Over 800,000 businesses supply goods and services to the government, with a large percentage made up of SMEs. But as of January this year, all local authorities and their suppliers have to trade and make transactions electronically. This means that all businesses, from cleaning services to stationery suppliers, must now review procurement procedures and ensure that contracts can still be made with all public sector bodies, whether selling to central government departments, the NHS or local authorities.
This has had a huge impact on the thousands of SMEs still using traditional paper-based methods for pitching for tenders. They are now looking at the vendor and reseller community to provide the appropriate solution and make the transition from paper to email a smooth and uncomplicated one.
Of the total number of businesses selling goods to the government, approximately 30 per cent have not met the e-commerce deadline. There are a number of reasons for this, but the main one is the perceived cost associated with communicating electronically, which stems from a lack of education among the SME community. The onus is therefore on both vendors and resellers to educate smaller businesses on the options available and provide the right package at the right price.
In order to trade electronically with the government, companies must also have email, and with 99.9 per cent of the UK covered by broadband, it offers a real chance for all businesses to have an always-on connection.
In addition to using e-procurement processes to transact with government departments, the benefits associated with transacting electronically make it a viable option for all businesses.
E-procurement allows companies to reduce costs and increase efficiency by interacting with suppliers to buy products and services electronically, rather than spending unnecessary time with traditional methods of communication and procurement, which can generate a large paper trail. Trading electronically doesn’t need to involve a huge change in the way businesses are run, but rather a change in mindset about the use of technology.
The benefits of transacting electronically far outweigh any cost outlay. For example, closer collaboration with customers and suppliers can help manage stock levels more effectively and improve the efficiency and productivity of business processes. Small businesses need to think big, and go beyond using technology just to manage the contact database.
To stay competitive they must interact electronically with customers in real-time, not only to improve the speed of communication, but also the quality of service.
Alan Moody is UK managing director at Mamut
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