Procurement Centers of Excellence and It’s Value to Organizations

by Obella Marie D. Ronsairo and Francis J. Custodio, JUNE 2021

A Procurement Center of Excellence is a means of establishing a central management team that is responsible for managing the sourcing of goods and services on a global level.

Procurement Centers of Excellence Improve Overall Expertise

Centers of Excellence will typically play quite a holistic role within the organization, taking on responsibilities such as advising on the implementation and use of new technology, undertaking research, providing training to employees, and, according to Cleverism, providing “a focal point for knowledge management”. While that might all sound a bit vague, broadly speaking it simply means that the purpose of a CoE is to improve overall expertise in certain areas of an organization and use its resources most effectively to help it improve.

Photo by Sigmund on Unsplash

The Center of Procurement Excellence will also draw on the expertise of cross-functional teams that can provide insights into areas such as compliance, risk, and services. For example, this could include getting an insight into what goods and services should cost and when they will be delivered, to ensure that projects are delivered on time and budget and provide the best value to your organization.

Procurement Centers of Excellence Promote Greater Collaboration

The reason why many organizations have either established (or are looking to establish) Centers of Procurement Excellence is that they aim to promote greater collaboration and also promote the use of best practices that will ultimately produce better results.

Photo by Sora Shimazaki on Pexels.com

This can include the introduction of new procurement methodologies, overseeing training and skill assessments, encouraging shared learning and the sharing of information, and working towards building a team that has common procurement goals that are supported by cross-functional insights.

One of the advantages of putting a Procurement Center of Excellence in place is that it can help to support the creation of flexible supply chain processes that can be tailored at a local level, where requirements may differ from one region to the next (e.g. regarding regulations and laws).

Things to consider when building a Procurement Center of Excellence

When it comes to planning out and building a Procurement Center of Excellence, there are steps you should take in the project’s early stages to improve your chances of success.

You need to have a clear idea of what your goals are and how the sourcing center of excellence is intended to add value to the wider organization.

You also need to take into account the ability to scale up its operations over time, how this can be achieved (e.g. through the use of tools such as automation), and how you plan to report on its results to key stakeholders.

As William Atkinson states in this piece for SupplyChain247, “procurement excellence means aligning procurement strategies and programs with the overall objectives of the organization, helping everyone to align with those objectives, and managing the risks that are inherent in the procurement processes.”

Given the Center of Excellence’s role and position within an organization, straightforward communication and collaboration between the central management team and other areas of the business must be always taken into account when establishing a Procurement CoE.

Source:

Procurement Centers Of Excellence – How They Benefit Organisations (hicx.com)

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About the writer:

Obella Marie D. Ronsairo. Loves to feature life and see the beauty of every side of the stories. Have been with the newsletter team for almost two years since becoming part of the MPTSouth family. Gained a lot of fun, experience and knowledge through this growing team and helped her to develop more of her skills in writing and creativity.

Francis J. Custodio. Is a Industrial Engineer who loves to think outside the box.  Also like the saying “Work Smart not Hard”. Always curious and that curiosity led him to join the Southlink Newsletter. Loves to know “what make things tick”.

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