European Commission: By 2016 E-procurement will become the norm for public bodies

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E-procurement is a hot topic around the EU now yet despite growing recognition of the significant benefits of adopting this way of working, the EU is slow to adopt it as a way of working. At present, it is estimated that only 5 – 10 percent of purchases made by EU bodies are carried out electronically although talk of growing this reached fever pitch in June 2012 with the Conference on Electronic Procurement. 

Prior to this conference, a press release was issued by the EU Commission stating that by 2016, most European Union procurement activities would be carried out electronically and that by this date it would be the rule, rather than the exception. The EU is eager to transfer to E-Procurement for a wide range of reasons, many of which pivot around the issue of cost savings. Reports from those areas in the public arena that have fully adopted electronic procurement methods are showing significant savings of between 5-20 percent on traditional methods. When combined with the other tangible benefits that e-procurement can bring, it is unsurprising that implementation is top of the agenda.

 

Reduced procurement costs

Traditional procurement methods in the public sector involve swathes of personnel to carry out manual functions. E-procurement systems automate many of these processes so reduce the need for user input. Whilst it is impossible (currently) for the system to handle procurement independently, it does free up staff time to focus on other areas, including obtaining better value for money.

E-procurement at the European level will almost certainly also include an e-tendering module. Automating the tendering system saves significant amounts staff time and cuts down the use of paper and postage on a huge scale. Current tender methods involve stages, all of which have be managed and administrated manually, including posting notices, posting out PQQs, opening envelopes, reading, filing, sending out ITTs and repeating the process etc. and most of those can be abolished under e-procurement.

 

More streamlined and integrated EU

E-procurement can help to unite disparate elements of the EU by sharing a common system. By having access at a local level to an organisation-wide system, the need for multiple procurement and purchasing departments can be reduced and one, specialist team can manage the whole process. The EU is a huge organisation and benefits greatly from systems that encourage cohesiveness.

 

Reduced barriers to market entry

SMEs across Europe struggle to tender for work at EU level. Whilst the system encourages smaller companies to participate in tendering, the reality is that it is too expensive, too complicated and too unlikely they will win work. Tendering at EU level is something that many small companies just cannot afford to do, financially and time wise. E-procurement should simplify the tendering process and make it easy for SMEs to identify the right tenders for them, to participate and to compete on an even playing field.

 

E-procurement issues facing the EU

It may seem that 2016 is a long time to make change in the way the EU operates but in reality, this is an ambitious deadline. The EU is a large organisation with many different organisations within it. It is unthinkable that the EU could adopt a one-size fits all e-procurement model and so developing several suitable systems at the same time will be the biggest challenge. Not only that, those systems will cost money and that has to be value added. Sourcing, tendering, implementing and testing EU wide will be a huge undertaking so there are a large number of obstacles before the benefits even become apparent.

About the author: This was an article by David. David writes for Procserve E-Procurement on business and public sector finance. In his spare time David enjoys learning about cloud computing and technology.