How smart procurement improves outcomes and reduces costs

Posted on: September 3, 2018 by Albert Seubers

In my previous blog, I looked at how cities can take a broader, cross-departmental approach to achieve specific outcomes in a collaborative way. This starts with changing procurement processes to focus more on what needs to be achieved rather than on individual departments’ requests for proposals.

New business models

With a cross-departmental vision, the necessary approvals and possibly policy changes, city services can be procured at lower cost. What’s more, cost savings can be shared between departments and services, even to attract external revenues both for the city and for its service providers. This drives ongoing optimization, efficiency and responsiveness of services and partners. It will also attract interest from service providers based on a business model that doesn’t require any major investment by the city.

Let’s imagine a city that is preparing to procure a few service renewals. This city is facing a backlog of requirements for infrastructure maintenance due to budget constraints and the impact of severe weather conditions. These weather patterns are repeating on an annual basis, so a more resilient infrastructure solution is needed.

This city is also dealing with an increase in commute times. Roadworks to increase capacity for traffic are ongoing, disrupting traffic-flow. Of course, the city is working hard to present itself as attractive to investors. Those investors, however, are selecting cities that offer healthy living conditions with lower commute times and so on.

Joint procurement processes

In response to these challenges, the city’s departments decide to start collaborating on joint procurement. Instead of a narrow focus on repairs and renewal of the infrastructure (with individual projects to maintain or replace bus shelters, street lights, traffic lights and so on), they take a more holistic view. They develop requests for proposals from service providers to collaborate to lower emissions, reduce commute times, save on operational costs, and create a city that’s more attractive to investors. Adding an option that allows for partners and suppliers to generate external revenues makes requests for proposals even more appealing to potential providers.

The city receives tenders from collaborative service providers who propose innovative, forward-looking responses and solutions. There is cost optimization through combining services and creating configurations of services that can be replicated. For example, bus shelters can be used to offer services and experiences that attract and increase the numbers of passengers. These shelters are the connection point to multiple modes of transport and are attractive to providers of services such as shared bikes and other shared transport. In addition, locations like this are ideal for installing digital displays to present information on transport services, general city messaging and so on. They are also perfect for advertisements to generate revenue for the city.

In my next blog, I’ll look in more detail at how these elements of infrastructure can be configured to work in smart ways.

Learn more in Look Out 2020+ for Government ‘Realizing the promise of Government as-a-platform’ where we explore the business opportunities and key technologies which will shape the future of Public Services.

Meanwhile, watch this video on traffic management to get an idea of what one single system can do for your city.

Share this blog article

About Albert Seubers
Director Global Strategy IT in Cities and member of the Scientific Community
Albert H Seubers (1959) graduated at Agricultural University Wageningen in 1985. Ever since he worked in IT consultancy focused on governmental topics. He worked for Dutch Telecom implementing the first fiber networks in Netherlands, for CMG as director in the Public Sector Service group, for HP as Public Sector executive before he joined Atos. Since 2011 he is Director Global Strategy IT in Cities for Atos. The Atos MyCity program focusses on the virtuous circle of managing a city on all aspects as safety, citizen services, employment, education, social and health care, transport and traffic, sustainability and governance and economics. Engaging citizens and business communities to create and maintain a sustainable, safe and prosperous city is the key message in Atos MyCity. In his role he works with cities all over the world to help them define their strategy often referred to as a Smart City Strategy or find solutions to support their strategy. Albert is a strong believer in the fact that data is enabler for successfully creating the city of the future.

Follow or contact Albert