Procurement departments 'still acting alone'

1 March 2006
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01 March 2006 | Anusha Bradley

Purchasing departments continue to operate in "silos", with over half failing to fully integrate into their organisation.

That is one of the findings of a research study by Bristol Business School, commissioned by Oracle, CIPS and the Office of Government Commerce.

It questioned 171 procurement chiefs (53 per cent from the private sector and 47 per cent from the public sector) in 15 categories, including their role, spend influence, use of technology and communication with colleagues.

While 93 per cent of businesses had a formal purchasing department, just under half had buyers with specialist commodity experience.

Andrew Douglas, senior procurement specialist at Oracle, said this was significant because departments with this experience were more likely to have greater market knowledge, better supplier relationships and achieve greater savings than generalist buyers. It was also an indication of investment in professional development, he said.

Only 18 per cent of public sector respondents had a seat on the board, compared to 37 per cent of those in the private sector.

And over half did not collaborate with finance and IT. Douglas said this corresponded to only half having a joined-up purchase-to-pay system with finance, and a mere 13 per cent having a fully-integrated P2P process.

However, Douglas said communication and integration between functions was "not just a procurement problem" but a general business problem.

The full study, I-INNOVATE, and an assessment tool, which enables purchasers to compare their department with those of their peers, can be found at www.oracle.com



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