More Authority for Purchasing
CAPS has a clear agenda. Namely, it believes that companies will lower their spending on services if they involve their procurement specialists in services-spend decisions. Dianna Wentz, a CPM writing for the Institute for Supply Management, states this position as follows:
Purchasing departments have little or no control over services spend. In the 39 ser-vice categories studied, only 3 of the services were “managed, controlled, or other-wise influenced” by procurement staff. Purchasing had no control over the procurement spend of the remaining 36 service categories, which included areas such as information technology, facilities management, and telecommunications. This fact is perplexing, since approximately 54% of an organization’s spend is fo-cused on services, yet only 27% of those service purchases flow through supply management.
There are advantages to centralizing services procurement within an organization. Centralization, for example, does alleviate maverick spending. Further, companies that centralize service procurement are better able to leverage their volume. Nonetheless, controllers, as a practical matter, are not in a position to advocate the shifting of services-spend management to procurement.
