This chapter sets the context for the Guidance Paper by outlining general principles for the digital transformation of public procurement and the specific insights into Ireland’s procurement landscape. The first section provides a general framework for the digital transformation of public procurement, exploring key considerations shared across jurisdictions, such as the value of taking an end-to-end perspective on the procurement cycle and the role of data in digital transformation. The second section summarises the key findings of the OECD’s stocktaking report on digital public procurement in Ireland.
The Way Forward for Digital Public Procurement in Ireland
Guidance for Strategy Development
Abstract
1.1.1. The digital transformation of public procurement is an opportunity to rethink processes and drive better outcomes
The digital transformation of public procurement promises a host of benefits. It can make procurement more agile, allowing for swift adaptation to changing needs and supporting innovative approaches. By streamlining processes for public buyers and suppliers, it can make transactions more efficient and effective. The increased collection and use of data can inform procurement strategies and facilitate the measurement of outcomes, especially as procurement becomes a policy tool to drive environmental and social objectives. The data generated by digital procurement can also support policymaking and increase transparency. Finally, the continuing shift towards digital platforms and tools can increase users’ access to and satisfaction with public procurement systems and services, fostering greater participation from small and medium-sized enterprises (SMEs) and promoting competition. At the same time, digitalisation should not be pursued for its own sake, but only when it can improve the experience of public buyers and suppliers and contribute to better policymaking.
Digital transformation in public procurement can include a wide spectrum of initiatives, from establishing a digital portal for government contracting opportunities to using emerging technologies such as artificial intelligence (AI) to inform evidence-based decision-making and strategic policymaking. It requires redesigning to take full advantage of opportunities and to avoid replicating existing processes and bureaucracy electronically.
1.1.2. Public procurement benefits from an end-to-end, user-centric approach to digital transformation
Digital transformation involves reconsidering the public procurement process from an end-to-end perspective. In the pre-tendering phase, examples include using digital tools to improve market research and to identify and engage with potential suppliers or using data analytics to support demand forecasting and strategic planning. The tendering phase also benefits from digital transformation. For instance, data analytics can support bid evaluation and price analysis, user-centric tendering platforms can help create a seamless experience for tenderers and public buyers, and transparency can be increased by improved data availability. Finally, the post-tendering phase can benefit from digital transformation; for example, digital tools can enable streamlined monitoring and enforcement of contractual obligations. More broadly, the increased production of digital data can be used to measure the impacts of strategic procurement strategies, and answer questions about the impact of government spending on the environment, the economy and society at large.
Digital transformation also entails a focus on users and their needs rather than on technologies. By understanding the needs of contracting authorities, Central Purchasing Bodies (CPBs), bidders and other users, it is possible to redesign existing processes and procedures through the strategic adoption and use of digital tools and data. During process re-engineering, unnecessary elements can be discarded and processes streamlined to take advantage of digital tools. Rather than digitising existing processes or upgrading existing technologies, the ambition should be to revisit culture and practices. This involves a focus on user needs and embracing a bottom-up approach, where the insights and requirements of users inform process design.
Public procurement is interconnected with other functions of public administration. Interoperability with other digital government platforms and tools – such as public finance management, budgeting, human resources management, social insurance, justice, business and tax registries, auditing, and enterprise resource planning (ERP) – is critical to deriving the full benefits of digital public procurement during all phases of the procurement cycle. Without interoperability between the different platforms and tools, digitalisation can result in increased work, error propagation and inconsistent data. Registering the same data in multiple platforms creates administrative burden for users in addition to the risks of fragmented and incoherent information.
1.1.3. Data are a critical enabler and output of the digital transformation of public procurement
Transparency requirements and the implementation of digital solutions generate a huge amount of data submitted by public buyers and suppliers (OECD, 2019[1]). The value of this data emerges when it is used. Data-driven insights can help identify procurement needs, forecast demand, and assess market conditions, ensuring that procurement activities align with organisational goals and achieve value for money. With access to high-quality data and analytics, procurement planning can become more strategic and evidence based. By analysing historical performance data and monitoring supplier metrics, public buyers can identify high-performing suppliers, foster healthy competition, and mitigate potential risks associated with suppliers’ financial stability or past performance. As procurement is increasingly used as a tool to achieve strategic outcomes, data provides a means to assess the impact and effectiveness of procurement strategies. Digitalisation also provides increased transparency and accountability, allowing oversight bodies, civil society and the public at large to better track and understand government spending.
The dividends of the digital transformation of public procurement therefore require investment in public procurement data governance to ensure its effective management, sharing, and use. Governance frameworks should include clear policies, standards, and procedures to provide trust in the data, promote accountability, and reduce the risk of misuse (OECD, 2019[2]). Accurate, complete, and timely data are critical for making informed decisions. Establishing data quality checks, validation mechanisms, and data cleaning processes is necessary to ensure this reliability. Adopting standardised data formats and definitions across different procurement platforms and organisations can further facilitate data integration and analysis.
1.1.4. Emerging technologies provide increasing opportunities to deliver value for money
Emerging technologies – such as artificial intelligence (AI), robotic process automation (RPA), and the Internet of Things (IoT) – are increasingly being deployed to enhance public procurement processes and improve value for money. These technologies can increase efficiency by eliminating repetitive operations and streamlining processes, deliver novel insights, and facilitate new platforms for market engagement. However, public authorities should be aware of the preconditions for the successful implementation of many innovative and emerging technologies, such as access to extensive, representative and timely data. Governments must also mitigate potential risks, such as the amplification of bias, the lack of transparency in system design, and breaches in data privacy and security that could arise from the irresponsible implementation of AI (OECD, 2024[3]).
1.1.5. Public procurement is part of the wider public sector digital transformation journey
Digital public procurement is a key component of digital government. Strategies to digitally transform the public sector are fundamental to enable a coherent and integrated digitalisation of public processes and services, including public procurement. While an individual e-procurement ecosystem or platform can be internally well-functioning without being embedded in a broader strategy, a strategic approach aligned with these broader policies can harness the e-procurement ecosystem to support cross-cutting policy objectives (Methodology for Assessing Procurement Systems, 2024[4]). Issues related to whole-of-government policies and initiatives such as the ‘'once-only principle’' and digital identity are two examples of core digital government tools that inform the digital transformation of public procurement.
While the use of digital technologies in the public sector covers a broad spectrum, three levels of maturity can be identified:
1. Digitisation refers to the introduction of digital technologies in public administration, namely by translating analogue information and processes into digital means.
2. Building on digitisation, digitalisation is the process of using digital technology, and the impact it has on business operations (e.g. digitalisation of a process).
3. Digital transformation is a transformative process that helps rethink government processes and services through the integration of digital technologies as essential components in the design and delivery phases (OECD, 2016[5]).
Source: Adapted from (OECD, 2024[6])
While digitalisation emphasised transferring analogue and paper activity to digital means, the concept of digital transformation is focused on re-engineering and re-designing processes and interactions through digital era working practices, smarter use of data, and the appropriate use of technology. That means looking inwards to address the context and governance (including administrative structures, culture, capability and processes) and outwards, to focus on the needs of users throughout their experience of a public service (OECD, 2020[7]) (OECD, 2021[8]).
Ireland has laid promising foundations for the digital transformation of public procurement. This includes the mature use of e-procurement platforms for the tendering phase of the procurement cycle, as well as a supportive policy framework which encourages the use of data and digital tools for the transformation of government processes and services. However, there are gaps in areas such as the pre- and post-tender phases and the collection and use of data.
Ireland’s digital transformation efforts take place within the existing public procurement legal framework. Ireland’s public procurement legal framework is grounded in the European Union (EU) Directives, which are transposed into national legislation and apply to tenders for public contracts whose monetary value exceeds the EU threshold. For lower value tenders, national rules apply but must respect the general principles of EU law.
Ireland has developed a centralised procurement model, but there is a limited coordination on digital public procurement. Irish public sector procurement is divided into 16 expenditure categories procured by five CPBs, covering the goods and services purchased by over 7 000 contracting authorities. The Office of Government Procurement (OGP) is responsible for eight categories of goods and services. The four sectoral CPBs, health, education, local government, and defence, retain sourcing functions to procure the remaining categories. Each CPB establishes central purchasing arrangements within their categories of responsibility.
The OGP was established in 2013 with two key roles: developing national public procurement policy and functioning as one of five CPBs. Along with sourcing common goods and services, transposing EU Directives and developing national policy, the OGP’s responsibilities include advancing the digitalisation of public procurement and administering eTenders, the national electronic tendering platform. eTenders is a centralised digital gateway, providing a complete audit trail and transparency of electronic tendering activity. It is used by the OGP, other CPBs, government departments and agencies, local government and health sector organisations, and by the wider public sector.
Key stakeholders for digital transformation include the contracting authorities and CPBs who undertake public procurement, the economic operators who supply goods, services and works, and public procurement policymakers. Outside those directly involved in public procurement, digital transformation stakeholders include those involved in digital government, public sector transformation and oversight.
Given these diverse stakeholders, it is perhaps unsurprising that there is currently a limited coordination and collaboration on the digital transformation of public procurement. The absence of a common vision and strategy, as well as a set of guiding principles and oversight deepens operational silos, limits interoperability between tools and platforms and reduces the ability to leverage joined-up data, ultimately resulting in a more complex environment for contracting authorities and suppliers, especially SMEs. As the digitalisation of public procurement advances across these stakeholders, the limited coordination and alignment may create path dependency in which future policy options to digitally transform public procurement in Ireland will be more complex and expensive to implement.
1.2.1. The digitalisation of public procurement has focused on the tendering phase
Ireland has been successful in establishing the mature use of e-procurement for the tendering phase of the public procurement cycle. This has taken place primarily through the implementation of eTenders, which functions as a central point for publishing notifications and as the single eSender to Tenders Electronic Daily (TED), the online portal for public procurement notices from across the EU. Ireland has continued to invest in eTenders, with a change of the platform going live in May 2023. This recent renewal of the national platform provides a stable foundation for digital transformation but also creates some constraints on the scope of near-term change to the digital ecosystem.
In addition, sectoral CPBs have developed and implemented tools and platforms adapted to their specific sectors. For example, the Local Government Operational Procurement Centre has developed the supplygov.ie platform, which allows contracting authorities to efficiently draw on framework agreements and Dynamic Purchasing Systems (DPS) and undertake below-threshold procurements in the local government-led categories of Plant Hire and Minor Building and Civil Works.
At present, contracting authorities and CPBs in Ireland are using a wide variety of solutions and tools of varying sophistication across the procurement cycle. Procurement solutions and tools are generally not integrated and there appear to be few existing initiatives or plans to increase interoperability. Transferring information between contracting authorities’ internal platforms and eTenders requires inefficient manual processes, leading to data errors and challenges in tracking individual procurements through the lifecycle. Contracting authorities are increasingly adopting standardised financial management systems, but there is no exchange of data between these systems and eTenders that would enable better traceability of expenditure against procurements and reduce frictions for users.
1.2.2. The digitalisation of public procurement in Ireland has not consistently addressed access to and sharing of high-quality and timely procurement data
The limited interoperability and standardisation of procurement solutions is reflected in the heterogeneous approach to the structure and governance of procurement data. While increased digitalisation has produced vast amounts of data and could facilitate increased data availability and use, improved data use also requires changes in governance and culture.
Currently, Ireland does not have a dedicated and comprehensive approach to govern procurement data, hampering the opportunities a data-driven approach could offer to increase interoperability, advanced analytics or the use of emerging technologies such as AI. While OGP is developing a national public procurement strategy which will address data, the limited approach to procurement data governance to date is seen in the difficulties managing the transition between tendering platforms and the ownership of data models and standards that enable a smooth transition towards a renewed tendering platform.
1.2.3. Public procurement could be more responsive to the needs and expectations of users
Public servants responsible for procurement are faced with complex regulations and procedures, which may create frictions in the relationship between CPBs, contracting authorities and suppliers in terms of having access to procurement platforms and tools that meet their diverse needs. Enhancing the user experience is vital to addressing capacity and staff turnover challenges: automating routine procurement tasks and increasing access to data-driven digital tools will reduce the administrative demands on public servants.
However, Ireland currently has a limited approach to involving users, which may be hampering efforts to attract potential suppliers and ensure strong competition. This is manifested in existing top-down approaches to interpreting user needs, as well as in the limited progress made to implement the once only principle in procurement. This creates further frictions for suppliers as they often submit required information more than once to different procurement platforms, increasing repetitive data entry and time.
There is interest across the public procurement landscape in using innovative tools and technologies to rethink existing processes, increase efficiency, and improve the user experience. However, many emerging technologies, such as AI and machine learning, rely heavily on data to provide meaningful insights. Ireland would need to ensure the right tools and processes are in place to take advantage of these innovative approaches.
References
[4] Methodology for Assessing Procurement Systems (2024), e-Procurement Supplementary Module (Standalone Version), https://www.mapsinitiative.org/methodology/MAPS_standalone_e-procurement%20module_July2024.pdf.
[3] OECD (2024), “Governing with Artificial Intelligence: Are governments ready?”, OECD Artificial Intelligence Papers, No. 20, OECD Publishing, Paris, https://doi.org/10.1787/26324bc2-en.
[6] OECD (2024), Strengthening Oversight of the Court of Auditors for Effective Public Procurement in Portugal: Digital Transformation and Data-driven Risk Assessments, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/35aeab1e-en.
[8] OECD (2021), The E-Leaders Handbook on the Governance of Digital Government, OECD Digital Government Studies, OECD Publishing, Paris, https://doi.org/10.1787/ac7f2531-en.
[7] OECD (2020), “The OECD Digital Government Policy Framework: Six dimensions of a Digital Government”, OECD Public Governance Policy Papers, No. 02, OECD Publishing, Paris, https://doi.org/10.1787/f64fed2a-en.
[1] OECD (2019), Reforming Public Procurement: Progress in Implementing the 2015 OECD Recommendation, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/1de41738-en.
[2] OECD (2019), The Path to Becoming a Data-Driven Public Sector, OECD Digital Government Studies, OECD Publishing, Paris, https://doi.org/10.1787/059814a7-en.
[5] OECD (2016), OECD (2016), Digital Government Strategies for Transforming Public Services in the Welfare Areas,, OECD Publishing, https://www.oecd.org/gov/digital-government/Digital-Government-Strategies-Welfare-Service.pdf.