Procurement teams are often referred to as the “gatekeepers” of supplier innovation. But this role can swing both ways: they can open doors to fresh ideas, or unintentionally keep them locked away.
A recent NSW Government study called Innovation Procurement revealed some key barriers that can block innovative thinking from flowing freely.
One major issue is the time buyers have to plan and execute. Often, it’s not enough, and the process can feel overwhelming. Then there’s the complex policy environment and the mountain of documentation that often comes with it. On top of that, many procurement professionals might lack the skills or understanding of emerging technologies, along with the right support from the get-go. Finally, there’s the challenge of feeling confident in balancing risks and rewards while navigating various policy options.
To dig deeper into these challenges and explore how procurement can truly drive innovation, Quest Events spoke with four experts who will present at GovProcure 2025: Nicole West (Director – Finance and Commercial at Defence Australia), Luke Kenny (CEO, Local Government Procurement), Hanelie Lategan (CPO, Department of Families, Seniors, Disability Services and Child Safety, QLD Government), and Mathew Baldwin (Partner at Ashurst, and an ACT Government Procurement Board Member). Their insights reveal how procurement can shift from being gatekeepers to champions of innovation, helping organisations embrace new ideas and solutions.
Which areas of public procurement and the procurement process do you think are most ready for a fresh approach?
“Technology adoption in procurement processes is overdue for a fresh approach,” says Lategan. “Leveraging AI and data analytics can streamline workflows, improve decision-making, and uncover hidden efficiencies. Procurement planning and supplier performance management are other areas where innovation can help mitigate risks and enhance outcomes. It's about integrating smart tools to add agility and foresight to the procurement lifecycle.”
For West, the part of the procurement process most ripe for change is debriefing industry. “It’s crucial,” she says. “I don’t think we look at the processes properly; where we should provide information and also listen to what suppliers have to provide us as constructive feedback.”
Kenny believes the Go-to-Market process needs to be more diverse, creative and focused on better value creation. “We know there is more value we can find and negotiate,” he says. “We are now looking at how we can run different sourcing events on behalf of our sector.”
Finally, Baldwin nominates supply chain security as the key item for improvement. “Many public sector agencies are starting to deal with the problem of how to conduct open, value-for-money procurement in accordance with their accountability obligations, while at the same time engaging suppliers that offer secure and reliable services”, he notes. “This has dimensions across national security of vendor entities and subcontractors, financial viability, IT security where there are cloud or software components, and also for goods ensuring that they are legitimately manufactured, have gone through accredited supply chains, and haven't been tampered with.”
In your experience, what do you believe hampers innovation and openness to new ideas?
Besides the perennial concern about red tape holding back innovation for government and industry, our experts pointed to a courage issue in the sector.
Baldwin believes a major barrier involves the difficulty in aligning specific procurement policies that Governments seek to implement with overall requirements to achieve value for money. “Often these goals can compete against each other if not implemented well in individual procurements,” he notes.
“Procurement Innovation does not have a funding barrier in my opinion,” says Kenny. “But I think we have a courage issue, that is; courage to deploy something dramatic and impactful – a true game-changer. I wonder if we have enough leaders prepared to try and fail publicly in search of innovative new practices which we know will bring new value.”
Similarly, Lategan says fear of failure and the rigidity of established processes can often stifle innovation. “Procurement professionals sometimes hesitate to deviate from tried-and-true methods due to compliance concerns,” she observes. “Additionally, limited resources and time pressures can make it difficult to explore creative solutions. Overcoming these barriers requires a mindset shift that balances compliance with curiosity and encourages calculated risks.”
How do you create a team culture that makes space for innovation in your procurement processes?
“You can do what we have done [at Local Government Procurement],” says Kenny. “That is; create a role that specifically focuses on finding, implementing and quantifying the impact of innovation. Culturally, over the last three years and with innovation as one of LGP’s corporate values, we invite, communicate and celebrate innovation. Now we are moving our culture towards wanting to quantify and understand the impact of innovation.”
Harking back to the first hurdle identified in the NSW Government study, Baldwin observes that short timeframes are a constant problem. “Trying to plan processes so there is time to come up with the approach at the start in a way that promotes innovation and fosters team culture is important,” he says.
Lategan believes an innovative culture starts with trust and empowerment. “I encourage my team to think beyond the conventional and challenge existing norms. We foster a collaborative environment by sharing success stories, learning from challenges, and recognising innovative efforts. Weekly well-being check-ins also help the team feel supported, creating a foundation for creativity to thrive,” she adds.
West provides other tips on building the right culture: encouraging trouble-shooting, having an agenda to workshop it, and ensuring everyone can express their opinion.
How do you engage suppliers in the innovation conversation?
Finally, we asked our experts if there are any specific strategies that have worked well for them in terms of encouraging supplier innovation.
“When we send RFIs, we ensure they are not just about asking questions for industry to answer, but to ask how we can do better,” says West. This avoids closed or narrow answers and gives suppliers room to put forward new ideas.
Lategan’s advice is to engage suppliers as partners in the process. “Hosting co-design workshops and supplier forums allows us to tap into their expertise and ideas. Transparent communication about challenges and shared goals fosters mutual respect and collaboration, and highlighting success stories of innovative suppliers inspires others to bring their best ideas to the table,” she says.
In the IT space that Baldwin is most familiar with, the current approach involves setting up strategic-level vendor discussions and working on technology road maps that then feed into procurement decisions. These come with strict probity and process requirements that need to be well thought out and set up in advance.
What about Supplier Relationship Management (SRM)? “Encouraging supplier innovation is an area we can be better in, but we have started,” says Kenny. “Our SRM Program has a Senior Executive Engagement Initiative. Here we have myself as CEO and our Director of Procurement meeting with senior decision-makers inside our Top Tier suppliers. Over the past 18 months under this program we have jointly delivered a series of innovations together. These include wind farm tours, electric vehicle drive days, and innovation and capability grant funding programs.”
Hear more from Nicole West, Luke Kenny, Hanelie Lategan, Mathew Baldwin, and other expert speakers at GovProcure 2025 in Sydney from 4-6 March 2025. Learn more.
To access the detailed conference program, download the brochure here.