Last updated on September 20th, 2024
Procurement is in the spotlight on global, federal, state, and local stages. Driven by rising costs, supply chain fragility, the beyond-fast evolution of technology, social and environmental concerns, ever-changing legislation, staffing challenges, and more, all levels of government are being challenged like never before to modernize procurement with a keen eye toward cost savings, sustainability, and compliance.
One survey identifies the complexity of systems and processes as the top procurement challenge across industries, with rising costs and preparing for unexpected challenges being the next two biggest challenges for government.
The National Association of State Procurement Officers (NASPO) defined top priorities for state procurement in 2024 as modernizing the procurement process (moving up from the fifth priority in 2023), continuous process improvement, talent management and succession planning, and more.
Cybersecurity, sourcing requirements, climate/sustainability, supplier diversity, and more are converging to put more demands on procurement. Agility to promote repeatable quality processes that offer flexibility, deliver results faster, incorporate user feedback, and respond to changing needs while addressing talent challenges and upholding the myriad of regulations appears to be central to addressing today’s procurement challenges.
E-procurement is taking the lead as a prominent trend, with municipalities increasingly adopting digital solutions for tendering, bidding, and contract management in an effort to shorten the procurement cycle, enhance transparency, reduce paperwork, and improve efficiency. At the same time, it promotes equal opportunities among suppliers to bid by providing greater access to information.
Sustainability is increasingly being embedded into procurement practices, with a focus on acquiring services and goods in a manner that protects and supports the environment, while promoting ethical practices and supporting social welfare. (New York’s Green Purchasing Community provides a framework for local governments to ensure purchasing has a lower environmental impact while earning points toward Climate Smart Communities Certification.)
Data analytics and artificial intelligence point to increased opportunities for municipalities to use data for insights on spending, performance, and market trends. AI can help detect fraud, improve decision-making, and automate processes, while predictive analytics improves forecasting and increases cost savings. According to NASPO, there may be ways for AI to help vet suppliers, track supplier performance, identify problem suppliers, and detect fraud.
Beyond technology, municipalities are looking to create job opportunities and drive economic growth with a greater focus on supporting small and medium-sized businesses (SMBs) via their procurement processes. Some are adopting policies to award a percentage of contracts to SMBs while making bidding easier and providing assistance to help SMBs navigate the process.
As your municipality explores opportunities to modernize procurement while operating within New York State laws, you can count on RBT CPAs to focus on your accounting, audit, tax, and advisory needs. Give us a call to find out how we can be Remarkably Better Together.
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