The Role of Public Procurement in Digital Transformation (Part II)

Earlier we published part I of this blog post to introduce DIAL’s strategy and thinking as it relates to public procurement and digital transformation. We shared some early insights from our recent listening study and goals of our Category Guide for Procurement of Digital Technology. Now, we will share our ideas for what this guide will look like. 

Who will use the Category Guide? 

Let’s use an example. Ifeoma is the head of a strategic procurement team in her country’s Ministry of Health. Her business unit receives a request to purchase an e-health patient case management tool for a newly built regional hospital. Ifeoma knows that the President’s Office in her country recently launched a digital transformation strategy, she attended the launch event and heard about the plans to build a local digital supply market and move toward stronger e-government.  Ifeoma would like to plan a strategic procurement approach that can meet immediate and future Ministry needs and align with the President’s initiative. Perhaps she can find a supplier locally or nationally to meet the Ministry requirements.  

The Ministry has a limited budget for this procurement, thus making affordability and ensuring the user outcomes are met key. Ifeoma and her team know that the Health Ministry is planning to open two more health centers in their jurisdiction in the next year and believes these new facilities will have similar requirements. She would like to ensure the limited budget available can address current and future needs, though she knows digital technology is rapidly changing. Ifeoma’s government has no centralized procurement. Each Ministry budgets and procures its own technology, guided by national regulations in a decentralized procurement model with limited specialized support. 

Ifeoma accesses the Category Management Guide for Procurement of Digital Technology. The Guide refers Ifeoma to a range of resources that assist her, and her team make decisions about what, why, and how to buy, such as: 

  • How and why she should consider embedding the Principles for Digital Development in the procurement process  
  • How she could practically take an agile approach to this procurement and why she might want to consider approaches other than traditional RFP processes  
  • How to delineate the nuances of procuring digital technology (build vs buy, open-source vs proprietary, cloud-hosted or server-hosted, license restrictions, data privacy) 
  • How to understand and measure demand beyond an immediate project or ministry 
  • How to conduct market research and identify her supplier base, including use of the DIAL online Digital Product Registry 
  • How to understand pricing structures in the industry, total cost of ownership tools and return on investment 
  • Sample clauses that could be included in a contract to avoid pitfalls such as vendor lock-in and inflexible or expensive access to future enhancements. 

What are we planning next? 

In our future strategy, we will be advocating for more low-income countries to demonstrate that successful national digital transformation and responsible data use can improve service delivery. If global development actors align financing, policy, and research investments to support the tools that these countries want, then an increased supply and usage of appropriate and affordable digital global goods will be available to procurers and more countries will see whole of society benefits for their citizens.  

At DIAL, we believe that the Guide will assist Ifeoma and her team make decisions for this immediate procurement need. However, an overall strategy would facilitate a more unified approach by various government institutions and public entities. Were Ifeoma to be part of a central procurement authority, able to look across all line ministries, and coordinate demand regionally or nationally, the options open to her would be greater. She would be able to contribute to achieving government policy goals such as innovation, digital economy job creation, and the development of small and medium enterprises. Whilst coordinated procurement business models are most commonly utilized in the vaccines sector, the global COVID-19 crisis has brought startling clarity to the value and benefit of nationally scaled technology solutions, as opposed to fragmented, ministry-specific approaches.  

Following initial testing of the Guide, we will look for partners to work with us to implement the Guide and further develop it to become a support to more coordinated joint procurement. We believe it could develop to focus on joint purchasing approaches, and achievement of performance targets such as digital inclusion, sustainability, or promotion of local technology innovation, and other guidelines related to citizen centric public procurement. We will be actively looking for collaboration opportunities in future.  

Photo Credit: #WOCinTech Chat