Using a centralized approach eliminates the risk of employees going outside of the existing procurement process to prevent maverick spending before it can occur in the first place. The early stages of developing policy and procedures may cause delays in receiving items that are needed.
With a center-led structure, the purchasing department develops purchasing policies and standard operating procedures but allows each department or division to maintain their daily purchasing duties and responsibilities. For many organizations, a centralized purchasing department makes the most sense.
With a decentralized purchasing structure where individual departments are responsible for their own purchasing, businesses often end up paying more as a result of their inefficient processes.
When a business perceives greater importance on centralized purchasing, it improves visibility within the organization and makes means they’re more likely to participate in long-term strategic planning. By building procurement initiatives into your long-term goals, your business’s financial success automatically links to your procurement goals.