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Combining innovative practices and the latest technologies to achieve cost-effective, “joined up” government
Detailed analyses of reported fiscal balance and public sector procurement information suggest that many government agencies could dramatically pare their deficits by increasing procurement efficiency. In fact, Accenture comparisons have shown a 10 percent reduction in public procurement costs translates to a one percent to three percent budget improvement relative to Gross Domestic Product (GDP).
Accenture believes public service executives need to “think outside the bottom line” to reduce costs and boost performance. This point of view explores how four initiatives can help governments continue to serve the public well while turning to their procurement departments to save money.
As government agencies worldwide face crushing debt and declining revenue, it is a natural step to turn to procurement as a means to save money. Yet challenged by a fragmented operational model and the need to continue to serve the public well, governments are realizing they need to embrace a new approach—employing mission-critical procurement to achieve better business outcomes. Accenture believes public service executives also need to aim high using innovative, connected procurement techniques to cushion the impact of turbulent times.
Previous Accenture research1 has shown the importance of adopting a holistic approach to procurement practices as the best route to mastery. We found not only that “procurement masters excel across the board” but also that roughly 16 percent of organizations cited as “procurement masters” showed consistently high proficiency across six dimensions: strategy; sourcing and category management; requisition to pay; supplier relationship management; workforce and organization; and technology. Bottom line? Insular improvements may help lower costs, but holistic efforts are better. While this message may have already reached to the private sector, the public sector appears to be struggling with the concept, despite its size, scale and power-house buying capabilities.
1 High Performance through Procurement: Accenture Research and Insights into Procurement Performance Mastery, Accenture 2007
Radical changes are needed for government organizations to improve their existing cost management performance. The time is right for the public sector to apply connected procurement to achieve high performance. Read the full point of view to find out how four key initiatives can help governments and public service agencies introduce new value by:
Learn more about how connected procurement helps governments achieve high performance:
April 20, 2012
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