The Procurement Act 2023 will have a significant impact on the public sector procurement market, especially regarding SMEs, social value, and innovation. There is particular focus on innovation because most of the public sector still depends on old legacy systems that, in this sleek and streamlined modern age, are clunky, cumbersome, and inefficient.
However, legacy systems are familiar and when given the choice, most people will go with the devil they know, rather than the devil they don’t. Not that the Act is anything like a devil, of course. Change is also not always easy, so there’s ongoing resistance to innovation – self-imposed barriers to innovation in the public sector, if you will.
The Act is designed to smash barriers and put collaborative innovation at the forefront of procurement.
We’re going to take a closer look at innovation in the public sector and the role the Procurement Act plays in driving innovation forward.
A Culture Of Collaborative Innovation
One of the biggest barriers to innovation is mindset. If things have been left as is for a long time, they’re usually left as is for even longer. It’s comfy and people like to be comfy. It’s that kind of mindset that innovation is up against. Procurers and suppliers must be encouraged to think big. They must feel confident to share the idea with the team. With constructive feedback and trial and error it’s possible to make a tangible difference to things like recycled packaging or green logistics.
This type of culture of innovation requires top-down and bottom-up approaches to work with each other for a shared goal, fostering a collaborative culture. Everyone should be included because you never can tell where a good idea is going to come from.
Use Intelligence Other Than Human
Artificial Intelligence, Machine Learning, and other forms of digitisation have a huge role to play when driving innovation in public procurement. They excel at boring tasks that require a high degree of concentration and accuracy, like data collection, analysis, and basic decision making. This leaves plenty of time for creative, innovative collaboration using collaboration tools.
This is so important because, according to a report by YouGov and Microsoft, 73% of workers consider themselves creative but feel stifled by the prevailing workplace environment. It’s possible to turn this around if managers and other positions of power make a point of enhancing and unleashing their creativity and encourage their teams to help bring this vision to fruition.
Their valued participation and contribution can be the launching pad they need to be more open with their ideas.
There are no laurels to rest upon
Managers must continue fostering collaboration and innovation by following these four tips:
1) Encourage curiosity
People who are curious ask questions. They want the answers to these questions, and if they have to find them themselves, so be it.
It’s important they are supported on their innovation mission, this includes time to let the ideas swirl until they are organised in dreamers’ heads and providing other resources, like audiences who act as sounding boards and contribute their valuable two cents. Resources to experiment, test, get feedback, and improve upon the idea – or refashion it so it better suits the company’s services – are also essential. Encouraging diverse perspectives can further enhance creativity and lead to more innovative solutions.
2) Managers must become team coaches or consult professional business coaches to nurture innovation
It’s a long heading. Essentially, it means that managers must become trainers who provide their teams with ongoing education and resources to encourage curiosity, out-the-box thinking and instill the confidence team members need to step up and own an idea.
Leadership commitment is crucial in this process, as it fosters a culture of trust and open communication that encourages shared goals and resources.
People are more comfortable to do this in that include active listening, open (exploratory) questions, and ideas that have the potential to build on and enhance the original innovation.
3) User-centricity
This is your target market, which you must understand inside out and backwards. Look at the world through the contracting authority’s eyes. Can you understand their world perspective today? Can you imagine what their world will be like in the future? What are the opportunities for innovation that can bridge the two and improve operations for everyone? Can you deliver?
You might spot opportunities for healthcare-related community training and try to incorporate relevant training material for the community and the contracting authority you’re working with.
4) Provide a stimulating work environment
Workers say that a creativity crushing environment is one of the greatest barriers to innovation. There are several ways this can be addressed. It could be something basic, like walls painted a brighter colour. It could be some chairs and a table out for people to drink their tea or coffee in the fresh air.
That’s external, largely superficial stuff, but there’s other, perhaps even more important steps to take.
Events: Send staff to relevant events so they can network, yes, but also learn from their peers and to be inspired by new ideas, ways of thinking, points of view. Sometimes, all it takes to unlock inspiration is a phrase from a leading guest speaker at a conference.
Technology and Innovation
The UK’s public sector is a little slow on the uptake, digital technology-wise. There are a bunch of reasons, varying from price to change resistance. Digitisation is the new watchword and the government plans on transitioning the entire lot to more advanced, sophisticated technologies that will make life easier for all concerned, even the public.
What Can Tech Do For Public Sector Innovation In Procurement?
AI, Machine Learning, and IoT (the Internet of Things) can revolutionise the way in which government departments are run, largely by taking on burdensome administrative tasks, which then streamlines admin processes making it easier for contracting authorities and suppliers to get through the procurement process.
There are virtually no admin errors, information is categorised and stored objectively and correctly. Data generated can be used to make insightful decisions, often in real-time.
It’s quick, cost-effective, and efficient. Those are three pretty big benefits right there.
Public sector leaders have an important role to play to ensure technology and digitisation permeate all government departments, fostering collaborative relationships that can effectively address complex challenges and drive greater success in tackling societal issues.
For example:
- Leaders must arrange training sessions so staff understand the role technology plays in innovation and how to optimise that role.
- Leaders emphasise the importance of innovative suppliers who can enhance operations.
- Support staff who start using innovative approaches to improve the efficiency of procurement processes and collaborate effectively with both internal teams and external stakeholders.
How The Act Drives Innovation
One of the biggest supporters is Innovate UK’s Small Business Research Initiative (SBRI), which is especially helpful regarding pre-commercial procurement and developing an effective innovation strategy. In fact, the SBRI has proven to increase growth rates by 30%.
The new Act is structured to drive innovation by:
- Focussing on outcomes that are tailored by contracting authorities according to their unique needs. Out-of-the-box thinking is necessary to meet these unique needs.
- Emphasis on collaboration with both internal and external stakeholders yields creative solutions with real-world applications.
- Collaboration provides deeper understanding of the challenges to innovation in the public sector and points the direction to potential solutions.
- Clearer rules make it easier to understand and take advantage of opportunities and processes as they are published.
- Contracting authorities must identify and remove barriers that prevent SMEs from participating in the market.
- Buyers must consider the practicality of dividing large contracts into smaller lots for SMEs to submit tenders.
Two Types Of Innovation
There are two broad types of innovation, both of which can benefit from innovative practices.
- Service innovation
- Product innovation
There is one major distinguishing difference.
- Service innovation is for intangible challenges, like digital security services.
- Product innovation is for tangible challenges, like department-sponsored iPads.
Both types of innovation must improve, simplify, or save time for buyers and public consumers as a whole.
Service innovation in the public sector can accompany product innovation (customer care after product purchase) but product innovation stands apart.
Both types are excellent for building customer satisfaction and brand loyalty through open innovation platforms that engage diverse problem solvers and enhance collaboration.
How the Procurement Act Will Drive Innovation in Public Sector Procurement
You’ve Waxed Innovation, Now What?
You’ve built a culture of innovation and have provided all the support your staff need to confidently voice their ideas and follow through with testing. What is the next step?
After all, you have to get it going on a large(er) scale. You need a public sector partner who understands and can appreciate your hard work.
You can find contracting authorities like that on S2G’s procurement platform. Simply register, choose the package that suits your needs, and you’ll find a treasure trove of public sector contracts just waiting for you to apply.