Category management: Industry’s role in the alignment of speed, need and saving money

We held a WT industry day on category management that featured a keynote session by Bill Zielinski, deputy assistant commissioner for category operations at GSA.

The General Services Administration and the Office of Management and Budget have been pushing category management as way for the government to get a better grip on what it spends and to standardize government buying as much as possible.

As Zielinski explained in a follow-up Q&A after the event, GSA is trying to align “federal buying behavior with the markets and industries from which we buy.”

He said he wants the relationship with between government buyers and industry to move away from being adversarial and toward a relationship that is more collaborative.

So how can industry and government reach that collaborative relationship?

Part of what needs to be done lies with government, Zielinski said.

The category management framework should help agencies increase market research and communications with suppliers, which should increase competition, he said.

All the government wide categories have supplier relationship management programs including the IT category, Zielinski said.

“A SRM program … will strengthen feedback and relationships with our suppliers,” he said. “This is the first time the federal government has attempted to create a program on a government wide scale and it represents a major commitment in aligning federal buying behavior with the market.”

He wants to build on the communication and interaction his group currently has with industry through forums and other channels “to ensure we have two-way communication with our industry partners,” he said.

The category management framework also allows for the collection of data on what the government purchases. The goal is to get smarter about what and how the government buys, monitor contract compliance and the performance and delivery of suppliers, Zielinski said.

Updating industry along the way also is part of the plan, he said.

So far GSA has seen great success through category management efforts, including $2.1 billion in savings since 2009. In some cases, they’ve seen prices drop 50 percent for commodity items, he said.

“We’ve seen increased adoption of category management practices from many agencies,” he said. “This means better understanding what’s being spent, who it’s being spent with, and how the agency is contracting for their needs.”

GSA also is getting smarter about how it uses the data it collects on purchases and is trying to be more strategic in it how it communicates and collaborates with its customers and with industry, he said.

One success story he told was a new government side enterprise software agreement it reached with Hewlett Packard Enterprise Software and its partner Carahsoft.

The government now has a “robust” offering of many HPE solutions and it can realize a discount of up to 39 percent over commercial pricing. There is potential for savings up to $50 million over five years, he said.

Zielinski said he is looking for ways to incorporate new and innovative technologies into category management and he named that as an area where vendors can help.

“Our partners tell us they are often inhibited from applying more innovative solutions to our problems because of impediments that are related to how we buy goods and services from them,” he said. “Through IT category management, we are interested in removing as many of these barriers as possible. And, aligning our focus on key markets and industries should improve our ability to acquire and utilize innovations in business models and technologies because these are often specific to an industry or category.”

For the coming year, Zielinski said he is focused five priorities:

1)      Improve agency mission delivery and citizen experience through improved use of technology.

2)      Support agencies in FITARA implementation.

3)      Develop subcategory strategies that enable government to improve what and how it buys IT.

4)      Improve the speed and efficiency of the acquisition process

5)      Improve the quality and availability of management information, including expenditure data, supplier performance, technology trends, and agency compliance with policies / legislation.

“So, you can expect efforts and changes to tackle those areas,” he said.