The Benefits Of Merging Both Distributed And Centralized Procurement
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Both large and small organizations will understand the benefit of having a centralized procurement model. Effectively a small bunch of managers are responsible for the purchases of a wider group. This allows both audit and control 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 fix that issue ? One wants the efficiency of a large group of people doing a large number of transactions but with the control/oversight of a smaller group monitoring them.
The answer is to employ a system of controls by way of a procurement software system. Recent deployment exercises have shown big paybacks in rolling out Enterprise wide procurement solutions like SAP or Oracle or even Great Plains where such a solution allows users, perhaps scattered globally around the world, to be able to enter their orders but have them approved by a smaller group of empowered line management.
Conceivably this allows the best of both worlds where the requesters are responsible for their own requests and the follow-up thereof but the approving VP's and managers can have oversight of their available budgets and either approve the requests or deny them back to the requestors for resubmit.
Such a closed loop approach has been proven to be of benefit to the business's P&L bottom line and allow for significant cost cuts in operational expenses.
Article Source: Articlelogy.com
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