Supplier Risk Management for Government Organizations in Australia

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Supplier Risk Management

Procurement in government organizations across Australia has always been a challenge due to the ever-evolving government regulations. Staying within the bounds of these regulations and streamlining the process of procurement is now a key imperative for procurement leaders.

According to the Victorian Government’s Digital Strategy 2021-2026, a 4-step approach for selecting software is construed as the need of the hour. They are promoting investing in SaaS over buying or building software of their own. This will not only reduce the cost of development but also improve implementation, scalability, and efficiency. Not only Victorian Government, but the world is now on the track to digitize all manual processes to improve compliance and reduce risks along the way. This wave of digital transformation makes us question the need to go digital. Do all processes need to be digitized?

Let’s talk about strategic sourcing and the impact of digital transformation on it. With government organizations using entire suites with AI incorporated, it is a process that is being digitized to achieve ease of operations as well as better compliance and risk management.

There are a lot of benefits that can be listed here but let’s talk about one of the benefits that agencies across the world can enjoy if digitization is accomplished.

Reducing risks!

That’s right. With more and more government organizations opting to depend on various suppliers for their requirements, they are also facing challenges while operating with them. Some of the challenges faced by government organizations in terms of suppliers are listed below:

  • Data Privacy and Cybersecurity risks:

Data breaches are the most common but most avoidable problems. An organization with a robust IT infrastructure and secure IT solutions will easily tackle this. However, this is only possible if the technology adopted is consistently upgraded to protect itself and in failure to do so, they may be prone to attacks from the latest ransomware and similar malware.

  • Compliance and regulatory risk:

As regulations continue to become more stringent to protect the interests of the economies, it becomes difficult for suppliers to keep up with these changes and this can cause major slips when trying to be compliant. In some cases, the supplier may also be unable to adhere to the regulations in time, causing loss to its clients. As a government organization, it is all the more important to contract with suppliers that can hold up to regulations and other statutory rules.

  • Financial and reputational risk:

Finally, the financial risks that an agency is prone to when dealing with multiple suppliers. Any kind of disruption in the supply chain can lead to financial loss and this may lead to making public disclosure of the disruption and eventually will affect the organization’s reputation.

Digitization can reduce all these risks for agencies, which often operate with multiple suppliers.

One major benefit of digitizing government procurement is that it helps cut down on supply chain-related problems, such as fraud or contract disputes. government organizations can allow one solution provider to provide all requirements from the start to finish. This will prove to be beneficial due to minimal integration requirements for the processes. It will help streamline all source-to-pay (S2P) activities, while also analyzing the supplier risks and compliance requirements.

Case In Point:

A government postal service located in Melbourne, Australia, was struggling with its previous S2P(Source-To-Pay) procedure which relied extensively on manual processes and depended on third-party platforms for each module. Intending to go entirely paperless, they were seeking a solution provider who could help automate and centralize their procurement process.

With Zycus’ Source to Pay Solutions they were able to:

  • Automate: With automated procurement processes resulting in increased efficiency and productivity
  • Secure: Enhanced stewardship, security, and continuity around important contract documents
  • Identify: They identified suppliers based on specific requirements and code of conduct
  • Improved Visibility: Gained enhanced visibility in supplier-associated risks and performance management
  • Improve Compliance: Enabled easy and compliant buying with Zycus’ procure-to-pay solution

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If these look like some solutions that would benefit your government Organization, be sure to attend Zycus’ Webinar being hosted on the 8th of September 2022 for all regions in South East Asia, Australia and New Zealand. This webinar in association with Jon Hansen, Writer & Speaker at Procurement Insights will host Manishankar Kumar, ESG Manager at North-South Initiative and Ashan Kumar, Managing Director for PR Wire Sri Lanka and includes an insightful session on “New Rules for A New World: Why Procurement Must Take the Lead in Accelerating ESG Adoption”.

To know more and register for this webinar visit https://engage.zycus.com/procurement-must-take-the-lead-registration.html

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