Items to compare Centralized Hybrid Center-led De-centralized

Strong, unified pofessional Procurement Central Procurement Center of Excellence + Adequately sized,
Procurement organization Separate Procurement organizations
organization structured local teams
Solid line reporting to corporate Head of Dual reporting of local personnel to local management and to Dotted line reporting to corporate Head of
Procurement reporting lines
Procurement corporate Head of Procurement Procurement

Policies & Processes, Best Rapid adoption of best practices, policies Best practices, policies and processes are centralized and Difficult to implement coherent best practices,
practices and processes redistributed / enforced through the Procurement network policies and processes
Taken centrally with the intent to deploy Proposed by COE until Consensus is reached with BU's and local
Strategic sourcing decisions Only local tactical decisions
locally Operations
All Categories are managed centrally, even Strategic categories are managed centrally by multi-functional
Category management No Category Management
those which are ill suited teams and coordinated locally by a Category Network
Supplier Relationship
SRM easy to design, difficult to implement SRM coordinated centrally and deployed locally No SRM
Management

Best for economies of scale, leverage and Consensus always on the sharp edge to centralize or decentralize Less economies of scale and leverage, weaker
Economies of scale
results purchases cost reduction results
Informaion and Knowledge Information and knowlede are centralized and redistributed Some degree of information / knowledge
Information and Knowledge are centralized
sharing adequately through the Procurement network sharing, coordination and collaboration

Centralized, possibly in dedicated Shared Usually decentralized locally or performed in regional Shared
Transactional activities Performed locally, close to Operations
Service Centers Service Centers sized according to number of transactions
Issue resolution Slow local issue resolution, unawareness Issues are dealt with at the appropriate level. Reaction time Fast reaction time / issue resolution due to
Speed of issues increasing reation time depending on flow of information across Procurement Network proximity

Internal clients feel underserved under Overall satisfaction due to concensual strategic co-decisions and High local satisfaction due to complete
Organizational satisfaction
centralized strategy. Hostility among teams relative local empowerment, autonomy and control empowerment, autonomy and control
Accountability Procurement accountable to whole BU's accountable for their respective
Dual accountability from budget elaboration to final results into P&L
Performance management organization and to each Business Unit Procuremet performance
Size of Procurement More personnel required to achieve objectives
Disproportionate central team Good balance between Center of Excellence and local teams
Departement due to duplicate positions
Systematic and coherent risk management across the entire
Risk management Risk management with strategic suppliers Focus on availability of goods and services
organization
Critical success factors, ease of Usually only possible with strong, highly Strong leadership and alignment of objectives among COE, BU's and
Meet / Beat the budget in all BU's
implementation respected CEO and EXCO local Operations. Head of Procurement at same level as BU Leaders

KPI's Calculated savings, Cost avoidances Revenue, Cost of Good Sold, procurement index ROI, ROSMA, QCDI QCD within planned budget in BU's