Investing in culture is key to transforming public service procurement

The key to modernizing procurement is investing in culture, creating a place where people are free to experiment and learn as they go.

In brief:

• Empowering your procurement team to shift from simply using digital tools to becoming digitally enabled can improve the employee experience and ramp up efficiency across the public service. 
• Modernizing ways of working to achieve those upside benefits requires a fundamental shift in your organization’s culture. 
• That foundational work is essential for any group looking to thrive in the digital era.

Traditionally based on manual and paper-based processes, procurement teams in the public service and beyond have a lot to gain from adopting digital tools. Moving in this direction gives procurement greater line of sight into the supplier network, current data to support better decisions and a much deeper understanding of how the function is performing overall.

Digital enablement can also improve work experiences, helping keep people with institutional knowledge and experience engaged in current roles. That’s critical in this volatile market, where some 38% of employees say they’ll consider switching roles in the next 12 months. As procurement seeks to become more digital, gaps in people’s skills and adaptability often surface. This lack of digital literacy — combined with hesitation to change — can hold back the integration of new technologies, leading to wasted investments and missed opportunities. That’s where culture comes into play.

Joint research from EY and the Oxford Saïd Business School has shown that 96% of transformation programs experience at least one “turning point” — a moment at which progress has or will go off track. The way organizations handle those turning points has a huge impact on results. In fact, navigating turning points by focusing on the people at the heart of the organization can double the likelihood that a transformation overperforms KPIs (1.9x) and speed (2.1x) of the entire program. Overall, the EY 2024 Work Reimagined Survey shows 40% of an organization’s health score links back to culture.

We see those numbers play out in practice across transformation programs, including procurement modernization initiatives. Successful modernization is not solely about technology. As with any change, people must have confidence in many factors if they’re going to adopt new digital tools and ways of working. Some are obvious: upskilling, reskilling, learning and development. Others are harder to spot, including the need for a psychologically safe environment in which people are encouraged to learn new skills, test their capabilities, ask honest questions and grow without fear of reprisal.

Thinking, acting and reacting differently to reshape culture is the first step to modernizing procurement practices in the public service. In this sense, organizational culture becomes the foundation to support broader digital transformation. 

As you invest in culture and roadmap your transformation more broadly, it will be important to build on people-focused momentum to address important practical next steps:

1. Assess current capabilities:
   Evaluate your organization’s existing talent and culture to identify gaps in skills and readiness for change. Procurement processes are evolving with modern technologies and digital tools, but the teams who deploy those processes aren’t always ready for new ways of working or the evolution into the new digital world.
   
   Digital tools also provide more insight into strategic sourcing, requiring more skill development around procurement categories. Understanding the current skills, capabilities and capacity of your workforce will allow you to properly plan, and prepare to adequately support, your people in evolving with new processes and tools.
   
   
2. Invest in upskilling:
   Implement training programs focused on digital literacy and procurement technologies to enhance public sector workforce capabilities. When planning and implementing modern procurement practices, it’s important to invest time and money in supporting your workforce. This investment builds their digital skills and helps them develop new and efficient procurement processes. This can promote a sense of inclusion and buy-in, allowing the workforce to more quickly adapt and adopt the modernized tools and practices.
   
   
3. Keep leadership engaged:
   Ensure leaders are actively involved in promoting a culture of continuous learning and innovation at every stage of transformation — right through the point when you’ve achieved that north star vision. 
   
   It’s not enough for leadership to demonstrate tone from the top only at the beginning of a program. Truly reshaping culture and modernizing procurement requires authentic and empathetic leadership both during the change and in the months and years that follow. This shift must be genuine if it’s going to succeed in unleashing the full potential of the combination of modern ways of working and digital procurement tools.