Government organisations and private sector businesses experienced the pandemic very differently

Public sector procurement teams were tasked with introducing stimulus into the economy rather than reducing cost as was the case in the private sector. How long is this going to last?

We surveyed 46 public sector procurement functions in 2020 to understand how the COVID-19 crisis impacted procurement teams in Australia.

The task: Delivering social outcomes

Governments across Australia understand their role in delivering social outcomes through procurement. While their procurement teams initially shifted to a focus on supply risk reduction (think securing medical supplies, additional cleaning in public transport and hotel quarantine security guards), the focus in September 2020 was more on delivering stimulus to the economy, which is expected to be the case in 2021. However, government buyers also indicated that cost reduction will feature heavily in 2021 with 21% of respondents also naming costs as their equal first priority.

Increasing challenge: Decision making

Decision making in public sector organisations has quickly become the second biggest challenge. In April, supply was the biggest struggle for 56% of public sector procurement teams. This reduced significantly to 17% by September. Conversely, operational challenges came to the fore, escalating dramatically. For government, operational concerns associated with working in a virtual environment were already significant in April (28%) and escalated to 52% by September 2020.

 

 

Government entities also saw a large increase in challenges associated with decision making. This included delays associated with government budgets being deferred well into Spring 2020. Further uncertainty was introduced into public sector organisations from a requirement to balance competing demands e.g. social benefits, stimulus and cost reduction. The dilemma of making decisions quickly and in an uncertain environment is reflected in a quote from one of the participants who works in a large department in the Queensland Government:

“Dealing with uncertainty and risk, everything changes very quickly and we need to react swiftly, which is not always very easy being a government organisation with lots of internal bureaucracy involved in decision making”

To read more about the impacts of COVID-19 on Australia’s procurement teams, download our ebook below.