--- title: Is the Centralised Procurement model providing better value? description: Does a Centralised Procurement model deliver better value? image: https://blog.prophetic-technology.com/hubfs/stefan-cosma-0gO3-b-5m80-unsplash.jpg --- [hello@psdtohubspot.com](mailTo:hello@psdtohubspot.com) [+91 8874569874](tel:+91%208874569874) Hours : Opens 10:00 AM To 07:00 PM [![logoHD](https://blog.prophetic-technology.com/hs-fs/hubfs/logoHD.jpg?width=2500&name=logoHD.jpg "logoHD")](https://www.prophetic-technology.com/) - [Home](https://www.prophetic-technology.com/home) - [Subscribe](https://www.prophetic-technology.com/pt-blog-subscribe-opt-in-consent?hsCtaTracking=174cc371-9cdc-4b94-a32e-9007f0ac4dea%7C0776642c-2604-4695-8e3f-f7a74f10031a) - [Contact Us](https://www.prophetic-technology.com/contact-us-old) - [procurement](https://blog.prophetic-technology.com/topic/procurement) # [Is the Centralised Procurement model providing better value?](https://blog.prophetic-technology.com/is-the-centralised-procurement-model-providing-better-value) Procurement needs to be present as a central part of value creation across the enterprise and operat... [Read More →](https://blog.prophetic-technology.com/is-the-centralised-procurement-model-providing-better-value) - [supply chain (286)](https://blog.prophetic-technology.com/topic/supply-chain) - [technology (138)](https://blog.prophetic-technology.com/topic/technology) - [logistics (81)](https://blog.prophetic-technology.com/topic/logistics) - [procurement (69)](https://blog.prophetic-technology.com/topic/procurement) - [optimisation (65)](https://blog.prophetic-technology.com/topic/optimisation) Posted by [Dave Food](https://blog.prophetic-technology.com/author/dave-food) on Dec 12, 2019 3:12:55 PM ![Dave Food](https://app.hubspot.com/settings/avatar/9fa060d35f0f962fafafe972c24035ae) Find me on: [Facebook](https://www.facebook.com/davefood) [LinkedIn](https://www.linkedin.com/in/davefood) [Twitter](https://www.twitter.com/davefood) **Procurement** needs to *be present as a central part of value creation* across the enterprise and operates supported by its executives. It is vital a widespread*-administrative recognition* and requires higher *investment in the role* of strategic **Procurement functions** to drive more exceptional contribution to the organisation. **Does a Centralised Procurement** **model deliver better value?** -         Many companies *are adjusting* their **Procurement** operating models *to reach better value* but, *only a few* often *review them* or make the necessary *adjustments to guarantee* that the company encompasses Procurement systematically. -         Most businesses around the world *advocate* for a more *centralised- operating model* to regulate *purchasing*, keep *spending* under *control*, and to generate *business processes* standards to empower *Procurement stability* and *value*, often reporting *the most significant value* building relating cost savings. -         The Supply Chain (**SC**) benefits are *often light* compare to those *accomplished via centralisation*. -         Few companies are taking their *centralised model* even further producing *management frameworks*, *shifting* more of the operations through *partnering*, and focusing on *internal customer management*, elevating **Procurement** to a *change-leadership role* where it provides *supervision, guidelines* and *sponsorship*. **We can find other *benefits* with a decentralised model:** ·       *More independence* in the business sections and regions, allowing them to identify innovative opportunities within their market. ·       Gaining more *flexibility* to reduce or increase business units according to the characteristics of given episodes.   ·       Indirect spend lies securely within **Procurement** activities, being regularly much simpler for them to handle. ·       *Developing countries* put a greater emphasis *on the role of* **Procurement** in diminishing bribery and fraud, demanding *regulatory policies* and *environments*. ·       The **Procurement** functions can more easily manage the combination of *sourcing, contracting, legal, operational and financial* expertise.  The Board, no doubt, would look to **Procurement** *for solutions.* ·       A Centralised **Procurement** is an excellent thing for *risk management* as its focus on *centralising the* supervision of contracts and supplier relationships, whilst *also staying aware* of local and regional risks.  **Procurement systems and technology investments** *Automation* and *technology* adoption is essential to improve **Procurement** value; both focus on getting the full benefits of systems and technology, particularly in business cases. Develop a *roadmap* for **Procurement** in perfect match with the *corporate IT strategy* and *architectur*e; offer broad-easy-access for user's interfaces to support activities such as *on-line catalogue ordering* and *raising purchase requisitions*. However, **Procurement** must do more *to promote the use* of technology in the *creation*, *capture* and *management* of contracts throughout their life, to drive cost savings, improve cash flow, manages supplier relationships at a strategic level, and mitigates risk. To be succesful, Procurement needs *to make a shift* toward *direct spend* at the heart of the business, but most advances aim to get the *maximum value* from their technology investment. So, **Procurement** should *grab* this opportunity taking *the initiative in risk management.* Procurement professional *must function as principal* *controllers* who retain the risk agenda, *pulling in* the significant *knowledge from other sections* of the company *when needed*. It will guarantee to meet all the requirements of *interested parties*. **Procurement** will also need to gain *better visibility of the company requirements* to understand how *individual contracts* are structured to make operational changes if required. The *low per cent of spends* in management and contracts *point out* that a *large part* of the supply base *stays out* of **Procurement** reach. This situation is remarkably *worrying* as **Procuremen**t cannot keep *risk healthy* if not *close to* particular *suppliers* and their *corresponding contracts*. **Procurement** must have the power *to pinpoint where risks broaden* *into billing* or *lacking reporting accuracy*; **Procurement** can *play a more prominent role in watching over* the enterprise risks/benefits.  **CPOs** *have to mature* before taking essential functions in the organisation risk management strategy. **Summing up:** focusing on developing a **Centralised Procurement** *soft skills* and *relationships* with *customers* would allow Procurement to move up the value chain.  *Technical training* and *IT investments* are unlikely to deliver value without *proper business engagement*. Some of the more transactional duties *can be automated*, allowing functions to focus on more *strategic responsibilities* and thereby, deliver a *more significant contribution* to business performance. *The opportunity for **CPOs** is now considerable!*   **Dave Food** [Prophetic Technology](https://www.prophetic-technology.com/) **Subscribe to our emails & exclusive free content.**   **[![I want to subscribe](https://no-cache.hubspot.com/cta/default/2979069/174cc371-9cdc-4b94-a32e-9007f0ac4dea.png)](https://cta-redirect.hubspot.com/cta/redirect/2979069/174cc371-9cdc-4b94-a32e-9007f0ac4dea)** - [procurement](https://blog.prophetic-technology.com/topic/procurement) - - - ## Post Your Comments Here #### About Us Prophetic Technology is a team of dedicated people that combine their expertise in business domains with a passion to release potential.s every page it appears on. 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