Delivering on public sector buying needs

In every industry, procurement presents its own set of challenges. Public sector purchasing, though, occupies a space all its own.

“With limited funds for investment, procurement often lacks even the most basic pieces of technology. So by and large, public sector businesses are not participating in the digital revolution that’s taking place,” says Joanna Martinez, founder of Supply Chain Advisors, LLC. “Public sector businesses tend to have complex purchasing procedures that must be followed by law. It’s difficult to introduce innovation that deviates from what’s in the manual.”

The City of Miami is one of many governmental bodies trying to shift that paradigm, by accelerating its digital transformation efforts and streamlining its purchasing processes. Miami is using its $250 million of purchasing power to help fuel an economic recovery. By partnering with Amazon Business, a division of Amazon serving businesses and organizations, to reshape the city’s purchasing strategy, city departments have the ability to search and purchase goods from local suppliers.

“The scale and size of our city allows us to act as a stimulator,” says Mayor Francis Suarez. “We have the opportunity to focus on purchasing from small and local businesses.” He also believes working with Amazon Business will streamline processes and make city purchasing more efficient, which is critical at a time when budgets are strained.

Efficient purchasing environments must remove obstacles between buyers and sellers. In government purchasing, that can be difficult, due to regulatory restrictions imposed on public entities in an effort to ensure a fair, ethical process. Amazon Business enables public purchasing to meet standards of transparency and quality control, while delivering a familiar self-service buying experience. “Having a company like Amazon Business, with the resources and capabilities that it has, represents a major improvement. It can act as a sort of verifier,” Suarez says.

Other government bodies have found Amazon Business to be a vital part of efforts to quantify purchasing behaviors with actionable data. The State of Connecticut’s Department of Administrative Services procurement division executes over 1,000 contracts with more than 2,500 suppliers, valued at nearly $6 billion. But there were significant gaps, opening the door to inefficient or wasteful spending. “We didn’t have a good handle on our non-contract spend, the things agencies were procuring that weren’t on state contracts,” says Carol Wilson, director of procurement. “We had some reports, but they were vague and non-descriptive. We didn’t get the detail we needed.”

Moving purchasing to Amazon Business provided the state with the “tools to see how many agencies were using it, what they were buying, and how they were paying for things. And we’re able to talk more intelligently about planning, future needs, and strategic needs,” she says.

“The data analytics and the reporting tools they have are going to be critical in us analyzing spend, analyzing agency needs, and planning for the future,” she says. “It adds value to our state budget officers in terms of categories of spend, what we’re spending, and identifying areas where we need to reduce costs or where there’s redundant spend or unnecessary spend. So all of those tools help us find the areas to improve economic savings just through having the data in front of us that we didn’t have before.”

Features like deducting taxes automatically optimized the purchasing process, she says, helping state employees focus on more added-value tasks and the execution of goals in purchasing, whether around directing spend to small, local, or minority-owned businesses—or simply seeking the best value for Connecticut taxpayers.

“I think we’re going to see savings and more efficiencies. We may be able to reduce our contract load and focus on more value-added procurement contracts and use Amazon Business as a tool to direct agencies to those products,” Wilson says.

Amazon Business also helps sellers reach customers in the public sector, access that historically can be difficult and is particularly important for businesses searching for new sources of revenue. Anne Rung, formerly administrator, Office of Federal Procurement Policy during the Obama administration, and now director, public sector, at Amazon Business, says the ability to cut through obstacles preventing sellers from working with public buyers is critical. “It’s hard for small businesses to sell to public sector customers. There’s often a very cumbersome process to become certified, to become registered with the public sector, and to market themselves,” she notes.

Mayor Suarez agrees. “Governments are not that easy to interact with,” he says. “Amazon Business acts as a bridge for businesses, as opposed to them going directly to the government, which can be unwieldy, complex, and mystifying.”

The ability for both sides to navigate a complex system of local, state, and federal regulations offers tremendous benefits in cost savings and time for both public sector buyers and the sellers targeting them. With Amazon Business, tools like automatic tax exemptions and Guided Buying steer buyers to sellers that satisfy requirements around diversity or certified small business purchases, further simplifying procurement processes.

A dose of understanding helps too. “A good place to start is with empathy,” Rung says. “Governments have unique requirements and challenges, such as diminishing budgets, socioeconomic goals, and/or spending threshold. Customers like to know that you understand those requirements and challenges and have an ability to speak their language.”