Thursday, June 23 2022

Supplier relationships with the public sector have come under increased scrutiny in recent years as tight supply chains, rising costs and higher sustainability demands have started to have an impact. The public sector understandably has stricter rules of engagement with its suppliers than other industries due to the critical nature of the work it undertakes, and the pandemic has only amplified this.

However, with the growing need to address broader planetary challenges, such as resource conservation and climate change, sustainable rules of engagement are creating new supplier dynamics.

Public sector ministries, whether health, defense or education, all have key sustainability goals to achieve. When companies provide a service, the key question they need to answer now is: how will what they provide contribute to achieving the sustainability and social goals of the sector? If they are unable to answer these questions, they will completely miss out on getting contracts and will likely lose the contracts they are already committed to.

For the IT industry in particular, there is one major objective that all vendors and partners should bear in mind when working with the public sector: Strategy for Greening ICT and Digital Services of Government 2020-2025. This strategic policy sets out how the government will work in partnership with industry and other sectors to deliver ICT and digital services to help achieve the United Nations Sustainable Development Goals, implement UK government 25-year environmental plan and help Meet the government’s net zero obligations and commitments.

The three rules of the ICT greening policy

We’ve seen the supplier landscape become more challenging lately, as new sustainability goals are added to the ongoing disruptions. Yet, as an industry undergoing digital transformation, there is a strong demand for reliable and high-performance IT in the public sector. As part of the government’s greening ICT policy, three business rules are set out that vendors are asked to follow to support the public sector and foster healthy relationships.

Sustainability is no longer an advantage, it is now an imperative for working with the public sector. Grounding every interaction in these rules will help organizations achieve their sustainability goals and ultimately ensure suppliers have a better chance of winning and keeping business.

Rule 1: become net zero in carbon

The public sector is in the spotlight when it comes to achieving net zero goals. With the government setting targets for other companies to follow, it is essential to ensure that it raises its own standards. The government’s current message about reaching net zero is a 2050 target, but continued monitoring of progress will likely mean increasing focus over the years. By eliminating Scope 3 emissions wherever possible through its supply chain, the public sector can make huge strides towards carbon neutral processes on the path to net zero.

Suppliers can help the public sector achieve net zero by decarbonizing their own processes, and using innovative procedures such as remanufactured hardware is a key way for the IT channel to achieve this. By adopting carbon-neutral processes, suppliers can help the public sector reduce Scope 3 emissions by cleaning up their supply chain, as well as contributing their knowledge and expertise on their specific sector. Using computer hardware that minimizes its impact on the planet is a good first step, with remanufactured technology now a leading alternative to brand new.

Rule 2: Create a circular economy

The long-term success of a sustainable public sector will ultimately depend on the development of a circular economy within its supplier base. Reducing carbon emissions in the short term is a priority, but long-term success will depend on a circular economy developed to reduce the stress that carbon reduction places on processes. The protection of natural resources is also a growing concern and carbon offsetting cannot go far in the long term.

Resource conservation should be the number one overall goal of a sustainable public sector, ensuring that the natural environment is exploited as little as possible, while extending the already scarce resources available to the planet. The circular economy is at the heart of this by reusing already produced resources and materials.

The role of the supplier in the future of public sector sustainability is not just to decarbonize its own heritage to support net zero goals, it adopts processes rooted in the circular economy. By creating a circular economy in which the public sector can operate, IT channel suppliers can improve delivery times, reduce the growing accumulation of electronic waste and positively impact their own bottom line by reusing old technology. .

Rule 3: Increase assurance in the supply chain

Reporting in public sector supply chains is now a top priority, both to ensure that environmental objectives are met, but also to ESG initiatives are respected. Lack of assurance is a major barrier to healthy supplier relationships, with public sector organizations demanding transparency about supply chains and needing confidence that they can meet demand.

However, while sustainability goals might be the most widely reported goal, cleaning up the supply chain goes beyond the E of ESG goals. Social and governance initiatives will be examined to ensure that forced, bonded and modern slave labor is eradicated from supply chains, as well as ensuring that products are not made from conflict minerals.

Operational resilience also remains a key factor in assured supply chains to protect the critical services provided by the industry. With the recent global chip shortage and pandemic delays, supply chains have shown that they are not bulletproof and cannot always keep up with demand. With the new rules of engagement, creating an assured, resilient and transparent supply chain can help suppliers not only win contracts, but also become reliable and trusted partners for the public sector.

With global disruption likely to continue, utilizing existing resources in the mountain of e-waste created over the past decades is a good place to start. And with the technology we have to create second-life hardware like new, that should be every vendor’s priority.

The Opportunity Lies in Sustainability

There is a huge opportunity for the IT channel to be the precursor to sustainable engagement with the public sector by adhering to the three rules outlined above. This will not only improve supplier relationships in the industry, but also help it achieve its sustainability goals. The public sector needs efficient and up-to-date technology as part of their digital transformation, but they want to do it in a sustainable way and on a tight budget.

The latest technologies and innovative processes such as refurbishment allow resellers and suppliers to support the sector through its three rules of net zero, circular economy and insurance. It offers both short-term returns in terms of cost savings and reliability of supply, as well as long-term investment in the sector through sustainability and circular economy processes.

Working with the public sector in a sustainable way is now a necessity and the IT industry should lead the way in best practice, but suppliers must either learn to adapt to meet the new sustainable rules of engagement or ask help to do so, otherwise they will end up missing out on getting contracts due to a lack of focus on sustainability goals.

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