Public Sector Procurement Fit for the Digital Age

Andrew Cooke, Global Policy Lead in Microsoft’s Worldwide Public Sector team, shares a new paper outlining how public sector organizations can address common issues preventing digital transformation progress.

Microsoft has long supported government customers around the globe with their digital transformation procurement requirements. We have trusted experience dealing with an array of national and supa-national procurement laws, policies, and practices, and have assisted public sector customers to harness the power of innovative and scalable cloud technologies to meet their evolving requirements.

Since we published Building Blocks for a Successful Digital Transformation Strategy in 2022, we have been looking in detail at some of the friction-points in procurement policies and practices, which may prevent governments from fully embracing the benefits of the latest and most innovative cloud technologies.

We have heard from several governments that they both want, and need, to modernize their approach to technology procurement and to mitigate the risk of the public sector falling behind in the benefits made possible through digital transformation. We see a big part of our role as working together with public sector stakeholders, offering our insight and ideas on effective technology procurement, to ensure that acquired solutions continue to match real-world requirements.

Public Sector Procurement Fit for the Digital Age: Flexible, Collaborative and Outcomes-Focused is a discussion on the principles (both current and prospective) that underpin successful public sector procurement. We set out our reflections on current procurement pain-points and importantly, our recommendations on “ways forward” that can best enable governments around the world to more easily procure the digital transformation technologies that are so essential for their future success.

Some of the key findings addressed in the paper, with recommended ways forward, are:

• There are significant benefits in taking an expansive, forward-looking, principles-based approach to procurement. This should include incorporating established and necessary principles such as integrity, accountability, efficiency and transparency; and recognize that innovation and sustainability are also important principles in driving forward a successful digital strategy
• Adherence to legacy contractual terms can stifle innovation, when they are more suited to traditional outsourcing or acquisitions of hardware or on-premise software
• A flexible approach to procurement need not mean a risky approach, rather flexibility can result in better products, solutions, and outcomes for all concerned
• Flexible framework agreements are powerful procurement tools enabling governments to “contract once, procure continually”, especially when anticipating the inclusion of necessary vendor terms, and reinforced by the issuance of practical guidance
• Taking a whole-of-government approach to procurement maximizes efficiencies and helps achieve scale
• Embracing flexible financing rules is essential to overcome capex/opex constraints and enable governments to make multi-year commitments
• There is often a need to update legacy policies, including policies in respect of the classification and security of data, to align with modern privacy and security controls and features of cloud technologies, to achieve benefits sought
• Regular dialogue between procurement agencies and cloud service providers enhances the understanding of the technology and builds trust

The journey to digital transformation is a constantly evolving one. A more flexible and collaborative approach to procurement creates a win-win for both public sector customers and the citizens they serve. That is why continued dialogue and collaboration with industry is so very important.  We look forward to continuing the cloud and digital transformation procurement conversation with the public sector community in the months and years to come.