Presentation by Tato Urjumelashvili, Georgia (ENG) Second SIGMA Regional ENP East Conference on Public Procurement, Kyiv 29-30 May 2018

1. © OECD
SECOND SIGMA REGIONAL ENP EAST CONFERENCE ON PUBLIC
PROCUREMENT
The future of electronic procurement
Tato Urjumelashvili, eProcurement Expert, Georgia
Kyiv, Ukraine, 29-30 May 2018

2. Embedded problems of Public Procurement
(PP)
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This is individual
purchase
This is Public
Procurement
Most problems and challenges of public procurement
are caused by spending someone’s money
on someone else

3. Other “standard” PP problems
In addition to the major systemic
problem, highlighted by Friedman:
Laws, regulations and procedures
are too bureaucratic, complicated,
lengthy and vague;
Procurement is not a profession in
majority of (developing) countries;
(1/3 in OECD countries);
Vacuum of competence: corrupted
systems alienate competence;
Absence of agreed standards and
quality criterions;
Not enough analytics (unit prices,
quantities, etc.).
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OECD: are procurement officials recognized as a specific profession?

4. Traditional vs optimal resource distribution
during PP process
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— As is
— To be
needs identification
market survey/RFQ to
suppliers
tendering contract purchase order
receive &
pay
manage
&close
contract

5. Why should we spend the most valuable asset (time)
on the routine procedures, that can be automated?
Public Procurement is undergoing inevitable technological changes, eProcurement
systems are emerging in many countries, including Eastern European and post Soviet
countries.
Two major trends for PP systems development
•semi-automated competitive tendering procedures - for bespoke procurement
objects, using standardized tender documents and specifications;
• fully automated eCatalogues - for FAs and small value procurement.
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6. Hybrid systems for
bespoke
procurement
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7. Traditional mono PP systems
• Procurement system of the
country is (could be) highly
competitive and profitable
function;
• It is not fair and wise to
monopolize this function
neither by the government
agency nor by a single
private provider.
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Single provider/
administrator

8. Future is here: hybrid PP systems
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• Hybrid architecture modular
systems based on micro
services: different modules can
be grouped in a free forms;
• Collaboration & integration with
other systems;
• PPP - Golden triangle of
partnership;
• Everyone sees everything;
Open and accurate data
(OCDS);
• More efficient public oversight

9. Why should we spend the most valuable asset (time)
on the routine job, that can be standardised?
Everything possible to
be standardized should
and will be
standardized to save
time and minimize
administrative burden
both for procuring
entities and bidders:
• rules/procedures;
• tender documents;
• technical specs;
• contracts;
• data (OCDS)
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Prozorro TechSpecs Generator

10. eCatalogues
for standardised,
off-the-shelf procurement
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11. eCatalogues - center of PP system
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eCatalogue
Contracts
Open
Tenders
TechSpecs
Direct
Contracts
FAs
Payments Data&Analytics
Reverse
Auction
Price
Quotation
Restricted
Tenders

12. Maximum automation and simplification for
catalogable items
• Traditional PP procedures for standard items should disappear as they
become fully automatic;
• Almost everything, produced on the industrial level can be standardised
and procured through eCatalogues: small purchases and FAs
(aggregated procurement);
• Time, previously spent on procurement of standard items will be released
for other important tasks, like tendering of strategic and bespoke items
The main question and challenge is whether the state should
develop and maintain its own catalogue or create the
aggregator of commercial catalogues?
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13. Future of PP eCatalogs
Maintenance and update of
eCatalogues is quite costly.
Instead of competing with
commercial catalogues, it would
be to collaborate with them
through aggregator of commercial
catalogues (like Amazon)
Amazonization of PP is inevitable
- following the famous proverb
about Mohamed and mountain…
…if we don’t go to Amazon,
Amazon will come to us
This looks to be the matter of the
years, not the decades
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14. Voice search and orders to get procurement done
• Voice search and orders (e.g. Amazon Alexa, Google Assistant);
• Google says 20 percent of mobile queries are voice searches
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https://www.recode.net/2016/6/1/11829844/mary-meeker-voice-image-searches-2020

15. ePayments
The traditional checkout form is going to be less and less used in the future.
Thanks to mobile payment applications, like Google Pay, Apple Pay,
Samsung Pay, PayPal and others — process of payment is extremely
simplified - we just click ‘buy’ and the rest will be done automatically.
Other option, especially in case of
budgetary organizations - kind of
digital wallets, using the principle -
deliver to pay, instead of pay to
deliver
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16. Future of PP officers
• CPBs; Strategic functions;
• Professionalization; Less staff; More motivation; Performance-
related pay ;
• Categorization (focus on bespoke goods, services and works);
• SRM in supply categories that are important and critical for
procuring entities;
• Switch from public procurement mindset to just procurement;
Outsourcing.
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17. The future is open: OCDS
Best example so far: Prozorro and its BI. API is
must.
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_

18. Other major trends
for future PP
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19. • Use of blockchain to create the systems, track products, transactions
and suppliers; AliBaba is using Blockchain to track the origin of products
https://www.coindesk.com/alibaba-advances-blockchain-food-fraud-
platform-to-pilot-phase/
• Cloud-based technologies; SaaS popularity increases;
• Integration with other electronic (government and commercial) services;
• Wider use of machine learning and artificial intelligence (AI);
• AR & VR (e.g. virtual tour to eCatalogue or fitting products to the
interior)
• Smartphone as the main purchasing tool, desktop - secondary (only for
bespoke procurement);
• Image search - products and technical specs;
• Chat bots (e.g.telegram channel in prozorro to check companies’
status);
• Faster delivery, up to the same-day delivery;
• More use of reviews/feedbacks, like in Amazon or eBay.
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20. Lessons for the future from Prozorro
Prozorro lessons can help the current PP reforms to be implemented faster and smoother.
• Get relevant champions of the project. Implementing team champions (MEDT&Civil activists), as
well as user champions (such as Ministry of Defence and Metro) are essential to success;
• Keep the system transparent. Everyone sees everything - main principle;
• Keep the system simple. Simplicity is power. Not all users are proficient in public procurement and/or
IT systems;
• Start with micro value procedures. Micro value procedures are a good place to start with simple
things to mitigate resistance to change;
• Communicate through relevant channels. Extensive use of social media, especially Facebook, to
keep momentum high and communicate the achievements and setbacks;
• Allocate budget for training / capacity building. Vacuum of competence issue;
• Use an agile approach (scrum). Helps to deliver working versions of the system in a short period of
time, achieve quick-wins and early adoption from day one both in IT and non-IT directions.
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მადლობა
tato@todoclub.global
tato@ppi-ebrd-uncitral.com