On Spend Matters, Peter Smith recently made interesting observations about the growth of Procurement influence. He suggests that two major factors have raised its profile and purpose, one being the dramatic growth of external spend (largely driven by outsourcing) and the other being globalization. Each of these has taken organizations into uncharted waters, stretching internal skills and experience and exposing unfamiliar risks.
One obvious effect of this shift has been the centralization of most Procurement functions, as management realised the importance of greater controls, more consistent policies and the consolidation of spend in a group outside the control of individual business units.
But as Peter points out, spend volume cannot go on increasing for ever and many of the risks associated with global procurement are becoming better understood and managed. So what is the next big thing that will maintain the influence of the Procurement function – or isn’t there one, was this growth…
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