The Procurement Act – How digital transformation can enable confident compliance

Digital systems are not just markers of procurement excellence but will now be part of the ongoing process of compliance with governing bodies looking to make procurement practices more transparent. Those without digital systems will not be able to navigate increasingly competitive markets, nor comply with coming regulations.

In this blog we will cover what The Procurement Act is, why procurement professionals should take note, and how Unit4 can enable succinct compliance for today, and the future, when the supply chain is empowered with data – just keep reading to find out.

What is The Procurement Act 2023?

Introduced in 2023, The Procurement Act marks a repositioning of governance that will favor those with digital procurement systems. 

The act seeks to improve transparency, level the playing field, and make the supply chain more sustainable. A primary goal of the act is to drive better value for money by improving how contracts are awarded and managed.

Key Elements of the Act:

• Simplification – The Act will consolidate various procurement regulation into a single framework, to reducing bureaucratic complexity and administrative burden that often favor larger enterprises.
• Transparency and Accountability – The Act will mandate stricter disclosure and access to procurement data, to improve trust with the public, encourage accountability from the supply chain, as well as prevent fraud.
• Sustainability – A key focus of focusing on disclosure of procurement data is to encourage compliance with ESG (Environmental, Social, and Governance) reporting, as well as other social and ethical responsibility, to promote more sustainable procurement practices.
• Leveling the Playing Field – For small to mid-sized enterprises, they will find they can compete for many more contracts when the Act has been rolled out, creating a more open and competitive market for all.

Why should the CPO take notice?

The CPO should be aware and anticipate any upcoming changes to procurement legislation, but The Procurement Act marks a notable change in what’s expected of procurement teams.

Notably, in 2025 there will be some more strict enforcement of certain rules that procurement teams will need to prepare for:

• Mandatory Digital Procurement Platform - By 2025, the use of digital procurement platforms will be compulsory for public organizations. This shift is part of the government's broader digital transformation agenda to improve efficiency, data accuracy, and oversight. 
• ESG Reporting - Organizations will be required to report on their sustainability and ethical sourcing practices in much greater detail. To effectively embed this into operations, procurement teams will need digital data management tools to remain compliant. 
• Increased Focus on Diversity and Inclusion – Again, data remains at the heart of these reforms. Increased focus on DE&I initiatives reflects the growing interest from investors and governing bodies in the social impact of procurement operations – the latter needs digital systems to cope.
• Stringent Risk Management – The Act will magnify the risk management systems of procurement teams, and will involve greater monitoring of compliance, fraud detection, and cybersecurity to make the function more sustainable.

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Actions for Procurement Teams

Dealing with current mandates, and those coming in the future, requires the procurement function to digitally transform, and reconfigure their operations to be led by data, with simple and easy data processes to support.

With clear visibility of real-time procurement data, procurement professionals will face no obstacles to simple reporting of their initiatives related to ESG and DE&I, to demonstrate they aren’t just ticking boxes but consistently monitoring and optimizing the impact of initiatives.

When procurement teams can leverage data, developing processes to easily analyze performance, forecast, assess risk, and optimize the supply chain, they can successfully compete in this more open market.

When empowered with a Cloud-enabled ERP suite, a procurement function can deliver strategic value to the rest of the organization by easily quantifying and analyzing the effects of other functions of the supply chain, such as HR and Finances, transforming the supply chain from being purely supportive to delivering strategic value.

How Unit4 Source-to-Contract can enable swift compliance, and deliver valuable digital transformation

Procurement teams must embrace digital transformation, develop expertise in ESG, and leverage data-driven tools. By doing so, they can not only meet regulatory requirements but also drive value for their organizations in a more sustainable and inclusive way. 

Unit4’s Source to Contract solution enables procurement teams to automate and streamline sourcing, contract management, and supplier management —ensuring compliance with the Act’s mandatory digital procurement requirement.  

Source-to-Contract has capabilities that can support ESG tracking and risk management, helping organizations to seamlessly integrate sustainable and ethical sourcing into their procurement strategies. 

Unit4 Source-to-Contract can help procurement professionals meet the Act’s demands for transparency, accountability, and efficiency, all while driving better outcomes through data-driven decision-making and enhanced supplier collaboration – talk to sales today!