Procurement does more than just sourcing out the best resources for a business and ensuring they have the best deals and quality materials. It also ensures your drivers have the best routes, best delivery deals and ensures your resources get stocked up even when everyone else’s stock is running low. Pretty simply put – it helps a business to stay running and continuously make profit.
It is pretty obvious what a good procurement process can do for a business but how can procurement actually help the governments? Well, it can help with a lot of things and we have decided to list them down for you:
It helps the government save money
Well, a government needs to make money and save money too. Sure they mostly get the money from taxpayers and other businesses but all these earnings goes back to the people. For example, they build better roads, hospitals, schools and public transportation for their own people.
Most of these projects cost millions of dollars and most times they don’t give the government enough profit to cover the cost – like public schools and parks for example. So in order to still give their people the best commodities, they need to be smart with their spending – ensuring they still get the best resources without over-spending.
This is where procurement comes in. In most countries if not all, procuring for governments are typically heavily regulated – for a very good reason and they are mostly highly competitive which in return helps the government save money so that they can use more money elsewhere.
It helps the government to help local businesses
It is true that procurement in government is heavily regulated and it’s mostly for a good cause. Most countries do so in order to help their local businesses, particularly SMEs and when a government can help local businesses to grow, they are loved by their people. Well, they are but in giving the procurement contract to local businesses, they are also helping businesses grow and the tax paid from these businesses will be circled back to help the government create bigger and better commodities for their people.
However, new businesses pop up like mushrooms and as much as governments are usually prone on supporting their local SMEs, they also have to take into considerations things like cost and quality. With a good procurement team, the process is more likely to become more efficient.
It helps the government build better commodities for people
Everything eventually comes down to one thing – providing a better life for the people. While different countries have different needs, the government essentially builds more needs for the better welfare of their people. Countries like Malaysia builds more subsidised apartments for their welfare people and countries like Australia focuses on providing free healthcare for their people. Some countries might choose to build more parks while some focuses on getting more high-rise apartments to keep up with their birth rate.
In order to do so, they need procurement to help them source out the best materials, products and resources and a great deal so that they can deliver help to the people. Without it, the government will not only have a hard time trying to fulfil the need of their country without causing chaos they will probably not even succeed at doing a good job. There will probably be more abandoned buildings and incomplete projects as well as people going on a strike.
Sure, procurement is just one factor that might cause a country to break down but it is certainly a big one.
It helps the government produce the input
The government is essentially a group of people with wisdom and knowledge that group together to help the people of their country and while they hold the power to the governance, they don’t actually own or produce any inputs for goods. So in order to provide for the people, they need to first obtain it.
Sure, you can say that they have power over good that are produced under their governance like how Saudi Arabia has control over their oil, but what about goods that are not produced in the country? Like how Singapore obtains fresh water from Malaysia, America buying oils from Saudi Arabia and China buying iron ore from Australia?
In hindsight you might say it’s a business deal from one government to another but it is the procurement team that helps the governments make those decisions. Procurement team for the government will weigh out the demands for the goods, the price for the goods and how beneficial it will be for the nation.
Even if the good and services are available in the country, the governments will still most times need to seek help from other small businesses that can provide the goods and services they need.
ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.