Digitizing public procurement:
Building better, data-driven processes and systems
Why it matters
A user-friendly, digital way of transacting with businesses for public procurement – a so-called e-GP system – can be economically transformational. It can save governments and businesses billions of dollars in transaction costs while improving competition, economic inclusion (especially for small businesses) and public integrity.
Indeed, a full e-GP system is a top 10 investment for a country to achieve the UN Sustainable Development Goals, according to the Copenhagen Consensus Centre (2023). Their study suggests that for an average low-income economy, the benefit-cost ratio for an e-GP system is 8 to 58. The ratio rises from 142 to 473 for a lower middle-income economy.
Yet, one third of countries don’t have any e-GP system in place, according to a 2022 UN survey. Among the two-thirds that do, the system is often limited to advertising and responding to tender opportunities, as opposed to a more comprehensive transactional system to plan, manage and transact around public contracts.
A World Bank study in 2021 came to a similar conclusion. Out of 10 common steps in public procurement for roadbuilding (like contract signature), the average public buyer can do only 3.8 steps electronically. As the authors concluded: “on average, countries are publishing public procurement information online (although not all the key documents), but systems have not yet transitioned to a transactional e-procurement management system […] There is plenty of room to improve in e-procurement.”
A successful e-GP project needs well-defined goals, user-centered teams and a clear change management process.
Unfortunately, these factors are often lacking in the procurement of e-GP solutions. Ironically, slow, old-school paper-based procurement processes themselves often hinder effective procurement of e-GP solutions. Compliance often overshadows user needs. Stakeholder engagement remains inadequate. Essential factors like rethinking business processes and data use get overlooked. There are often regulatory obstacles and under-investment in training, support and change management. Long term sustainability including the maintenance and upgrade of the system is also vital. Read our lessons learned from e-GP projects in 5 African countries for more on these challenges and how to overcome them.
We can help you with:
e-GP readiness and change management
We provide expert guidance and technical assistance spanning the entire e-GP lifecycle, ensuring a smooth and successful transition to digital. We assess legal frameworks and IT infrastructure, then develop tailored plans to address potential challenges and promote user adoption. We drive demand for better data and digital processes, developing an enabling environment for digital transformation.
Service design and user research
We support the design of electronic procurement systems by facilitating structured collaborations with stakeholders. We follow user-centered design methods to map processes, understand needs, identify bottlenecks, and tailor solutions to specific contexts more effectively.
Data and analytics
We help ensure e-GP projects produce rich data for insights. Our implementation support covers data architecture, modeling and standardization; defining functional and data requirements; and supporting analysis and monitoring with training, methodologies and tools – including business intelligence.
Knowledge sharing and peer learning
We can connect you to peers who have led on e-GP and digital transformation projects in your region and across the world.
Ongoing projects
OCP is partnering with the State of Nuevo León to develop the functional requirements of a new end-to-end e-GP system and establish a roadmap for its implementation. We are currently working hand-in-hand with the state’s administration to diagnose weaknesses by mapping existing business processes and pinpointing areas like limited data availability, outdated catalogs, and communication gaps. We will leverage these insights and the Open Contracting Data Standard to develop a new system that is open by design, streamlines processes, and has the potential to serve as a national model for efficient public procurement.
OCP is supporting Chile’s national procurement agency (ChileCompra) in implementing the country’s new procurement law. This legislation expands e-GP system coverage to include additional entities, methods, and procurement stages, all while mandating public accessibility in open data format. Our technical support ensures that open contracting principles are seamlessly integrated into the system’s new modules, aligning with mandates such as conflict of interests regulation and small business inclusion.
As part of its 2021 new procurement law, Brazil’s Federal Government released a new National Public Procurement Portal (PNCP). The portal aims to collect and disclose information about all levels of government and all stages of the procurement process. Through its Lift Impact Program, OCP partnered with civil society and government actors to enhance the usability and data quality of the portal, while using the data to improve health expenditures.
In Colombia OCP helped local governments in nine Colombian departments to rapidly adopt the country’s transactional e-GP system (SECOP 2). From 2018 to 2022, e-GP usage skyrocketed from 15% to 94.5% in target regions compared to the national average of 23%. By promoting open contracting principles, OCP empowered governments to leverage e-GP data for better decision-making. This shift towards digitization and transparency increased competition in procurement processes, with the number of bidders rising 46% in target regions.
Resources and reading
The Seven Deadly Sins of Procurement Digitization (and some practical suggestions on how to avoid them)
Fulfilling the promise of e-procurement reforms in Africa. Lessons from five countries.
What data should I collect? A guide to prioritizing data fields in an e-GP implementation
Guide to Defining OCDS Functional Requirements for e-Government Procurement Systems
Public procurement is in urgent need for reform. This new report provides insights and guidance on how countries have cemented open contracting approaches into their legislation modernizing public procurement, supporting reforms that put transparency, efficiency, and equity at its core.
Further resources
- The investment case for e-procurement. A Cost-Benefit Analysis. Cambridge University Press
- Electronic Government Procurement (e-GP) Readiness Self Assessment. African Development Bank, Inter-American Development Bank, World Bank Group
- OECD MAPS e-GP module. It includes a strong component on OCDS and open data
- OECD Podcast. Why digitalising procurement systems is the way forward
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