By implementing centralized purchasing, an organization can considerably improve its efficiency, cost savings and control, and regulatory compliance. By centralizing purchasing, businesses can shift the purchasing authority from individual stakeholders and departments or locations to the procurement team.

This strategic shift in the purchasing power will help standardize purchasing processes and offer better control over spend. Here’s how organizations can go about implementing a centralized purchasing system.

• Perform an in-depth spend analysis to understand what each department is purchasing, from whom, and at what cost and frequency.
• Learn the existing problems in the purchasing process and set clear goals to overcome the current process inefficiencies.
• Once the current state is assessed adequately, it is time to develop a team and define the roles/responsibilities of implementing centralized purchasing.
• The next step is to create a comprehensive procurement policy while standardizing all purchasing activities across the organization.
• Often overlooked yet crucial step in implementing a procurement system is investing in a procurement platform that can automate workflow, foster team collaboration, track procurement KPIs, and help collect feedback.

Although it may demand a considerable investment, stakeholder buy-in, and change management issues, implementing centralized purchasing can increase the purchasing power, enhance spend visibility, and eliminate procurement challenges, once and for all.