact details anywhere, and data is shared in real time. Communication channels are kept open and e sourcing tools provide customisable templates to prepare contract documents.
When combined with automation, each of these features and functions, and more besides, shaves time and costs off the procurement process for buyers and suppliers. For example, software generates standardised RFx documents (Requests for Proposals – RFPs), which streamline sourcing processes for both parties.
Automatic applicant tracking systems can pinpoint potential suppliers as they move through the procurement process. As a result, there is no risk of data duplication and no chance that steps will be missed throughout the contract management lifecycle.
9 Benefits Of eSourcing For Buyers
eSourcing has many benefits for contracting authorities and suppliers. Let’s start with buyers.
- Platforms are structured to help identify the right supplier who will provide the best value overall, which is more than just pricing.
- Automation is far more efficient, accurate, and faster than inefficient and time-consuming manual processes.
- The central hub increases transparency in the procurement process as all stakeholders have access to the same data in real time. This encourages competition and innovation among suitable suppliers, which boosts contract value for buyers.
- eSourcing software includes data analytics that provide information required on the spot, so buyers can make informed decisions as and when necessary.
- Transparency and open communication helps to build supplier/buyer relationships based on trust.
- Software also facilitates supplier management and helps optimise opportunities and mitigate risks.
- eSourcing tools evaluate suppliers according to preset criteria, negotiate contract terms and conditions, and even award contracts to the best candidates.
- eSourcing software enables buyers to set filters that narrow down eligibility criteria – sorting out niche suppliers from the general. Filters include location, services, certifications, etc.
- eSourcing platforms enable comprehensive contract management, including tools that provide an overview of the whole contract, track progress, and monitor KPIs, compliance, and other contractual obligations.
8 Benefits Of eSourcing For Suppliers
Now let’s see how suppliers can leverage sourcing platforms to unlock key benefits that improve their chances of procurement success.
- The bidding process is fair for all potential suppliers, regardless of size and (in theory) experience. Transparency ensures they have access to the same information about the contract and contracting authorities.
- The ability to streamline processes boosts productivity. Automation manages routine, repetitive, and tedious tasks that would ordinarily fall on employees’ shoulders. Now employees are free to concentrate on their core (strategic) tasks.
- Supplier profiles are easy to manage and update, so they always receive the most relevant alerts, including notices about e-auctions and changes to contracts in the pipeline.
- Transparency benefits for suppliers include access to real time data, for example, answers to questions and details for clarification.
- Transparency also includes feedback. Contracting authorities are mandated to provide feedback to all suppliers who submit bids, regardless of success.
- Suppliers and buyers have equal access to the central platform’s eSourcing tools, which means they can be integrated for fast and efficient public sector procurement processes.
- Because the time it takes to complete and submit a bid on an eSourcing platform is much shorter than manual processes, there is more time to source, assess, and apply for additional contracts. This increases suppliers’ chances of success in the competitive public procurement market.
- Effective collaboration narrows down the services required, creates realistic expectations, and sets achievable KPIs. Suppliers know exactly what is required, so they can decide if they meet the criteria sufficiently to submit a bid, or if they should focus their attention elsewhere.
eSourcing Software Helps Maintain Regulatory Compliance
Some eSourcing platforms have tools that can generate reports regarding suppliers’ compliance with regulations.
For example:
eSourcing & Social Value in Procurement
eSourcing software often incorporates a range of tools that help buyers determine suppliers’ social value and sustainability initiatives. For example, they can assess suppliers’ sustainability using data from existing and previous environmental and social value initiatives, projects, and processes.
Similar sustainable procurement tools can be used to determine suppliers’ ethical sourcing procedures, such as no links to modern slavery, using renewable energy sources, and diversity in the procurement team workplace.
The Risk Of Not Using eSourcing Solutions
Failing to incorporate eSourcing software into their sourcing strategy leaves buyers open to several, avoidable, risks. The most obvious, and perhaps the most telling risks are related to manual procurement processes and old legacy systems.
Without public sector procurement tools, there’s the risk of inaccuracy from human error. Too much time is spent on manual operations, leaving very little time for identifying opportunities that optimise sourcing processes and procedures. For suppliers, this affects innovation, which strips them of any competitive advantage and actually leaves them a couple of steps behind other suppliers in their field of public procurement.
eSourcing technology has search features that help buyers identify and select qualified suppliers. Lacking eSourcing software makes it difficult to find qualified suppliers from a large talent pool. This adds time and costs to the sourcing process and can result in iffy supplier selections that do more damage than good – further increasing time and costs.
Now You See Me
One of the biggest benefits of eSourcing software is the transparency across the board. This is crucial in light of regulations included in the Procurement Act 2023. There is no such benefit when suppliers and buyers don’t use eSourcing tools. Communication suffers and there is little cohesion, integration, and standardisation when there is no unified platform available.
Now You Don’t
Instead, emails get lost or are sent to the wrong people. This can lead to misunderstandings that result in ugly disputes. Without electronic tools and a clear audit trail it’s impossible to quickly and easily verify data to settle disputes and track procurement progress.
Critical dates can be overlooked and establishing compliance to any regulations at all is a nightmare. Forget about innovative collaboration that benefits all parties, including the public.
Perhaps most important of all are the security risks. There are too many threads and too many people involved to adequately protect and secure sensitive data. There are too many vulnerabilites in procedures and communication to prevent data breaches and malware from getting through.
All of these risks fly in the face of procurement reform and the new procurement regulations.
Delta eSourcing Meets All Your Needs In The Age Of Procurement Reform
Delta eSourcing is one of the leading eSourcing platforms in the UK. You can enjoy the benefits that range from data analytics and supplier and tender management to resources for the Procurement Act and, of course, access to over 100K active suppliers.
Our services epitomise the new Act’s goals to drive collaboration and innovation, ensure fairness and transparency in sourcing processes, develop local communities using social value principles, and encourage and support suppliers of all sizes who want to enter the public procurement market.
Book a free demo to find out more about our eSourcing tools and services for buyers and suppliers or contact us to learn more about Procurement Act 2023 compliance and the resulting procurement reforms.
