UK Green Paper: A Revolution for Digital Procurement?
Following procurement writer Tilly Kenyon’s of the UK Green Paper and the British government's intention to , and considering COVID-19’s ravaging of the country’s business economy, I decided I’d take a deeper dive into the highly-regarded document. And, to be honest, it did make for an interesting read.
As you might expect, we deal with procurement professionals a lot here, and after speaking to a few of them, one thing is clear: transparency and openness, as well as an awareness of social value, are infinitely important to the procurement process.
With the release of the Green Paper, the government set out its aim to overhaul public procurement in an effort to create more opportunities for innovative, small-and-medium-sized enterprises to win contracts. An excellent initiative to wrestle both economic power and popularity away from the industry-leading multinational corporations, which should level the playing field somewhat, I believe.
The Green Paper says all the right things ─ which is one of the most concerning factors. There’s a shout for openness and a process that supports SMEs echoing down a Westminster-sized auditorium, but I’m not so confident in the government's ability to implement. And, let’s be honest, enforcing the rules in a society where the leading companies seem to have loopholes through government ties left, right, and centre will also be a tough task.
To truly enforce change, the government would have to strictly state that X will be changing so that Y can benefit. That would signal a big change. That isn’t what’s happening here.
Is There Really Support for SMEs?
The Green Paper provides a clear outline of the government’s renewed commitment to working with small businesses ─ which is great. Anything that makes it easier for SMEs to join major players is always a plus. It should give buyers more options, and it will stimulate competition, diversity, innovation, and growth in the country’s procurement industry.
This show of commitment to more open, simplified, and transparent procurement processes is welcome, but one key question still remains: how will it actually play out in practice? Looking past the statement itself, there isn’t any framework set out to provide tangible help for the smaller businesses.
Looking at current regulations and strengthening them, as the government plans, is sensible, but that action doesn’t really add too much value to suppliers. So, as Adam Maddison writes, “I don’t expect our day-to-day experience to be much different”.
“There is such a huge opportunity now that we’re beyond the Brexit transition to improve on the past. Several conflated systems, formerly OJEU and a slew of other regulations, that effectively restricted and stymied access to amazing innovation from smaller businesses and startups, should be stripped back.
The green paper sets out to simplify and standardise approaches. This can only be a good thing.
Partnership will play a major role going forward. I’ve been heavily immersed in public procurement for many years now and have already seen the direction of travel: partnerships and consortia ─ a dramatically visionary approach by the government towards entrepreneurial partnerships with new and smaller players. This is easily evidenced in the smart city space in local government up and down the country. The public procurement landscape is already changing for the better around us.”
The Biggest Barrier: Buyer Behaviour
But before we get carried away, we need to address the biggest issue that SMEs face right now: buyer behaviour.
For their support to be of any use, the government must step in and start mandating individual buyers to acquire goods and services stringently within a specific set of parameters or rules. Because, as I previously mentioned, larger corporations and stalwarts with international scope tend to be simultaneously bullish and sneaky in their methods ─ ergo, not necessarily “by the book”.
There’s a crucial role open at this point: leading corporations, rather than scorning at the levelling-out of their playing field, could take the initiative to empower smaller buying organisations by providing best practices training in agile procurement. In essence, they’ve got the opportunity to lead by example. Ultimately, if it’s done right, a commitment to greater transparency should better the status quo for both big and small organisations, and it’ll help to keep everybody accountable.
Something that, I think we can all agree, is absolutely essential in all industries.
Coupa Launches US$50 Million Ventures Fund
Operational resilience and agility. Following the events of the last twelve months, companies have focused on these strategic areas like never before. Some, as we’ve noted, have started to wonder whether this trend will continue post-pandemic—or will we go back to the same old supply chain? Not if Coupa Software has its way.
Last week, the company launched Coupa Ventures, a global fund that will invest US$50mn in early- and growth-stage companies that target business spend inefficiencies. “Coupa Ventures enables us to invest in a future where businesses and their suppliers can harness the power of their spend to constantly adapt, transform, and innovate”, said Rob Bernshteyn, Coupa’s Chairman and CEO.
What’s Business Spend Management (BSM)?
Let’s be honest, it doesn’t sound particularly sexy—it sounds like a subsection of the finance department. But business spend management, together with ERP (enterprise resource planning), CRM (customer relationship management) and HCM (human capital management) make up the core operating process of any company out there. When companies spend money, sign contracts, analyse supplier costs, take inventory or budget for the future, that’s BSM. Overall, business spend management is made up of three main areas: procuring materials, managing invoice, and handling expenses. Essentially, it’s the engine of the entire operation.
Why Change It Up?
According to Coupa, the next wave of BSM is now. It wasn’t always this way: in March of 2016, advisory giant Gartner claimed that BSM was dead. At that time, the firm was partly right. Companies couldn’t handle trillions of bits of data by themselves—and they were sinking as the waves of big data swept over their heads.
But recent developments have meant that BSM isn’t fated to die just yet. “The key to optimisation is data—and not just any data”, Coupa stated. The company has supported community intelligence, in which machine learning uses anonymised data from hundreds or thousands of client companies to suggest better spend tactics. This way, companies can get better insight into their suppliers, track supply chain disruptions, and investigate procurement alternatives.
This network effect is part of what makes Coupa Ventures so exciting. Said Eric Christopher, co-founder and CEO of Zylo, “We’re excited to join an expansive ecosystem of customers, suppliers, and partners”.
First Companies in the Ventures Portfolio
- Zylo, a leading SaaS management platform that helps companies manage cloud-based applications, offers visibility into what software is being used, how much is present, and how a company can optimise its software investments.
- SourceDay, a leading supply chain performance solution, bridges the gap between a company’s enterprise resource planning (ERP) and its supply chain network.
At SourceDay, Coupa’s investment is heralded as a chance for the company to really take off. “The investment from Coupa Ventures will...enable our joint customers to save money and leverage supplier performance as a competitive edge”, said Tom Kieley, SourceDay CEO. “We’re honoured to expand our relationship with the Coupa ecosystem”.
Looking ahead, Coupa will capitalise on community intelligence to help its partners make smarter spending decisions. “[Organisations will] place bets on which investments will quickly pay off to accelerate their growth and resilience in the post-pandemic economy”, said J.J. Freitag, senior vice president of Corporate Development at Coupa. “[And] we’re looking to back the best ideas across Europe and beyond to help businesses build back even stronger”.