As functional lead for digital, the Department of Internal Affairs (DIA) leads all government market engagement for the New Zealand government. It has used a co-designed model — including a focus on inclusion, human-centered service design, and an agile approach across the alpha and beta phases — that disrupts the prior manual procurement model and is driving its digital transformation.

The DIA’s digital Marketplace, which debuted in September 2018, makes it possible for suppliers to be accepted into Marketplace (effectively an all-of-government panel) in as little as 12 hours, versus the 12 to 18 months under a traditional tender/RFP process. This digital business platform represents a new way of thinking about how government can work as a “single customer” and how partners — especially small and emerging suppliers — can more easily, effectively, and securely sell to government agencies and together deliver better citizen and employee outcomes. The initial class of suppliers it empowered was software-as-a-service vendors (already well used by government agencies), and it is now expanding this to the broader, digitally empowered community. The platform lets agencies set their own business rules and approval processes for purchasing — with a one-time registration and setup.

Source: DIA

DIA split the Marketplace into five simple stages, each with a number of capabilities linked to them: onboarding, catalog management, fulfillment, billing and payment, and data and analytics.

Source: DIA

Marketplace provides an opportunity for suppliers that may not traditionally respond to government RFPs to put their product or service in front of a broader government audience via a low barrier to entry; simple, standardized commercial terms; and being open 24×7. This allows suppliers to apply when they’re ready, rather than on a cycle dictated by the government.

What drove this innovation effort? A clear CX focus: aiming to make economic cooperation, procurement, and development of new citizen value easier, inclusive, and more transparent. Moves like these are a hot topic across governments, as highlighted through New Zealand’s involvement in the OECD’s thematic group on procurement. Chris Webb, general manager of commercial strategy and delivery at the DIA, explains, “Moving the procurement process from a largely manual approach to an online model is a big step up for government and presents many opportunities for the future.”

As part of the OECD thematic group on procurement, the DIA has been participating in hackathons since 2017. These have subsequently helped support and inform its future direction. In last year’s hackathon, where the DIA previewed Marketplace, it looked to address the following citizen problems and opportunities:
• Agencies are solving (or not) the same issues and not leveraging other agencies’ solutions.
• How do we improve knowledge sharing and communications across government and suppliers, thus encouraging them to share innovation lessons and engage and support the industry?
• How do we change risk appetite so that organizations understand and mitigate risk rather than avoid it? (This was the winning pitch at the hackathon.)
• Some decision makers may be risk-averse, and decisions are difficult to achieve buy-in for. Society needs confidence, more rapid buy-in, and flexibility to adjust to change.
• What are the desirable attributes for successful relationships?
• An iterative, agile solution and budget to deliver value and pivot or fail where required.

Is your government agency pursuing a similar strategy to drive your digital transformation and innovation efforts? If so, let us know, as we are working on a Q3 report on government tech-driven innovations like this.
If not, definitely follow the links above to learn more about how you can build off of New Zealand’s successful efforts.

You can also find out more on adaptive orgs, tech-driven innovation, and the future of IT on Forrester’s website, or schedule an inquiry.