The State of Georgia's Department of Administrative Services
is engaged in a multi-million dollar investment in new procurement
technologies and processes that will unite statewide entities into one
comprehensive buying consortium.
The state's decision represents a new approach to purchasing within
the public sector. The vision for such a transformative overhaul is to
aggregate spending across statewide entities -- such as agencies,
universities, municipalities and hospitals -- that typically operate
independently, but whose untapped power as a single buying consortium
has the potential to drive dramatic cost savings and process
efficiencies.
"It is well known that the consolidation of buying power often
represents the single greatest opportunity to contain costs," said Brad
Douglas, commissioner for the Department of Administrative Services for
the state of Georgia. "Our decision to take a new approach while using
proven systems and technologies will enable the state to accomplish
more with its revenue and free employees from time-consuming
administrative work."
Most state entities run their operations independently, with
disparate enterprise resource planning (ERP) systems, different
purchasing practices and very distinct needs (i.e., the purchasing
needs of a hospital differ from those of a police department). Without
a core eprocurement technology capable of integrating these systems and
practices, broad user adoption is limited.
It also has been a practice among state governments to populate
their procurement systems with tens of thousands of suppliers to
facilitate unlimited choice. The challenge with this approach is that
users are often overwhelmed by the sheer volume of options and the
complexity of the systems used, which makes it difficult to find the
best contract supplier for the given need. It has also become
impossible to incent suppliers to discount their prices in an
environment where the opportunity to gain significant market share is
slim.
Instead of recruiting thousands of suppliers to join its procurement
network in equal fashion regardless of their contract status or level,
the state plans to provide a more competitive environment for suppliers
to vie for state contracts and a preferential position on its
eprocurement network. In this way, the state can negotiate more
favorable contracts and provide employees across its agencies with
better-priced goods and services, without compromising on choice, thus
providing suppliers the opportunity to grow their transaction volume
across the state.
Source: http://www.govtech.com/