“International companies spend approximately 1% of their overall procurement costs on administration. The goal of using Shared Services in procurement is to improve the input-output relationship between the procurement processes… Any procurement process that is not a key procurement competency can be considered as a candidate for Shared Services.”
So begins the chapter in a recent CapGemini report for Strategies and Insights for Today’s CPO. Iasta has a fairly large and diverse client base, some of whom use a Shared Services frameworks and others that do not. Consequently, I was interested to see the benefits broken down in the report.
- Lowering the costs of predominantly administrative procurement processes.
- Improving performance and service quality.
- Synergising stemming from economies of scale in processing.
- Improving performance management from process transparency.
- Unburdening procurement departments from routine activities, so allowing them to focus on core procurement tasks.
I have seen these programs be successful when done in-house or outsourced and they make logical sense, when structured and implemented correctly. CG reports cost reduction of 10-30% on average and payback cycles of 2-3 years, mostly due to reduced personnel costs and efficiency gains.


Method123 have some great procurement management process templates (see http://www.method123.com/procurement-management.php )