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McKinsey Endorses Digitizing Procurement and Payables to Optimize Public Sector Savings

By Orville Bailey, CEO, EqualLevel.

Every year the state, local and education (SLED) procurement market spends a staggering $1.5 trillion dollars annually on goods and services. In 2018, after analyzing more than 700 procurement efforts, management consulting firm McKinsey & Company concluded that at 28 percent, the public sector has the greatest potential for savings of any other sector (How smarter purchasing can improve public-sector performance).  In round dollars this adds up to the public sector potentially being able to save $400 billion through optimizing procurement. 

According to McKinsey, online tools can reduce administrative burdens. And there’s no question just the streamlining of operations alone could save hundreds of millions in non value-added time. Procure-to-pay automation improves the efficiency and effectiveness of the procurement and payables processes by digitizing manual tasks and leveraging transparency to improve decision-making. The public sector has long been plagued by the inefficiencies and costs associated with manual requisitioning, ordering, invoice reconciliation, and payment processing.

Innovating with a best-of-breed eProcurement and eInvoicing platform optimizes execution across all processes associated with the rec-order-pay transaction. A well-designed solution helps procurement and finance to streamline operations. The benefits of eProcurement and eInvoicing are numerous:

Efficiency: Automating leads to faster cycle times and improved productivity. The elimination of paper and manual steps frees up time for employees to focus on more critical initiatives.

Cost Savings: With all approved vendors housed in one centralized location, best value products can be easily identified.

Compliance: By automating the three-bid process and showing only contracted vendors, an eProcurement marketplace helps organizations comply with state and federal regulations.

Transparency: Robust reporting capabilities help ensure purchases conform to established policies. Real-time visibility into purchasing activities discourages maverick spending and provides leadership with valuable insights.

There is no doubt “the use of modern technology can take a big chunk off of public-sector bills” (Now is the Time for Procurement to Lead Value Capture) and the time to automate procure-to-pay is now. By improving efficiencies, the SLED market has the opportunity to generate savings that can help to offset the impact of COVID-19 and other budget pressures they are facing. 

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EqualLevel Congratulates 2022 NPI Achievement of Excellence in Procurement Award Recipients

EqualLevel is pleased to announce that five of its customers have been honored with the prestigious 2022 National Procurement Institute’s Achievement of Excellence in Procurement Award. We are proud to partner with each of these amazing procurement organizations. The value they deliver to their organizations and the public sector is unmatched, and their accolades are richly deserved.

The National Procurement Institute (NPI) is a non-profit organization that serves public procurement professionals. Their Achievement of Excellence in Procurement Award recognizes organizational excellence in public procurement. Recipients were selected based on five categories: innovation, professionalism, productivity, eProcurement, and leadership. The AEP is the premier award in public procurement.

EqualLevel congratulates the following entities on their important achievement:

NIP AEG Award Winners

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Best-in-Breed SAAS: The Best Value for Public Sector Agencies

In the past, public sector organizations contracted with large-scale vendors for a single platform of integrated applications. The data and information responsible for powering each organization were consolidated into one unified system. Along with its efficiency and uniformity, full-suite solutions also came with major shortcomings.

In general, updates for full-suite systems were infrequent and lengthy to install due to their size and coverage. These delays in innovation were inefficient, and they rendered the functionality of the suite incomplete. Workarounds became standard to support the ever-advancing functional needs of department users.

With cXML integration standards and the accessibility of open Application Programming Interfaces (APIs), agencies are starting to distance themselves from the full-suite approach and embrace best-in-breed solutions.

What is a best-in-breed solution?

Best-in-breed systems perform specialized functions within a given niche.

Instead of finding a universal software solution, agencies can install multiple best-in-breed systems and link them to create a specialized patchwork platform. As best-in-breed implementation becomes increasingly commonplace, organizations ensure that their full-suite systems are open, their standards are based with APIs, and they have well-detailed documentation to optimize the approach.

The Benefits of Best-In-Breed Solutions

Best-in-breed solutions are designed to adapt and provide solutions requiring focused performance and specialization. Best-in-breed programs are smaller than full suites and run independently, updating smoothly and seamlessly without affecting other systems, accelerating beneficial returns, and reducing project risks.

Their targeted focus allows best-in-breed manufacturers to quickly accommodate market changes and align solutions more closely with strategic business goals. Thus, agencies using best-in-breed solutions are more likely to create nuanced approaches to problems, quickly respond to market fluctuations and meet personalized requirements. Because these systems are optimized for each niche, implementation and training (if necessary) are lighter, while user experience is generally straightforward and involves fewer stakeholders. Organizations then have access to in-depth documentation that outlines functionality for each solution and its respective performance report which can be used to promote efficiency.

The Best Solution for Your Organization

Businesses are presented with a multitude of solutions. To find the one best suited for your organization, select a solution that:

  • meets your specific functional needs without compromises
  • is built on a modern SAAS technology stack
  • helps maximize your ability to leverage the current enterprise system, and
  • has a strong product roadmap of future innovations.

In a post-COVID economic environment that’s clouded with uncertainty, organizations, and teams should consider best-in-breed solutions rather than bearing the cost and disruption due to outdated, monolithic systems of the past.

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