Centralised vs Decentralised vs Hybrid Procurement: Which Model Delivers the Best Outcomes?

Which Procurement Model Delivers the Best Outcomes?

Centralised vs Decentralised vs Hybrid Procurement

When it comes to procurement, the way your organisation structures its function can make a world of difference. In our research, featured in Procurement as the Guiding Light, we explored how centralised, decentralised, and hybrid procurement models impact maturity, effectiveness, and strategic alignment. The findings are clear: structure matters.

Centralised Procurement: The Strong Beam of Light

Centralised procurement teams act as a single, powerful beam of light, providing greater oversight and deep expertise in process and policy. These teams are dedicated, which means it’s easier to set standards, share knowledge, and ensure consistency and compliance across the organisation.

The data shows that organisations with a centralised procurement model achieve the highest scores across all three key capabilities:

• Leadership and Strategy: Centralised teams are proactive, strategic, and closely aligned with organisational goals.
• Governance and Assurance: Robust frameworks and systems are in place, making risk management and compliance straightforward.
• Business and Industry Engagement: Strong supplier relationships and market engagement are the norm.

In short, investment in dedicated resources pays off, supporting higher procurement capability maturity.

Decentralised Procurement: Flexibility with Challenges

Decentralised procurement teams are more like a constellation of smaller lights spread throughout the business. This model leverages business-specific knowledge and offers scalability, allowing processes to be tailored to individual outcomes. The flexibility can be a real advantage in fast-changing or complex environments.

However, decentralised teams face challenges in maintaining strategic alignment and consistent engagement. The research found that decentralised models score lowest, particularly in business and industry engagement. Without a unified approach, organisations risk duplicated effort, inconsistent standards, and missed opportunities for collaboration.

Hybrid Procurement: Finding the Right Balance

Hybrid models blend the strengths of both centralised and decentralised approaches. In a hybrid setup, some activities – often high-value or high-risk work – are managed centrally, while others are handled by business units. This offers a good mix of control and flexibility, but requires clear roles, strong communication, and a shared understanding of what “good” looks like.

Within hybrid models, “mostly centralised” teams slightly outperform “mostly decentralised” ones, especially in governance and assurance. The key is to ensure expertise is shared and everyone remains aligned, so no one is left navigating alone.

What Does the Data Say?

The research is unequivocal: centralisation supports higher procurement maturity, while decentralisation may limit strategic and engagement outcomes. Hybrid models can offer a middle ground, but only if roles and responsibilities are clearly defined and collaboration is prioritised.

Figure 3 (see below) from the Procurement as the Guiding Light illustrates:

• Centralised teams score highest in leadership, governance, and engagement.
• Hybrid teams perform better when they lean towards centralisation.
• Decentralised teams lag behind, especially in business and industry engagement.

Choosing the Right Model for Your Organisation

There’s no one-size-fits-all answer. The best structure depends on your organisation’s needs, size, and risk profile. What matters most is making an intentional choice and ensuring everyone knows how to work together to keep the light shining bright.

If you’re considering how to structure your procurement function, or want to benchmark your current approach, download Procurement as the Guiding Light for practical insights and a maturity assessment framework.

Need a guiding light? Book a meeting with Stefan Gassner, author of Procurement as the Guiding Light and TargetedBrains MD