How to Modernise Procurement in Government: Digital Strategies for the Public Sector

Why Modernising Public Procurement Matters

Procurement is one of the largest areas of government spending, shaping how public funds are used and how services are delivered. Modernising procurement is no longer just about efficiency—it is about building trust, ensuring transparency, and driving public value.

The OECD’s Digital Transformation of Public Procurement Good Practice Report highlights how governments can use digital tools to make procurement more efficient, resilient, and user-centred. Combined with modern best practices from industry, governments now have a roadmap for creating procurement systems that are data-driven, agile, and fit for the future.

This article explores how to modernise procurement in government, drawing on OECD guidance and broader global experience.

Strategic Planning and Alignment with Government Goals

The first step in modernising procurement is to align it with broader policy and organisational objectives.

• Support wider government strategies: Procurement should not stand alone—it must directly support goals such as cost reduction, sustainability, innovation, or digital inclusion. For example, digital procurement platforms can help governments track and prioritise sustainable suppliers.

• Set a clear roadmap: The OECD stresses the need for strong governance and vision. Governments should establish a digital procurement strategy with measurable objectives and milestones.

• Audit existing processes: Before change, governments must identify bottlenecks and inefficiencies. A process audit gives a baseline for improvement and helps shape investment priorities.

By aligning procurement with wider objectives, governments ensure that modernisation delivers both operational efficiency and long-term policy outcomes.

Technology and Automation in Digital Procurement

Technology is at the heart of modern procurement transformation. The OECD report highlights three pillars—end-to-end lifecycle integration, emerging technologies, and robust data governance.

Key actions include:

• Build a unified tech stack: Governments often use fragmented systems. A single, integrated technology stack ensures data flows seamlessly across procurement, finance, and compliance systems.

• Adopt low-code/no-code tools: These tools allow procurement teams to automate tasks without relying on heavy IT support, increasing flexibility during disruptions.

• Automate routine processes: Tasks like purchase orders, invoice checks, and supplier onboarding can be automated, saving time and reducing errors.

• Centralise and integrate data: Consolidating procurement data improves visibility, compliance, and risk management. For example, OECD countries such as Korea and Estonia show how integrated platforms can streamline contract management and payments.

These steps reduce administrative burdens, improve compliance, and create opportunities for more strategic decision-making.

Process and Workflow Standardisation

Modernising procurement also requires consistent processes across government entities.

• Standardise workflows: Establishing common procurement rules and digital processes ensures efficiency and reduces risks.

• Enforce policies through digital tools: Embedding compliance checks and policy engines within procurement platforms ensures rules are applied consistently.

• Enable end-to-end lifecycle management: The OECD recommends viewing procurement as a connected chain from planning to payment, rather than isolated steps.

This approach improves transparency and ensures that procurement decisions are consistent across agencies.

People, Skills, and Collaboration

Technology alone cannot modernise procurement—people and collaboration are just as critical.

• Invest in talent: Procurement professionals need skills in digital tools, data analytics, and supplier engagement. Training and upskilling are essential for building digital capacity.

• Foster strong supplier relationships: Engaging suppliers early, using digital platforms for collaboration, and conducting regular audits strengthen trust and resilience.

• Promote cross-government collaboration: Procurement must work hand-in-hand with finance, IT, and policy teams. OECD guidance shows that breaking down silos is key to real transformation.

Governments that build digital capacity among their people will be better positioned to adopt AI, blockchain, and automation responsibly.

Measurement, Data, and Continuous Optimisation

Data is the foundation of digital procurement in government. Without reliable, standardised data, digital platforms and emerging technologies cannot reach their potential.

• Leverage analytics: Use data to monitor spending, evaluate supplier performance, and identify risks or opportunities.

• Set KPIs and track progress: Define success in measurable terms, such as cost savings, sustainability outcomes, or reduced cycle times.

• Promote transparency and accountability: Open procurement data improves public trust and supports external oversight.

• Continuous optimisation: Digital procurement should evolve with new technologies and user needs. The OECD stresses that user-centred design and ongoing improvement are vital for success.

Countries like Chile and Canada show how real-time platforms and open data portals can make procurement both more transparent and more competitive.

Recommendations for Governments

Drawing on the OECD good practice report and industry best practice, governments should:

1. Develop a clear, government-wide digital procurement strategy.

2. Invest in digital infrastructure and integrated platforms.

3. Prioritise skills development for procurement professionals.

4. Adopt emerging technologies responsibly, with clear governance.

5. Use data as a strategic asset to improve outcomes and transparency.

6. Engage suppliers and stakeholders in a collaborative way.

7. Continuously monitor, measure, and refine procurement systems.

Conclusion: Building a Smarter Procurement Future

Modernising procurement in government is about more than cost savings—it is about creating efficient, transparent, and resilient systems that serve citizens better.

By aligning with strategic goals, integrating technology, standardising processes, developing talent, and using data for continuous improvement, governments can unlock the full benefits of digital procurement.

The OECD Digital Transformation of Public Procurement Good Practice Report provides a strong framework, and when combined with broader best practices, it gives governments a clear pathway to success.

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