Centralized procurement sounds ideal. One location managing most, if not all, of an organization's purchasing decisions.
Anyone who has had to function within a decentralized procurement system knows the downsides. There are more Requests for Proposals (RFPs) to issue, more suppliers to manage, and more maverick spending to monitor. In other words, there's just more chaos.
But making the switch isn't always straightforward. Or easy. If you can't decide if moving to centralized procurement is worth the trouble, check out the infographic below. It explains the pros and cons so you can determine if it's right for your business.
For a more in-depth guide to centralized procurement, read this article.
Centralized Procurement Pros & Cons Infographic
See the full-size infographic here.
Bottom line, which is better, centralized, or decentralized procurement? Ultimately, it comes down to how much control and transparency you want. Because while there are some cons to centralized procurement, there are more benefits. And fewer risks.
The good news is, you don't have to choose. Consider leveraging a center-led structure. It allows you to centralize the bulk of your purchasing process, while still maintaining autonomy around time-sensitive commodities.
The key is to know all of your options. Too many procurement professionals get stuck in a cycle of doing things the way they've always been done and taking the path of least resistance. It's understandable, but it won't help you deliver more value.
If you're interested in learning more about the benefits of consolidating your purchasing, we'd love to help. We save businesses like yours an average of 22% on indirect spend. Learn more.