Procurement SourcingProcurement Strategy

Public procurement and the internet of things

By 2nd October 2015 No Comments

The Internet of things is transforming the way the world operates. Public procurement is however being left behind by this. In many instances, public buyers and decision makers are not demonstrating the agility necessary to benefit from big data. All too often, management is more focused on maintaining a phoney sort of status quo (which is artificial because change happens on a constant basis) than focusing on public service transformation.

The fact that everyday objects and large scale machines now interface, communicate and operate to ever increasing degrees of sychronicity is presenting challenges and opportunities for public sector buyers and suppliers alert to the phenomenon. In 1984, about 1,000 devices were connected to the Internet. This number is projected to be in the region of 25bn by 2020 (source: Gartner, 2014).

These devices offer the opportunity to change the established way of seeing and doing things. Services, heretofore centralised for risk and convenience purposes, can be radically changed. Currently, the city of Sheffield in the UK has an open, problem based tender out for a supplier (or suppliers) to design a multi-faceted solution that will help mobility-impaired citizens live independently. In this case, the Internet of things will enable what will probably be a hybrid solution of wearable technology, bespoke software, online patient records, home adaptations, online pharmacies, scheduled and unscheduled community care and emergency helplines to greatly enhance the quality of life of such citizens. Without the past (personal community care, home adaptation) meeting the present and future (the positive democratising aspects of technology, software and agile supply chains), mobility impaired people would continue to lie in hospitals or long term beds and become institutionalised.

This means that processes to support services like the one described are becoming more complex. With multiple objects all measuring different things, the challenge for service commissioners is to understand what the data is telling them so they can achieve their product or service objectives and ensure outcomes meet minimum quality expectations.

Unfortunately, the internet of things and big data is still being seen as an IT or Technology thing or worse still as something under the innovation banner. Innovation in public services (especially advances that would simply not happen without enlightened public procurement thinking like in the example from Sheffield) is seen as a nice to have while the public sector gets on with doing what it has always done. If however, the service user rather than the provider is placed at the heart of public procurement design, dramatic benefits can arise for service users. This requires an enlightened public procurement strategy and future focused thinking.

The developing world and really well run small countries like Estonia (which calls itself the digital society) are way ahead of most other nations in understanding that the internet of things, big data and public sector transformation are what will drive the forthcoming revolution. In truth, the revolution is already with us and has been underway for several years. The challenges and opportunities are outlined well in the Fourth Revolution. It remains to be seen whether the captive mindset of larger post-industrial economies can be radicalised sufficiently to get ahead of these changes and position themselves as leaders in the economies of the future.


Featured image by Opinno