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In the spirit of our company’s mission, to empower every person and every organisation on the planet to achieve more, Microsoft’s Worldwide Public Sector team is working with government customers around the globe with their digital transformation procurement requirements. We have trusted experience dealing with an array of national and supra-national procurement laws, policies, and practices, and have assisted public sector customers through engagement, to harness the power of innovative and scalable cloud technologies to meet their evolving requirements, while safeguarding principles such as efficiency, fairness and integrity. From this engagement we have gained valuable insights on developing public sector procurement best practice.

Since we published Building Blocks for a Successful Digital Transformation Strategy in 2022, we have been looking in detail at some of the friction-points in procurement policies and practices, which may prevent governments from fully embracing the benefits of the latest and most innovative technologies. We have heard from several governments that they both want, and need, to modernise their approach to technology procurement and to mitigate the risk of the public sector falling behind in the benefits made possible through digital transformation. We see a big part of our role as working together with public sector stakeholders, offering our insight and ideas on effective technology procurement, to ensure that acquired solutions continue to match real-world requirements.

Public Sector Procurement Fit for the Digital Age: Flexible, Collaborative and Outcomes-Focused is a discussion on the principles (both current and prospective) that underpin successful public sector procurement. Interestingly these principles are in line with principles identified by the OECD concerning government digital transformation and public procurement, especially in relation to agile digital technology procurement and investments in government digital technology projects and services.

 A more flexible and collaborative approach to procurement creates a win-win for both public sector customers and the citizens they serve. 

In the paper, we set out our reflections on current procurement pain-points and importantly, our recommendations on “ways forward” that can best enable governments around the world to more easily procure the digital transformation technologies that are so essential for their future success. Some of the key recommendations set out in the paper include:

• There are significant benefits in taking an expansive, forward-looking, principles-based approach to procurement, including incorporating established and necessary principles such as integrity, accountability, efficiency, scalability and transparency – but recognising that innovation and sustainability are also important principles in driving forward a successful digital strategy.
• There is a need to acknowledge that adherence to legacy contractual terms more suited to traditional outsourcing or acquisitions of hardware or on-premise software can stifle innovation.
• A flexible approach to procurement need not mean a risky approach, rather flexibility can result in better products, solutions, and outcomes for all concerned.
• Flexible framework agreements (which anticipate the inclusion of necessary vendor terms), are powerful procurement tools, especially when reinforced by the issuance of practical guidance as to how framework agreements are operationalised in the context of government digital transformation, enabling governments to “contract once, procure continually”.
• Taking a whole-of-government approach to procurement maximises efficiencies and helps achieve scale.
• Embracing flexible financing rules that better balance capital and operational expenditure issues and enable governments to make multi-year commitments are essential.
• To achieve much of this, there is often a need to update legacy policies, including policies in respect of the classification and security of data, to align with modern privacy and security controls and features of cloud technologies.
• Regular dialogue between procurement agencies and technology providers enhances the understanding of the technology and builds trust.

The journey to digital transformation is a constantly evolving one, punctuated by pivots and altered by individual national responses to an ever-changing global policy climate. A more flexible and collaborative approach to procurement creates a win-win for both public sector customers and the citizens they serve. That is why continued dialogue and collaboration with industry is so very important. We look forward to continuing the digital transformation procurement conversation with the public sector community in the months and years to come.