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OpenGov Jumps Into Procurement With Startup Acquisition

OpenGov is acquiring ProcureNow, a five-year-old startup, in order to expand its offerings so government customers can run budgeting, procurement and financial operations all using the same vendor.

OpenGov is getting into government procurement.

The company is acquiring ProcureNow, a five-year-old startup offering cloud-based procurement software to the public sector. The move will add a fourth pillar to OpenGov’s enterprise resource planning portfolio, which already covers budgeting, financials and digital services, solidifying the company’s ability to serve government agencies through many of their administrative operations.

“A government can come to OpenGov and say, ‘Listen, we've got to modernize our entire tech stack. I want to buy the OpenGov ERP, and we should put together a big deal and a full plan and a project management road map and do this whole upgrade of our entire city system,’” said Zac Bookman, CEO of OpenGov. “A city or county could also come and say, ‘You know what? I need one suite. I'm doing our budget in a 400,000-row Excel spreadsheet. Can I buy your budgeting and planning suite? I don't need the other stuff right now.’”

The move comes at a unique moment for government procurement. Agencies across the country — indeed, the world — found themselves scrambling to buy things during the pandemic that they’ve never had to worry about before. Some needed protective equipment to allow people to do their jobs while minimizing the risk of COVID-19, others needed thousands of Wi-Fi routers or laptops. And now, as the pandemic appears to be receding in the U.S., they’re navigating ways to either transition employees back to the office or make remote work more of a permanent fixture.

Thanks to stimulus dollars from the federal government, they’ve also got funding to make those purchases.

“What we're seeing across the country is procurement officers may have been kind of neglected; they've been relegated to paper and pen and Word documents, and having to stitch together big RFPs or bids, and score using PDFs and duct tape and bubble gum,” Bookman said. “And they're completely overwhelmed, and they've never had to buy so much in so many varied ways and areas. And they basically never needed a system so badly as they do now. And so I think there's a massive influx of buyers or upgrading of systems going on in the procurement space.”

David Gertmenian-Wong, CTO and co-founder of ProcureNow, sees his company’s product as being a bridge between OpenGov’s existing budgeting and financials suites.

“We kind of sit right in between those systems: Budgeting comes in on the front end — that's where governments get their budgeting to do these procurement projects,” he said. “And then we go out to bids, and that's where our system comes in. They'll do their bidding in ProcureNow, they'll do their … awarding and their contracting in ProcureNow, and then you can kick it back over to financials where some of the general ledger entries happen.”

That modular approach — offering software that governments can buy a la carte, but that work well together — is becoming a popular growth strategy among gov tech companies, with businesses such as Granicus, CentralSquare and CivicPlus all acquiring smaller companies to make it happen. From a business perspective, it allows gov tech companies to sell one piece of software to an agency and then make the case for adding more over time.

ProcureNow, Gertmenian-Wong said, differentiates itself from other government procurement solutions partly through its emphasis on data. For example, it offers a searchable library to its customers of the work its other customers have already done, making it easier for an agency to build an RFP.

“A really common one was PPE equipment — over the last year, unfortunately, that was something a lot of customers were looking at,” he said. “So they could go into our scope of work library and look up how are other governments defining the requirements for vendors for PPE requirements. They could also just go and view that particular opportunity, and get the contact information for whichever government had posted it, give them a call, you know, just interface that way.”

As governments figure out how they will move forward after the pandemic — and modernize to meet new demands from both the public and its own workforce — Bookman said he anticipates a strong appetite for the kind of cloud-based software suites his company has put together.

“This is an extraordinary opportunity for our nation's governments to upgrade their systems to modernize and to bring the cloud with them, and so we're just getting focused on building organically and inorganically to be the premier cloud-based ERP provider,” he said.
Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.