Hidden gems: Saving time, money in municipal operations

In today’s municipal landscape, Canadian local governments face tighter budgets, growing workloads, and increasing administrative complexity. Yet opportunities exist to significantly reduce costs and save time, especially for those in procurement, operations, facilities, and finance.

By leveraging innovation, strategic partnerships, and modern technologies, municipalities can unlock new efficiencies that benefit both staff and residents. Here are four practical strategies that can help municipalities streamline operations and achieve measurable savings.

Collaborate with Innovators

The City of Norfolk, Va. offers a model for public-private collaboration that Canadian municipalities can emulate. Its “Innovation Corridor” initiative creates ecosystems where government, businesses, and anchor institutions co-develop solutions to complex issues like operations and infrastructure resilience.

At the core is a shared governance model, a structured, long-term approach that treats suppliers as strategic partners rather than just vendors. This has attracted tech companies and created local jobs.

Canada’s own innovation potential is significant. With 28 regional innovation hubs listed by Canada’s Tech Network, municipalities can partner with startups to co-create solutions – often at little or no cost – while helping test new concepts that address pressing local challenges.

Unlock Efficiency with GPOs

Group Purchasing Organizations (GPOs) represent perhaps the most significant opportunity for Canadian municipalities to save both time and money while reducing administrative burden. The concept is simple: By aggregating purchasing power across multiple organizations, GPOs negotiate better prices than individual municipalities could achieve independently while providing pre-negotiated, trade-compliant contracts that eliminate the need for lengthy request for proposal (RFP) processes.

The time savings potential is transformative. Municipal procurement teams typically spend 15-40 hours developing responses to individual RFPs, according to industry estimates. When municipalities leverage GPO contracts, they can bypass this entire process while accessing competitively negotiated pricing. For departments that issue multiple RFPs annually, this translates into hundreds of hours of staff time saved that can be redirected toward higher-value activities.

The compliance benefits of GPO participation are equally valuable. All GPO contracts undergo rigorous competitive bidding processes that meet or exceed local procurement requirements and comply with relevant trade agreements, including the Canadian Free Trade Agreement. This built-in compliance reduces legal risks while ensuring transparency requirements are met without additional administrative overhead.

Cross-departmental collaboration multiplies the impact of cost-saving initiatives. When procurement, facilities, and finance departments coordinate their efforts through shared GPO contracts and integrated supplier relationship strategies, the cumulative benefits often exceed individual department savings.

Utilize Strategic SRMs

Traditional procurement often stops at selecting the lowest bid. But forward-thinking municipalities are turning suppliers into strategic partners through Supplier Relationship Management (SRM), leading to deeper collaboration, innovation, and resilience.

Benefits of SRM include:

• Operational insight: Suppliers can recommend improvements that reduce costs and enhance service.
• Risk reduction: Strong relationships lead to faster issue resolution and fewer disruptions.
• Performance-based results: Strategic contracts incentivize suppliers to continuously improve and innovate.
• Municipalities can also outsource administrative SRM tasks, freeing staff to focus on high-impact initiatives.

To get started, review existing contracts and prioritize the top five spending categories. Then initiate regular review meetings with key suppliers. Finally, look for quick wins like added services, better delivery or bulk discounts.

Harness Artificial Intelligence

Artificial Intelligence (AI) is already transforming how Canadian municipalities manage procurement and operations.

Winnipeg’s AI-driven invoice automation is a standout example. By using optical character recognition to extract invoice data and integrate it with finance systems, the city expects over $730,000 in savings, thanks to reduced manual entry, fewer errors, and faster processing.

Other AI-driven tools are automating:

• Monitoring of procurement portals
• Classification of relevant RFP opportunities
• Auto-populating RFP responses based on internal data

These tools can reduce the supplier’s proposal development time by up to 60%, with potential savings passed along to municipalities.

AI implementation should start with pilot projects focused on specific pain points such as invoice processing or contract management. Many AI vendors offer municipal-specific solutions with built-in compliance features and integration capabilities designed for public sector environments.

Moving Forward

The path forward for Canadian municipal employees lies in embracing these proven strategies while maintaining focus on resident quality.

By leveraging group purchasing power, developing strategic supplier partnerships, learning from innovative approaches like Norfolk’s collaboration model, and selectively implementing AI technologies, municipal departments can achieve the dual objectives of reducing costs while enhancing operational efficiency. The key is starting with manageable initiatives that demonstrate value quickly, then building momentum for larger transformation projects that can deliver substantial long-term benefits for both municipal operations and the communities they serve.

To learn more about how GPOs can help mitigate the supply chain brain drain, contact Gerald Ford at gerald@kineticgpo.ca.

Gerald R. Ford is a supply chain management professional with more than 40 years of experience. He has worked and consulted for more than 100 different organizations and businesses both in the private and public sector.