Does devolved procurement encourage ‘maverick’ spending?

A recent study suggests that procurement professionals are concerned about the amount of spending power given to non-procurement colleagues.

According to the research conducted by Supply Management and Expense Reduction Analysts, 71% of procurement experts cited a lack of knowledge about what non-procurement colleagues spend as one of their biggest concerns.

Respondents’ suggestions included:

  • More training in place to help everyone understand the procurement process (34%)
  • Giving procurement experts more control over indirect spending (31%)
  • Streamlining the number of suppliers (16%)

The results also revealed that many feel there is a lack of understanding among stakeholders about the importance of procurement expertise when it comes to managing indirect spending and guarding against so-called ‘maverick’ spending.

Almost half of those surveyed noted that stakeholders were not invested in the process, while there are also problems with a lack of understanding about indirect spend, poor reporting and misclassified items.

Potential solutions outlined here were:

  • More procurement experts at boardroom level (47%)
  • A better understanding of what each department spends (42%)
  • More training for key stakeholders (36%)

Would a more centralised structure help?

The advantages of devolved and centralised structures has long been a key debate among procurement experts, with strong opinions on both sides.

While a centralised system may be perceived as giving more control to the procurement experts within an organisation, in practice a devolved set-up can prove just as productive. For example, a marketing team may be perfectly placed to carry out their own procurement work if they have a thorough knowledge of the vendor landscape and are clear on what the required outcome should be.

In that respect, it can be a sensible idea to analyse your requirements and work out which tasks to keep within the procurement team and which ones to devolve to others with the necessary expertise.

It is certainly the case that organisations need to be placing greater importance on their procurement strategy, and bringing in experts to oversee and take ownership of these processes is a decision that could yield great rewards.

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