Structuring Procurement – to centralise or decentralise?

Hands up who knows what ‘CLAN’ means?

Ten procurement points for everyone who said "centre-led action network".  That was the organisational design concept developed by Dr Richard Russill some 20 years ago, an idea that was very influential when many large organisations were going through their first real attempt to professionalise procurement and organise themselves across a complex corporate structure.

The idea of CLAN was to put in place a small procurement central team (including a CPO or equivalent), with most procurement activities then devolved around the organisation. However, lead buyers in different business units would take the primary role on particular spend categories, with co-ordination through the network. A few years after CLAN's introduction, I came up with the concept of SCAN - the strategically controlled action network. This was a variation on CLAN with more real power given to the centre to ‘control’ rather than ‘lead’.

More recently, our perception is that another dimension has been added to this debate. It is not just about how we allocate power and responsibility around the procurement function: we have recognised how other stakeholders (service users, budget holders and the like) also play a key role in the procurement process. So the questions are not just about centralising or devolving power to procurement people, but also around the role and power of stakeholders in relation to procurement activities, and the wider governance and management issues that arise from that.

Technology is THE big driver of change here, in our opinion. Better and easier to use technology is making it more feasible for users to execute more of the overall procurement process successfully without becoming procurement 'professionals' themselves. So senior procurement leaders need to respond to that, as it brings both real opportunities and some challenges.

We’ve covered some aspects of these key issues in our new briefing paper, Centralise or Devolve Procurement – Why Not Both?  It is sponsored by Comensura, the leading provider of managed services in the contingent labour market (but written as always from an independent perspective).

Comensura are at the ProcureCon Indirect conference in London this week, so if you are going to the event you can pick up a hard copy of the paper from them directly and be the first to read it. If you're not at ProcureCon, we’ll have the paper available here later this week for download, free on registration (here it is!) . And we'll come back with some excerpts from the paper over the next few days.

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Voices (2)

  1. jamie Fry:

    Hi, can you put a link to the briefing paper above. Thanks
    (PS. Your site is not working properly with IE but okay in Chrome.)

  2. James Wilson:

    Hi Peter

    Thanks for this great article !
    Procurement needs to be done with a proper strategy.

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