This chapter provides a high-level roadmap for digital transformation, outlining the steps and considerations for implementing an effective and sustainable digital procurement strategy. The first section presents key implementation principles, emphasising foundational guidelines and best practices. The second section focuses on identifying potential quick wins and pilot initiatives, highlighting opportunities for early successes that can build momentum and demonstrate the benefits of digital transformation. The final section explores the future of eTenders, discussing potential approaches to the development of Ireland’s national e-procurement platform.
The Way Forward for Digital Public Procurement in Ireland
Guidance for Strategy Development
Abstract
This section sets out proposed principles to guide the digital transformation of public procurement in Ireland. Key principles provide a link between high-level digital transformation objectives and the selection and delivery of individual digital projects and initiatives. As key considerations for decisions around investment and implementation, they can help to ensure a common, coherent approach to issues such as data, interoperability, or emerging technologies.
The OECD Recommendation of the Council on Digital Government Strategies and the associated Digital Government Policy Framework and E-Leaders Handbook on the Governance of Digital Government provide a framework to guide the development and implementation of digital strategies. This section applies and adapts key aspects of this framework to the digital transformation of public procurement in Ireland.
Source: Authors’ elaboration
4.1.1. Digital by design
Digital by design refers to the capacity to govern and leverage digital technologies to rethink and re-engineer public processes, simplify procedures, and create new channels of communication and engagement with public stakeholders (OECD, 2020[1]). A government that is digital by design establishes clear organisational leadership, paired with effective co-ordination and enforcement mechanisms where “digital” is considered not only as a technical topic, but as a mandatory transformative element to be embedded throughout policy processes.
The digital by design principle can guide the digital transformation of public procurement in Ireland by emphasising the development and review of policy and processes with digital in mind. Embedding digital from the start when introducing new policy initiatives or revising existing processes can reduce complexity and ensure that digital transformation address real-world needs. As outlined in Chapter 3, this approach will require strong linkages and coordination across OGP and between OGP and other parts of government with policy responsibilities impacting public procurement.
4.1.2. User-centric
User-centric refers to the capacity to accord a central role to people’s needs and convenience in the shaping of processes, services and policies and to adopt inclusive mechanisms that enable this to happen. User needs should form the basis of the design and delivery of digital services and be engaged by default (OECD, 2020[1]). To digitally transform public procurement, contracting authorities, economic operators, and other stakeholders should be engaged and involved from the beginning, allowing design to reflect their views, needs and aspirations. Design and delivery should include consistent approaches to early sharing, testing and evaluation with users to allow for adjustment and the successful scaling of projects (OECD, 2014[2]). Regularly testing the tools under development and putting in place continuous feedback loops can help deliver on users’ needs and preferences (OECD, 2022[3]).
In public procurement, the wide variety of users requires special attention to a user-driven approach. Ireland has over 8,000 contracting authorities and relatively high rates of SME participation in both contracts won (67%) and bids (74%) (European Commission, 2023[4]). Mechanisms for involving them in design and ensuring that their diverse needs are met will need to be carefully considered. It will be necessary to engage with representative bodies and across different venues to ensure the right feedback loops are in place. Implementation of the strategy should also recognise that the nature of the Irish public procurement system means that not all contracting authorities and economic operators will have a high level of digital maturity.
Digital transformation does not necessarily imply delivery only through digital channels (OECD, 2020[1]). Through the mandatory implementation of eTenders, Ireland has already made significant strides towards digital processes, and contracting authorities and economic operators are generally comfortable with digital procurement. However, Ireland will still need to make choices about the extent to which it allows paper-based or off-line processes to co-exist alongside online services in public procurement. Some stakeholders may not have access to digital infrastructure or the technical expertise for additional online processes, while others may simply prefer traditional methods due to habit or lack of trust in digital platforms and tools. Transitional support and training for contracting authorities and economic operators are essential to ensure a smooth and inclusive digital transformation.
4.1.3. The strategic governance of procurement data
Decisions about how data are collected, shared and used will be critical to the success of the digital transformation strategy. Data governance frameworks establish policies and practices for managing data, promoting transparency and compliance with regulatory requirements, and will be a necessary condition to ensure the quality and interoperability of procurement data (OECD, 2019[5]). Although OGP is also a developing a procurement strategy which will include a pillar on data, the implementation of the digital transformation strategy should consider how data can be used in the following ways (OECD, 2020[1]):
Anticipation and planning: using data in the design of policies, the planning of interventions, the anticipation of possible change and the forecasting of needs.
Delivery: using data to inform and improve policy implementation, the responsiveness of governments and the provision of public services.
Evaluation and monitoring: using data to measure impact and monitor performance.
Close integration with the national public procurement strategy will be crucial to ensure that common data standards and structures in procurement and across government can be leveraged to ensure effective digital transformation. Box 4.1 provides an example from Norway of the integration between data and digital initiatives. To promote greater transparency in procurement, investments should also be built around the principle of ‘open by default’, the capacity to make government data available to the public, within the limits of existing legislation and in balance with national and public interest. Open by default approaches include provisions on open government data, API use, and open source (OECD, 2020[1]).
Ireland has established frameworks and bodies responsible for overseeing data governance across sectors. Leveraging these structures could be an effective means of improving the management and use of procurement data and of enabling interoperability with broader government data sources. For example, the Data Governance Board’s Data Architecture & Technical Committee is identifying where and how the standardisation of technical architecture can be implemented in the public sector. This includes the development of an API Catalogue, which will assist in the discovery of reusable data by public bodies by reducing the administrative burden on public bodies having to recollect data again from citizens and businesses (Department of Public Expenditure, NDP Delivery and Reform, 2023[6]).
Challenges in sharing and accessing data can reflect cultural and inter-institutional dynamics as much as legal and regulatory provisions. The working level bodies outlined in Chapter 3 could play a key role as a mechanism for exchanging insights and feedback with data owners, whether they are CPBs or contracting authorities.
In 2018, Norway embarked on a comprehensive initiative to digitise its public procurement system, known as the Programme for Digital Procurement. The Programme ran until 2024 with direct implementation costs initially estimated at NOK 91 million (approximately EUR 7.5 million) and estimated benefits of NOK 3.6 billion (approximately EUR 310 million).
A key component of this transformation is the mandatory implementation of eInvoicing across public sector entities to ensure that data on all transactions between suppliers and contracting authorities is captured. Norway’s implementation of mandatory eInvoicing is based on the Pan-European Public Procurement On-Line (PEPPOL) system, which provides a set of common business processes and technical standards that can be used to link e-procurement platforms. Mandatory eInvoicing has reduced the administrative workload for contracting authorities by around 10 minutes per invoice, which, due to the high volume of invoices, adds up to significant savings.
More recently, Norway's participation in the Big Data Test Infrastructure (BDTI) e-Procurement Pilot, in collaboration with Italy and Portugal, represents the country’s forward-thinking approach to harnessing procurement data for enhanced analytics and decision-making. This initiative is part of the broader EU Public Procurement Data Strategy, aiming to harmonise data sources for greater reuse and analysis.
4.1.4. Interoperability between e-procurement platforms and tools
Given the scope and complexity of the public procurement landscape in Ireland, there is a risk that transformation may happen in piecemeal fashion rather than delivering at the scale, coherence and effectiveness required. Rather than approaching transformation on a sector-by-sector or platform-by-platform basis, the digital transformation should seek to create an interoperable digital ecosystem that lets sectoral CPBs and others focus on the unique needs of their users.
The implementation of the strategy should build the capacity to deploy a different tools and services as long as they maintain standard data formats and interoperability between platforms and tools. Under this model, different organisations can work on designing, implementing and operating the tools and services they deliver (either in-house, outsourced, or a hybrid of the two) (OECD, 2020[1]). By adopting this framework for data exchange, Ireland can overcome the current diversity of systems and formats used to store and manage data, which make it difficult to establish connections and interoperability. For example, common standards could specify inputs and outputs for each phase of the procurement cycle, without necessarily detailing specific IT solutions.
4.1.5. The use of emerging technologies
The use of emerging technologies in the public sector, including AI, holds the potential to increase government productivity and the responsiveness of public services, and to strengthen the accountability of public institutions, including in public procurement (OECD, 2024[10]). Decisions about the use of emerging technologies in public procurement should be guided by several key factors:
The application of technologies should align with the objectives of the digital transformation strategy and support progress towards the identified future state.
They should be implemented when they deliver clear value, rather than for their own sake. Potential benefits should be weighed against costs and risks.
Selected technologies should be scalable and adaptable for changing needs and should integrate with existing systems.
Emerging technologies may be good candidates for pilot testing, where controlled environments can help identify issues and gather feedback on effectiveness and areas for improvement.
Public procurement can benefit from broader frameworks and existing initiatives on these topics. As noted in Chapter 2, governance and coordination structures, such as the AI and Emerging Tech Network, and frameworks, such as Ireland’s Interim Guidelines for Use of AI, can be leveraged to manage the risks and challenges of implementing emerging technologies. This is particularly relevant to ensuring compliance with Irish and EU regulations, including on data protection and transparency.
Implementing and communicating quick wins and successful pilots is important to building momentum for a digital transformation strategy. They help to build trust and confidence in the system, showcasing that transformation is delivering value. When communicated effectively, successes which demonstrate tangible benefits, such as reduced administrative burdens, can encourage economic operators to engage with government procurement and attract businesses that may not have previously participated in public sector contracts. This section provides proposed criteria to support Ireland’s selection of quick wins. It also provides examples of potential quick wins and pilots.
4.2.1. Defining criteria for quick wins and pilot initiatives
Engagement with public procurement stakeholders revealed a large number of potential initiatives and areas to target as quick wins or pilots. Ireland will need to be selective and proceed with those initiatives that deliver the best return on investment, broadly defined. The following criteria are proposed to narrow the scope of potential quick wins and pilot initiatives:
Quick wins and pilots should be linking to the digital transformation strategy’s strategic objectives and contribute to achieving the desired end state.
Quick wins and pilots should be implementable in the short (1 year) to medium (2-3 years) term.
Quick wins and pilots should address a specific challenge or pain point for users, with a particular focus on contracting authorities and economic operators. This can help to build momentum and support for digital transformation.
4.2.2. Providing a list of potential quick wins and pilots
The following table provides a number of potential quick wins and pilot initiatives for further consideration and evaluation.
Source: Authors’ elaboration based on workshops with Irish stakeholders.
Over the course of the digital transformation strategy, Ireland will need to make decisions about the future of its national e-procurement platform. At this time, not enough information is available to adequately inform these decisions, but the digital transformation strategy could provide a roadmap to reach a decision. This includes clear timelines within the current platform contract to give the government sufficient time and flexibility to consider and make an informed decision.
e-procurement platforms can be implemented using different business models with varying degrees of outsourcing and government ownership of the platforms and the associated data. Single or multiple platforms may be used with diverse architecture, infrastructure, and service schemes. Regardless of how platforms are delivered, they should have a functioning and sustainable business model that allows them to deliver results over the long run. This requires consideration of factors such as the ownership of platforms and data, strategies to ensure the future development of platform(s) and to minimise vendor-lock, the ways in which the e-procurement ecosystem can adapt to changes in legislation/regulation, market practices and technology, and the sustainability of funding (Methodology for Assessing Procurement Systems, 2024[11]).
Table 4.2 outlines three models for implementing an e-procurement platform at national level. In practice, the distinction between buying and building a platform will not always be as clear as these model approaches. It is also important to recognise that the implementation and on-going support of an e-procurement system requires investment by government, regardless of the selected implementation model.
4.3.1. Key Considerations in selecting a model
While no single business model for an e-procurement platform is inherently superior, choices should be based on conscious and strategic decisions to best achieve the objectives in the long run for the entire public procurement system (Methodology for Assessing Procurement Systems, 2024[11]). A number of factors should be considered when selecting a delivery model, including:
The expertise and experience available in OGP and the wider government in delivering large-scale digital platforms,
Costs under different models, and
Considerations around control and flexibility.
Given Ireland’s current state, with a well-developed central platform in eTenders in place, the following analysis will focus on the decision between buying and building a platform. Having a single central platform simplifies integration with other government system, facilitates standardisation, and allows for a common user experience for contracting authorities and economic operators. Implementing a decentralised model would represent a radical change that would risk these positive aspects without corresponding clear benefits.
Expertise and experience developing digital platforms
Different levels of internal capacities and capabilities are required under different delivery models. If there is a strong track record and substantial in-house experience in developing large-scale digital projects, the build option may be more feasible. OGP has relatively limited experience delivering this type of platform. If the public service’s overall experience in large-scale digital projects is equally limited, buying a commercially available platform or certifying multiple vendor solutions could mitigate the risks associated with potential project failures.
The required capacities and capabilities also differ. Whoever takes ownership of developing and maintaining the platform needs to have the capacity and resources to manage the associated risks. Building a platform, regardless of whether it is carried out internally or by contractors, would demand a higher level of co-creation and technical skills within OGP, as well as robust project management capabilities and capacity to oversee the entire development cycle and the ongoing management of the platform. Discussions with peer countries indicated that the ongoing maintenance and development of the platform represented the biggest shift from a ‘buy’ to ‘build’ model. They stressed the importance of diverse profiles of employees with extensive knowledge of public procurement and digital government. Conversely, buying a platform requires strong contract management to ensure the vendor meets all obligations and integrates the system into existing workflows. User support can be partially outsourced to the vendor, but the public authority will generally remain the main point of contact and support for contracting authorities and economic operators and will be best positioned to understand and respond to their questions and concerns.
Cost considerations
It is important to carefully evaluate the total cost of ownership over the platform’s lifecycle. Building a platform generally involves substantial upfront investment in development, customisation and testing. The implementation costs of a custom platform are typically higher than the use of an “off-the-shelf” system through a contracting relationship with a vendor (European Bank for Reconstruction and Development, 2015[16]). Buying an existing commercially available platform typically requires lower upfront costs, but expenditures for customisation and integration with other platforms and tools can be substantial.
Building in-house can also involve more long-term costs related to maintaining and upgrading the platform, ensuring cybersecurity, and providing ongoing technical support. These costs are often unpredictable and can increase with system complexity or the scaling up of future needs. Buying a commercial platform generally offers more predictable, recurring costs over the life of the contract, often covering hosting, maintenance, updates, and vendor support. Nevertheless, licensing fees can be significant over time and vendor lock-in, discussed later in this section, can reduce competition and drive-up costs.
Control and flexibility
Building an in-house solution can help avoid vendor lock-in, as the government would retain intellectual property rights over the platform and could more easily maintain detailed documentation. However, this requires a sustained investment in internal capacity to ensure that the platform evolves and scales with changing needs, even if the direct development work is contracted out.
Buying a platform from a vendor risks dependency on that vendor for updates, support, and future enhancements, making it important to retain sufficient internal knowledge to manage and troubleshoot the system. There may also be limitations with regards to customisation and the ability to integrate with other government systems. Changes to the platform, such as major updates or discontinuation, are generally controlled by the vendor. It also creates the potential for increased disruption and the need to manage a transition if there is a change in vendor. The government must also fully understand the contractual relationship and terms of the agreement with regards to their rights and ownership of the system and data and provide for a transition plan at the end of the contractual relationship (European Bank for Reconstruction and Development, 2015[16]).
4.3.2. Steps to reach a decision
Reaching an early decision on the appropriate model for implementing eTenders would enable OGP to align its capabilities and capacities with the chosen approach, ensuring a more effective implementation and a smoother transition if a decision was made to change models. This section outlines a structured process for OGP and the government to make an informed decision during the life of the current eTenders contract.
Source: Authors’ elaboration
1. Evaluate current capacity, capabilities and experience
OGP should assess the existing skills and experience within its own organisation and across government in developing, managing and maintaining large-scale digital platforms. This could include capabilities and experience in sectoral CPBs (e.g. the Local Government Operational Procurement Centre), the OGCIO, or other organisations such as the Revenue Commissioners. This step could also include reviewing past projects of a similar scale to evaluate success rates, challenges faced, and lessons learnt.
An inventory of available resources, including technical and human resources, should be compiled to identify gaps and highlight areas where OGP lacks sufficient expertise or resources to deliver a different approach than its current outsourced model, noting specific skills or capabilities that would need to be developed or acquired.
2. Evaluate the willingness and ability to invest in capacity and capabilities
It is critical to gauge government’s readiness to invest in developing or enhancing capabilities and capacities, both in the near-term and over time. This includes assessing the future availability of funding for training, hiring and technology investments across different models and evaluating whether different models align with broader government policies and strategic objectives. Senior officials and representatives from key stakeholders, such as sectoral CPBs and DPENDR, should be engaged to understand their priorities and their risk tolerance.
3. Develop detailed options considering the advantages and disadvantages of different models
Different options analysis tools, such as Success-Weakness-Opportunity-Threat (SWOT) or cost-benefit analysis, could be applied to the decision. A SWOT analysis would identify the strengths and advantages of each model, highlight potential drawbacks and limitations, explore the potential benefits and the opportunities for the e-procurement platform to contribute to broader objectives under each model, and assess the risks (including technical, operational and financial risks) and external factors that could impact the success of each option. A cost-benefit analysis would need to consider upfront costs (initial investments required for development or purchase), ongoing costs (maintenance, licensing and operational expenses), and long-term value (return on investment, scalability, and flexibility).
The analysis should be linked to the digital transformation strategy, evaluating how well different models would contribute to the achievement of its objectives and the targeted future state.
4. Develop a business case
Finally, the findings of the options analysis should be presented in a business case. The business case should make an evidence-based recommendation for the preferred model and outline a roadmap for implementation, including timelines, key milestones, and resource allocation. OGP can also use its experience with the previous and current eTenders contracts as a baseline against which to compare possible alternatives.
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