Try picturing a scenario. Imagine it’s a few years from now, and you’re at a conference about public procurement. A CIO from a major public agency gets up to speak to the audience of suppliers—and tells them a new approach is needed to achieve the outcomes the government is seeking.
Since no single firm can deliver everything, and money is tight, the CIO wants the suppliers to form collaborative consortia to provide the necessary capabilities and innovation. Of course, government will help to create the commercial models to make this happen. Meanwhile, sitting quietly in the corner of the room, the head of procurement from the same agency is listening ashen-faced, wondering how on earth to manage it all.
Guess what: this scenario isn’t the just the future. It’s playing out today, and I know because I’ve seen it happen. And as public agencies strive to modernise their core operations to keep pace with changes in society, rising citizen expectations and technological evolution, the pressure for new procurement processes and operating models will intensify—with the need for new commercial models topping the list of priorities.
At root, these shifts will have two particularly interesting impacts on public agencies who embrace the need to evolve their core. The first is that they’ll become increasingly “boundaryless”, accessing the capabilities and skills they need by collaborating and data-sharing across their ecosystems of partners, both internal and external.
The second is that they’ll need to be “adaptable”, able to respond in an agile way to change around them and harness new technologies quickly and easily. This can be difficult from a procurement perspective, as changes in requirements within a project are not easily managed under the models that are currently available.
Nowhere in today’s government sector is this need to develop these attributes more pressing than in border agencies. As the trends I’ve described play out, they’ll have significant effects on all the participants—both public and private sector—involved in managing and securing our borders.
So, what will those effects be? On the border agency side, an initial impact will be that we’ll see fewer instances of big, multi-year transformational investments. In a fast-changing environment, this will partly reflect the difficulty of predicting and mandating what will be needed and how it’ll be delivered in three to five years’ time.
The ideal situation in which to launch a large change programme is one where the outcomes, standards, regulation and governance arrangements are all clearly defined. In my view, we’ll see the role of border agencies shift towards ensuring these supporting elements are in place. The result? An environment where the agency defines the outcomes it’s seeking for customers—and then supports its public and private sector partners in working out how those outcomes can best be delivered, and what collaborative commercial models will be required to ensure sufficient benefits on both sides: better services for users/government, and adequate financial returns for suppliers.
These changes also bring big implications for suppliers. With the focus moving towards value-based models that deliver benefits for both provider and public agency, large suppliers with the financial clout to invest up-front may have an edge. So border agencies may encourage larger suppliers to tap into an innovation ecosystem that includes smaller players, including start-ups. While consortia are not new, historically they have developed in response to large scale tenders; whereas the future is likely to see consortia broaden to include smaller firms with innovative technology, research and design-led capabilities.
Also, innovation will need to extend well beyond technology, into business, collaboration and revenue models. So border agencies should let their ecosystem of suppliers handle the heavy lifting of delivery technologies and innovation, and focus their own energies on understanding what users want now and will want in the future, by tapping into things like research, consumer forums and co-creation capabilities.
Combine this with their boundaryless ecosystems, and border agencies will have both a clear view of the outcomes they’re trying to achieve for users, and also the agility and flexibility needed to keep pace as those desired outcomes change. Armed with these attributes, success for agencies will be about choosing the desired outcomes and building the procurement and commercial models to deliver them (rather than vice versa)—and also about engaging the market before starting procurement to figure out how to best to do this. Put simply, it’s about embracing value-based models.
Overall, the message is clear. The innovation ecosystem to create the border services of the future is in place. The technologies are available. The challenge is finding the best way to tap into these to greatest effect. For border agencies, it’s time to take a good hard look at what your agency is good at and bad at, and consider the platform outsourcing models adopted by some agencies worldwide—be it PPP for x-ray equipment or Australia’s visa platform outsource. So stop thinking procurement of services, and start thinking collaboration around commercial models and outcomes. In other words, don’t just run the ecosystem. Join it.