U.S. Public Sector Picks Up Pace in Procurement

Rhea-AI Summary

The ISG Provider Lens™ report highlights the U.S. public sector's shift towards enhancing procurement systems, driven by challenges intensified by the COVID-19 pandemic. The report notes a surge in demand for procurement software and BPO services, with agencies seeking immediate operational improvements and cost reductions. It forecasts significant public-sector spending on these solutions this year, with potential first-year savings of 15-30%. GEP is recognized as a leader across all evaluated quadrants, while Accenture, IBM, and others excel in multiple areas.

Positive

• Increased public-sector spending on procurement software and BPO services anticipated.
• First-year operational savings for agencies reported to be between 15% to 30%.
• GEP named a leader in all quadrants evaluated.

Negative

• Government agencies face growing cost pressures and demands for digital capabilities.
• Supply-chain issues and workforce declines have intensified challenges in procurement.

Long-term challenges, intensified by pandemic, are driving agencies to seek improvement through software, outsourcing and transformation, ISG Provider Lens™ report says

STAMFORD, Conn.--(BUSINESS WIRE)-- The U.S. public sector is making a strong push to improve procurement systems amid far-reaching changes accelerated by the COVID-19 pandemic, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2022 ISG Provider Lens™ U.S. Public Sector – Procurement BPO, Transformation and Software Platforms report finds the pandemic has forced government agencies to update many functions that were long considered off-limits to change, including procurement. Even before COVID-19, growing cost pressures, demands for digital capabilities, and legacy systems nearing the end of life already weighed heavily on agencies. Lockdowns and supply-chain issues forced the issue.

“While the pace of digital transformation has historically lagged in the public sector, the disruption caused by the pandemic, along with ever-growing cybersecurity threats, have caused a dramatic increase in the demand for digital capabilities,” said Nathan Frey, partner, ISG Public Sector. “Doing nothing is no longer an option.”

Other unexpected changes driving agencies to improve operations include the need to support more knowledge workers in remote locations, a rapid decline in the public-sector workforce in 2021 and data insecurity and compliance issues, the report says.

ISG’s observations strongly suggest a boom in U.S. public-sector spending on procurement software, business process outsourcing (BPO) and transformation this year. Public-sector organizations, especially at the state and local levels, are seeking both immediate operational improvements and cost reductions and assistance in implementing more substantial change over time.

“Many agencies are seeking software platforms to standardize and improve their procurement systems and BPO services to improve efficiency and make costs more predictable,” said Frey. “After these initial steps, more agencies are likely to embrace full-fledged digital transformation of procurement, probably around 2025.”

The report identifies the key benefits of procurement software platforms, BPO services and transformation to public-sector organizations. For example, agencies can substantially improve operations using software platforms that include consistently and effectively applied automation, machine learning and natural-language processing. Case studies suggest first-year operational savings average between 15 percent and 30 percent.

The 2022 ISG Provider Lens™ U.S. Public Sector – Procurement BPO, Transformation and Software Platforms report evaluates the capabilities of 27 providers across three quadrants: Software Platforms and Solutions, BPO Services and Digital Transformation Services.

The report names GEP as a Leader in all three quadrants. It names Accenture, IBM and Infosys as Leaders in two quadrants each and Corcentric, Coupa, Ivalua, JAGGAER, Oracle and SAP Ariba as Leaders in one quadrant each.

In addition, Corbus is named a Rising Star – a company with a “promising portfolio” and “high future potential” by ISG’s definition – in two quadrants. Corcentric, Proactis and Tech Mahindra are named Rising Stars in one quadrant each.

A customized version of the report is available from GEP.

The 2022 ISG Provider Lens™ U.S. Public Sector – Procurement BPO, Transformation and Software Platforms report is available to subscribers or for one-time purchase on this webpage.

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 Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

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.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220506005279/en/

Press Contacts:

Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com

Erik Arvidson, Matter Communications for ISG

+1 617 874 5214

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

What does the ISG Provider Lens report say about the U.S. public sector's procurement improvements?

The report indicates a significant push for procurement system enhancements due to challenges from the pandemic.

What are the expected savings for public-sector agencies using new procurement software?

Agencies can expect operational savings of 15% to 30% in the first year.

Which company is identified as a leader in the ISG Provider Lens report for procurement solutions?

GEP is recognized as a leader in all three evaluated quadrants.

How has COVID-19 affected public sector procurement operations?

The pandemic has accelerated the need for digital transformation and efficiency improvements in procurement.

What changes are prompting U.S. public sector agencies to adopt new procurement systems?

Cost pressures, digital capability demands, and a decline in the public-sector workforce are driving this shift.