‘Digital procurement must deliver transformation’

Policy Analyst at the OECD, Simon Cox, explains why governments must move beyond simply digitising procurement processes and instead use technology, data, and user-centred design to fundamentally reshape how public procurement operates.

According to Simon Cox, public procurement has become one of the most important drivers of public sector performance and digital transformation. Cox believes that procurement represents a substantial share of government expenditure and, if modernised effectively, can improve efficiency, transparency, and public service delivery across government.

“Public procurement is a really important part of what governments do. It represents about 13 per cent of GDP across OECD countries and is a key lever for government performance.”

While digital technology has influenced procurement for many years, Cox believes governments are now entering a new phase of maturity.

“What we are seeing more recently is an effort to look much more strategically at how digital tools can actually change processes,” he says.

“It is not just about taking an existing procurement process and doing it digitally. It is about asking how we can redesign that process to take advantage of technology.”

Beyond digitisation

Drawing on the OECD’s work with its 38 member countries, Cox explains that digital procurement has evolved from simply replacing paper-based systems with electronic ones to becoming a catalyst for organisational change.

The OECD’s Recommendation on Public Procurement, agreed by all member countries, identifies digital procurement as one of the principles underpinning modern public procurement systems. However, Cox stresses that its importance extends much further.

“Digital transformation is clearly linked to procurement, but it also supports transparency, integrity, evaluation, and integration,” he explains. “It underpins many of the principles that are central to good procurement.”

Rather than viewing technology as an end in itself, governments are increasingly recognising procurement as a strategic function capable of supporting wider digital transformation across the public sector.

“We see procurement as a tool to help drive digital transformation across government as a whole,” Cox says.

Data-driven procurement

Alongside integrated systems, Cox identifies data as one of the defining features of modern procurement. Unlike many other government functions, procurement often depends on information held elsewhere across the public sector.

“Successful digital transformation often relies on data that sits outside the procurement function,” he explains. “Connections with tax systems, business registries, criminal records, and other databases are essential.” Many countries continue to face common challenges, including fragmented systems, inconsistent data quality, and shortages of digital expertise.

Despite those obstacles, Cox points to several international examples where better use of procurement data is already delivering benefits.

South Korea’s long-established KONEPS procurement platform connects almost 200 government databases, significantly reducing the administrative burden placed on suppliers.

“Businesses no longer have to collect certificates and supporting documents from multiple organisations,” he says. “The procurement system can retrieve that information automatically.”

Competition authorities in countries including Spain, Colombia, and Brazil are using procurement data and analytical tools to identify suspicious bidding patterns and potential collusion.

“To do that successfully, you need structured, high-quality data and procurement organisations that are willing to share that information,” Cox explains.

At European level, he also highlights the Public Procurement Data Space, which aims to create a common infrastructure bringing together procurement information from across the European Union.

However, he cautions that sophisticated analytical tools are only as effective as the information they receive. “If public buyers do not have tools that make it quick and easy to enter good-quality data, that weakness flows through the entire system.”

AI supporting procurement

While artificial intelligence is attracting significant attention across government, Cox says procurement organisations are taking a measured approach to its adoption. “We are talking a lot about AI, but there are also other innovative technologies supporting procurement, including blockchain, low-code tools, and the Internet of Things.”

Across OECD countries, the most common applications for AI currently relate to transparency, audit, oversight, and administrative efficiency. User support is also becoming an important area of development through AI-powered assistants.

“What countries are finding is that when AI is trained on a very specific and narrow body of information, it can provide reliable answers with far fewer hallucinations.”

Cox cites Norway’s use of AI to analyse procurement documentation and monitor how environmental criteria are being incorporated into purchasing decisions.

Although promising, he says implementation requires considerable effort. “It delivered results, but getting it working well required time, investment, and extensive testing. It was not perfect, but it demonstrated the potential.”

Given procurement’s highly regulated nature, governments continue to adopt a cautious approach. “Public procurement is a very risk-averse and legalistic area,” he says. “One of the challenges is that AI can be relatively easy to pilot but much harder to implement more widely.”

Ireland’s progress

Ireland has also featured prominently in the OECD’s work on digital procurement. Cox says that the organisation recently completed a European Commission-funded review of digital procurement capability with the Office of Government Procurement and has already seen significant progress since that work concluded.

“We have seen government and the OGP really advance that work over the last year,” he says.

He also highlights Ireland’s publication of a Digital Procurement Roadmap, together with work to strengthen governance arrangements and introduce user-centred design into procurement reform.

“Ireland has been developing some really interesting tools that address key pain points for buyers and suppliers,” he says. “We are excited to show that work to other OECD member countries.”

Concluding, Cox argues that successful digital procurement depends on much more than investing in new technology. “It starts with a clear whole-of-government vision, measurable objectives, and strong coordination,” he says.

The OECD policy analyst also asserts that governments must invest in better data, stronger digital skills, integrated digital tools, and user-centred services. “Digital transformation is about developing solutions that support the entire procurement lifecycle while embedding digital-by-design principles so systems genuinely meet the needs of the people who use them.”