Both large and small businesss will recognize the beauty of having a centralized procurement model Effectively a small group of people are responsible for the purchases of a larger group. This allows controls and audit to be efficiently handled and allows compliance with issues like the Sarbanes-Oxley laws.
Of course, there are drawbacks as this model has the effect of placing a large number of transactions into a constricted data pipe effectively throttling the bandwidth of the purchasing department.
So how to get around that issue ? We want the efficiencies of a large group of people performing a large number of transactions but with the oversight of a smaller group monitoring them.
The resolution is to use a system of data control by way of a procurement software system. Recent exercises have shown large paybacks in rolling out Enterprise wide professional procurement solutions like SAP or Oracle or even Great Plains where such a solution allows users, mostly in place around the world, to be able to enter their requisitions but have them approved by a smaller group of approvers.
Conceptually this allows the best of everything where the users are responsible for their own orders and the management thereof but the approvers can have control of the available budgets and either approve the requests or reject them back to the originators for a redo.
This closed loop approach has proven to be beneficial to the bottom line and allow for serious cost reductions in operational expenses.
About the Author:
Illy DeSouza is a graduate of the Institute of Management specializing in business performance metrics and a vice president of online procurement at a large private company. Read more articles on Procurement Software and check out one of the many systems he has used eProcurement System mentioned here.
Get all the information and photos:: http://coringa.info/finance/the-benefits-of-merging-both-distributed-and-centralized-procurement
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