Government Agencies Identify Automation as Key for Improving Procure-to-Pay Process

Public agencies pursuing variety of goals with purchasing card initiatives, Visa survey finds

Public agencies pursuing variety of goals with purchasing card initiatives, Visa survey finds

Singapore — May 27, 2005 — A majority of government agencies around the world view automation as a key for improving their financial supply chains, but they are pursuing a variety of goals as they implement purchasing card initiatives to streamline their procure-to-pay processes, according to a new survey conducted by card issuer Visa.

A survey of 50 government officials from 13 markets around the world, including Japan, Korea, South Africa, Thailand, United Kingdom and the United States, found that 68 percent cite their key priority as automation and believe that there is further opportunity for improving their procure-to-pay process.

The survey was conducted at the seventh annual Visa International Government Services Conference held in Singapore recently. The conference focused on solutions for creating transparency, efficiency and stimulating growth.

Visa said that the survey was designed to provide firsthand insight into governments' procure-to-pay processes, including which parts of the process have proven most challenging to implement and trends over the next five years. In addition, representatives were asked about how electronic payments were being used to support growth efforts.

Automation Tops Expected Benefits

"Partnering with governments is a strategic priority for Visa and its members to help them achieve a variety of goals," said Aliza Knox, senior vice president for commercial solutions at Visa International. "Depending upon the government organization, these may include improving transparency, automation and reducing costs, as well as facilitating the transition to a formal economy and encouraging small business growth."

Additional survey results showed that:

  • 22 percent of government officials expect that improving process automation will be the most important benefit their organization will derive by implementing a commercial card program, followed by replacing cash (18 percent) and increasing procurement transparency (18 percent).

  • 82 percent of respondents report that their organization has implemented policies that aim to provide greater opportunities for small businesses to work with the government. Of those organizations that have not implemented a small business policy, 78 percent believe that small and midsize businesses will become a focus within the next five years.

  • 35 percent of government organizations plan to implement new technologies in the next five years, followed by outsourcing functions (31 percent) and new organization-wide processes (30 percent).
Most Agencies Planning New Initiatives

Almost all government services agencies surveyed report that within the next five years they plan to implement a variety of new measures, including new technologies (such as enterprise resource planning systems), centralized processes and outsourcing to third parties. All these measures support e-purchasing and expense management initiatives and translate to improved efficiency and cost savings, Visa said.

The theme of Visa's conference, "Partnering for Success," provided the platform for 20 industry representatives and authorities on government payment services to share their experiences. A number of governments and member banks showcased their programs, while industry experts from such agencies as the Asian Development Bank and the World Bank imparted their insights on global payment issues. The event focused on how to build efficient government payment systems that improve transparency and help stimulate economic modernization and growth.

Current Programs Detailed

Highlights from the two-day program included:

  • The Australia Department of Defense discussed its use of the Visa purchasing card.

  • The National Bank of Economic Social Development in Brazil (BNDES) explained how payment solutions provide small businesses with automatic access to funding.

  • Representatives from ABSA bank and the South African government presented an overview of their Sekulula Card program, which enables electronic delivery of government benefits and empowers citizens with new spending capabilities.

  • The South Korean Ministry of Construction and Transportation provided an example of a cooperative initiative between the government, the financial industry and Visa.

  • The U.S. General Services Administration (GSA) explained how the administration realized cost savings through streamlined acquisitions and preferred vendor discounts by integrating the Visa purchasing card with the GSA's online ordering system.
Christopher Rodrigues, CEO of Visa International, provided the keynote address, which outlined Visa's vision for the future and strategy for delivering value to the government sector.

This year's conference drew more than 200 attendees from 24 markets, which included approximately equal parts national, regional and local senior government procurement and travel managers, senior commercial banking executives and senior executives from Visa and its partners.

Additional Articles of Interest

— For more information on the current state of the payment solutions market, see the article "The Analyst Corner: Payment" in the December 2004/January 2005 issue of Supply & Demand Chain Executive.

— P-cards continue to advance, and e-payables solutions are making headway, but the convergence of the financial and physical supply chains is still a work in progress. Read more in "Enabling the Financial Supply and Demand Chain," in the April/May 2005 issue of Supply & Demand Chain Executive.