We recently launched our new research report which looks at the recent EU eProcurement related directive – Implementing the eProcurement Mandate – Technology Choices and Key Decision Factors”. You can download it here, free on registration, and it is sponsored by Vortal, the leading public sector software provider.
In it we look at the new EU Regulations covering the use of eProcurement. All contracting authorities must put in place systems to allow advertising of opportunities, communication and exchange of documents electronically (as a minimum).
For some organisations, the choice will be whether to buy a proprietary system from an established software firm, or to build their own system. that could be done purely by internal resources, although that seems unlikely that most public organisations would have that sort of skilled resource. So more often, building a bespoke system mean engaging a consultant or software development firm to lead on that activity.
The Spend Matters advice, based on many years of working in procurement and with procurement technology, is very definitely to buy an existing system. Indeed, it is hard to imagine when building your own would be the right solution.
We cover all the reasons why this is the case in the Paper, but here are just a few.
- Delivery risk: there is a proven market of successful and competent software firms around Europe and beyond that provide this sort of product. Any bespoke software development carries the element of risk that does not apply for existing providers and products.
- Cost: an existing solution will have transparent and known costs. A competitive process should be used to source the technology, driving value for money. Building a new system can and often does lead to large and virtually open-ended costs, as the buyer is often hit by cost overruns, unexpected add-ons, and so on.
- Future-proofing: an-off-the shelf solution from a reputable provider will be virtually “future-proof.” Providers will pick up on new EU regulations and other new requirements, with an automatic upgrade path with costs defrayed across multiple users. An in-house developed system has unknown and almost limitless potential costs for upgrades and changes.
- Flexibility and expertise: internal solutions are also likely to be inflexible in terms of staff – there is no pool of experts already available with experience of using the solution. That pool certainly exists for the more successful off-the-shelf solutions.
So why is it that some organisations, and even some regional or national governments, have gone down the track of developing their own system? They may in some cases genuinely think they can obtain more functionality that way, but there is no evidence we have seen of that being proved to be the case once the system is finally built.
More often, an internally developed system is a ‘vanity project’ in our opinion. That may be a harsh comment, but we have seen such projects created to justify the jobs of IT people, for several years in all likelihood, or to give the procurement director something to boast about at conferences! They are not good business reasons for ignoring the available and ready market – there are many proven suppliers, with good products. Those systems will satisfy the needs of public organisations who need to invest in order to be compliant with the new EU Directives.
And do download the whole paper here for more insight and advice.