Government Procurement Agencies (GPAs) in the GCC can cut public spending by to up to half, says Oliver Wyman, a global management consulting firm and a business of Marsh McLennan. 

 

Worldwide, government procurement accounts for around $13 trillion in spending, thus presenting broad opportunities for savings where efficiencies can be realised, as all governments can leverage GPAs in some shape or form to optimise public sourcing. 

 

Oliver Wyman has mapped government efficiency through a Public Procurement Performance Index (PPPI), identifying that countries with a pressing need for optimisation could save up to 25% in the short-term by deploying a dedicated task force to review procurement contracts. 

 

Holistic thinking

Meanwhile, sustainable savings require a strategic and holistic rethinking and a centralisation of the procurement function. This operating model could then lead to an additional 25% in potential savings.

 

“Gulf governments, like those around the world, are under increasing pressure to deliver more to their citizens, and with less. We believe one way to unlock value is to increase the efficiency of the procurement function. And, by unlocking value for the broader public, these efforts will enhance trust in the government’s actions and decisions,” says André Martins, Head of Transportation, Services and Operations at management consultancy Oliver Wyman in India, the Middle East, and Africa.

 

Revamping a government’s approach to sourcing products, services, and goods and embarking on the journey toward procurement efficiency, says the report, requires endorsement by all decision-making stakeholders and cooperation between both the public and the private sector. Short-term remedies can alleviate immediate cost pressures, but long-term sustainability and further savings requires a policy and operating model transformation.

 

Oliver Wyman says that the government procurement agency transformational process to optimise spending usually takes between three to six years, depending upon how centralised its processes are.--TradeArabia News Service