How to buy “innovation with sense” from the government? (II): A quick guide to public purchase of innovation

In our previous article, we referred to reactive and proactive approaches to public procurement of innovation (CPI), through which public entities can establish both mechanisms to constantly identify challenges in their management and their services to citizens, as well as generating spaces to receive proposals for solutions or innovation ideas from companies and startups to analyze if they address their problems. Both approaches are not exclusive and can be promoted simultaneously.

We also remembered the 4Ds or key factors to succeed in a CPI program: Decision, Disposition, Definition, and Money. Analyzing 4Ds and learning about proactive and reactive approaches, how do we put the ICC into practice? The sequential execution of certain stages will allow us to successfully connect needs and solutions to buy “innovation with the meaning”.

A quick guide to public purchasing of innovation: planning, management, and evaluation.

In the planning stage are all those preparatory activities to carry out the ICC and which have a more strategic component.

Activity 1: Promote the strategic vision of innovation and public purchases through awareness-raising sessions in the public entity. It may be interesting to set themes or areas of interest for CPI to agree with the people of the organization.

Activity 2: Identification of innovation opportunities, either through proactive CPI or reactive CPI, as we identify good opportunities, we will achieve good solutions.

Activity 3: Specification of these needs through methodologies for the analysis of complex problems, such as journey maps, which allow the generation of a descriptive document of needs where the problem to be solved is analyzed in-depth, the determining factors, the objectives or the ideal scenario to be reached. The key is to change the mental schema and not think of solutions but focus on defining the problem as precisely as possible, integrating the vision of the user or citizen. The time invested in defining a problem is generally directly proportional to the quality of the solution obtained.

Activity 4: Analyze the sources of financing for the ICC, depending on the country, there may be different instruments to finance the ICC, but in any case, it should be an incentive, not the only reason to advance in the process of buying innovation.

Activity 5: Consult the market to identify potential solution ideas in a transparent scenario and equal treatment with the technological offer. For example, as an advanced case, the Galician Health Service stands out, which in its Code 100 program, launched a digital tool to manage the market consultation process. He carried out more than 10 days with different entities, implemented a dissemination strategy through social networks, which allowed innovative startups and SMEs to be brought together, and generated documents that allowed collaboration between participating companies and universities (a guide to business initiatives ).

Activity 6: Preparation of an early demand document, which allows you to anticipate the technological offer what the functional requirements of our purchase will be, once all the ideas received in the market consultation have been analyzed. Ideas that are considered interesting will be collected in a general way in this document.

In the management stage, we will focus on shaping the purchase, following the legal guidelines of the procurement laws of each country.

Activity 7: Carrying out a cost-benefit and life cycle analysis for the purchase that we are going to carry out, which allows us to identify performance indicators that we will use for the project.

Activity 8: Elaboration of a functional analysis of needs, that allows knowing the problems and needs that we want to solve, the scenario that we want to reach, but without determining the solution or the technical specification to achieve it. At this point, we can be guided by the UNE-EN 16271: 2013 standard related to “Value Management”, functional expression of needs and technical specifications, approved in 2013.

Activity 9: Selection of the contracting procedure that best suits, depending on the level of development that we want to reach and the purchasing regulations of each country, but as a general rule, they should allow negotiation during the process and the inclusion of trials of value in the evaluation.

Activity 10: Selection of the successful bidder and execution of the contract, paying special attention to the treatment of intellectual property rights.

Finally, since we are conducting research, development, and innovation activity in the provision of public services, once the CPI contract has been executed, the final stage consists of the evaluation.

Activity 11: Testing and measuring the performance indicators, in terms of savings, quality and user satisfaction, to decide whether to scale the solution, since it has been successful, or on the contrary, the deployment does not proceed.

CPI in Chile: Improving the user experience of the SERNAC web channel

A practical example of the application of the entire CPI process can be found in Chile. The public procurement agency ChileCompra, the Ministry of Economy and the Government Laboratory worked together between 2016 and 2018 to test three small-scale CPI pilot projects and generated useful recommendations, through an Innovation Directive for Public Procurement for areas purchase of the 850 state agencies. Three institutions participated in the pilot: National Consumer Service (SERNAC), Parque Metropolitano, and Carabineros de Chile.

In the case of SERNACs, it constantly seeks to innovate to respond to the problems that citizens demand. As a result of this, the need arose to institutionalize innovation within the structure of the service and its officials, including in the public purchasing area.
(photo: Chilean Government Laboratory) .

Problem identified

SERNAC’s web channel for making complaints presented complaints and was not very intuitive and user-friendly.

Work methodology

Different collaborative and co-creation workshops were held between officials and managers of different ranks using people-centered design methodologies. In the first stage, SERNAC officials worked collaboratively to identify the innovation challenge of how to improve the experience of consumers who use the web channel to make their claims. Once the need was defined, the market consultation process was carried out, which received 7 responses to the established innovation challenge, and then the tender was launched.

Solution

The provider selected by SERNAC was a startup or startup called “Trust me”, who managed to better meet the evaluation criteria to obtain the award. One of these criteria was the understanding of the problem from the user experience. As of January 2018, the prototype of the SERNAC website generated by the company was tested with users.
More information on the case here
We hope that both the example case and the quick tour of the stages and activities necessary to implement public procurement of innovation (CPI) processes, allow public entities to have a reference framework on the necessary steps and reflect on the capabilities that They need to carry them out before taking action.

It is also encouraging to know that there are already institutions in different Latin American countries such as Chile, Colombia, Mexico, Uruguay, Ecuador, Brazil and Peru that have started on this path of the ICC and that they are carrying out structured processes that allow “innovating with meaning ”Using public procurement, opening up to innovation policies and instruments to demonstrate that another way of innovating is possible.

What opportunities or challenges do you see to implement the ICC in your country? Tell us in the comments

It may interest you

The II Ibero-American Forum on CPI and open innovation will be held in Medellín from November 26 to 28, 2019, organized by the IDB and Ruta N, with the support of GAIN, as a driving force at the regional level in Spain and the Ministry of Science, Innovation, and Universities (MICIU) as the entity responsible for public policy on CPI in Spain.

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