U.S. Public Sector Accelerating Procurement Modernization
Investments in procurement outsourcing and platforms are increasing in the U.S. public sector, driven by the need for digital modernization post-COVID-19 disruptions. A report from ISG highlights a shift from stagnation to rapid transformation, with many state and local organizations implementing modern procurement systems. New federal funds are enabling these projects, addressing supply chain issues and staffing shortages.
Advanced procurement platforms enhance efficiency by incorporating automation and integration with financial functions. Despite challenges, outsourcing is increasingly seen as a solution to staffing struggles. The report recognizes leaders in procurement services, including CGI and GEP, while HCLTech is noted as a promising Rising Star.
- Growing investments in procurement outsourcing and platforms in the U.S. public sector.
- Increased federal funding supports modernization projects.
- Procurement platforms improve efficiency through automation and integration.
- Leaders in procurement services identified, enhancing ISG's market position.
- Outsourcing remains politically challenging in certain public-sector agencies.
- Public sector struggling to retain skilled procurement staff due to the Great Resignation.
State and local organizations achieve cost savings, compliance, improved processes through growing investments in platforms and outsourcing, ISG Provider Lens™ report says
The 2023 ISG Provider Lens™ Procurement BPO, Transformation and Software Platforms report for the
“Public sector procurement in the
For the first time, providers of procurement outsourcing and platforms are beginning to invest heavily in the capability to serve the
Procurement platforms remain the cornerstone of effective digital modernization. Many public sector organizations adopted early cloud-based procurement systems in a fragmented way more than a decade ago and built their operations around them, the report says. To streamline processes, reduce costs and comply with a growing number of cybersecurity and privacy regulations, agencies are now implementing more modern platforms that are modular and include interfaces to related functions such as finance, making way for higher efficiency and tighter control.
The new platforms offer standardized application and enforcement of policies, with improved user experience, and enable sharing of clean, trusted procurement data throughout the organization, ISG says. Many also include automation features powered by machine learning and natural language processing that can improve operations and reveal new opportunities for optimization.
While outsourcing remains politically challenging in some public-sector agencies, many are including it in their transformation initiatives as their procurement staffs shrink and skilled replacements prove hard to hire and retain, ISG says.
“The public sector suffered more than any other in the Great Resignation that followed the pandemic,” said
For more insights into the procurement challenges of the
The 2023 ISG Provider Lens™ Procurement BPO, Transformation and Software Platforms report for the
The report names CGI and GEP as Leaders in all three quadrants. It names Accenture, Deloitte, IBM and Infosys as Leaders in two quadrants each. Coupa,
In addition, HCLTech is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant.
The 2023 ISG Provider Lens™ Procurement BPO, Transformation and Software Platforms report for the
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
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FAQ
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