Ryan Galiotto

Both large and small businesss will recognize the beauty of having a centralized procurement model Effectively a small group of people are responsible for the purchases of a larger group. This allows controls and audit to be efficiently handled and allows compliance with issues like the Sarbanes-Oxley laws.

Unfortunately, there are drawbacks to this model as it can have the effect of funneling a large number of purchase transactions into a narrow pipe effectively throttling the efficiency 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 resolution is to use a system of data control by way of a procurement software system. Recent exercises have shown large paybacks in rolling out Enterprise wide professional procurement solutions like SAP or Oracle or even Great Plains where such a solution allows users, mostly in place around the world, to be able to enter their requisitions but have them approved by a smaller group of approvers.

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.