Procurement Governance Review:
The link between corporate governance, the organization of other functional departments and operational management of procurement
Optimising the procurement governance structure typically impacts highly sensitive parts of a companies leadership structure. However, a world-class management structure provides competitive, quality and cost advantages for those firms that invest in getting this right:
- consistent, management-by-objectives and controls
- faster, more transparent and more sustainable decision making
- facilitates effective collaboration with internal and external stakeholders
- reduced business risks and increased compliance with requirements
- continuous improvement of procurement services
We use the terms procurement governance and procurement organization interchangeably. The focus is on decision rights. The “who ” and “how” of decision making in the context of corporate and procurement strategy, including; integrated management systems and interfaces with other departments.
Only an effective procurement governance and organization enables continuous performance improvements of the organizations effectiveness in procurement.
Typical applications of a Procurement Governance review, are:
- Design, establishment and optimization of a Procurement Board
- Centralization vs. Decentralization of a strategic, tactical and operational procurement
- Pooling the Procurement organisations Governance from various companies or subsidiaries
- Integration of risk, compliance, quality, CSR, and management systems, etc.
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