By Alan Dowless
U.S. federal procurement teams – as discussed in our last post – have come under immense scrutiny for failing to provide transparency into government spending.
While this situation has many layers, two primary issues stick out: missing information and poor data quality. In fact, despite publicly-stated goals to be more transparent, a recent report from the Government Accountability Office (GAO) found that USASpending.gov is missing a whopping $619 billion in spending. And of the data that was actually recorded, less than 7% can be confirmed as accurate.To be fair, transforming the way our government captures, analyzes and manages its spend is no easy task. This transformation represents a massive, complex shift that will take a significant investment in people, process and technology.
But it’s far from impossible. Take, for instance, the UK’s Government Procurement Service (GPS), which faced a similar dilemma to what we are seeing today. Operating in the volatile, unforgiving economic climate of 2011, the GPS faced immense public pressure to improve spending visibility, eliminate waste, and most importantly – find billions of dollars in savings.
Of course, several barriers stood in the way of a transformation:
- Government spending was only analyzed at a very basic level
- Departments lacked granular details on categories and suppliers
- Billions of dollars in spending was spread across millions of suppliers and thousands of organizations and departments
- The data – typically raw and inaccurate – was housed in rigid, homegrown systems
These obstacles created a blurry picture of government spending – at best. And without insight into what they were spending, with who and on what, the UK public sector was missing massive opportunities to consolidate the supplier base, negotiate volume-based discounts and ultimately, save money.
Everyone knew that change was necessary. Figuring out how to go about it was a bit trickier.
Ultimately, the GPS invested its time and resources on spend management, and launched the largest spend analysis initiative ever recorded in the world. Their thinking: if they truly wanted to eliminate waste and secure meaningful and lasting savings, they had to start at the beginning.
Leveraging BravoSolution’s spend analysis technology, the GPS was able to analyze more than £47 billion in spend across 78 organizations in just two months. And within the first year, the initiative saved more than £5 billion and gave the Central Government unprecedented visibility into its spending. The program continues today.
So how exactly did they the GPS go about this process, and what can U.S. public-sector professionals learn from this experience?
David Shields, the former Managing Director of the UK Government Procurement Service, will be presenting to a select group of CPOs on September 12th in Washington DC. David, who led this spend analysis program, will share best practices and strategies on government spend management and transparency. We’ll post a recap of his top recommendations following the event.
Limited space for the seminar is still available. If you’re interested, register today.
