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PMOs and CoEs Are Bad: Procurement Myth No. 6

We continue our series on the top 25 procurement myths. Some you may know, others maybe not. You also may agree with us on certain ones and not others. But, the important thing is that we have this discussion. We will post 1 a day here on Chief Procurement Officer, so make sure to check back on the site to catch them all.

6. PMOs and CoEs are just as bad as shared services

Bureaucracy breeds inefficiency. Most procurement professionals like neither. So, when it comes to Project Management Offices (PMOs) and Centers Of Excellence (CoEs), you can't blame procurement for viewing these concepts with a level of suspicion. But, both are valuable if done right and if not over-engineered.

PMOs merely provide visibility into current and planned projects so that you can better coordinate them and the resources used in them. You don't need to have a separate organization, but you do need the capability. Luckily, the best procurement application suites allow some level of procurement project portfolio planning tracking, mostly from a savings planning/tracking standpoint, but we expect better resource planning to come eventually. PMOs are also useful for procurement to peek into when they sit elsewhere such as in IT to gain visibility into upcoming stakeholder projects.

For more on procurement PMOs, see here.

Centers of excellence are really about assigning accountability to capability building rather than process/service performance. Capabilities include technology (e.g., an e-sourcing CoE to help everyone run better events), training, market intelligence, benchmarking and so on). Again, you don’t need a separate organization, but you do need to establish CoE’s formally in order to provide accountability and adequate resources.

For more on procurement CoE’s, see here.

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