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Designing the Procurement Function You Want to Lead
CPO Path #24 CW 36 2026
EXECUTIVE PREMISE
An operating model does more than allocate procurement work. It shapes who may decide, where procurement people build business context, and which practices the organisation expects to be common.
A more useful leadership perspective is therefore to separate three questions that restructuring discussions often combine: where decisions sit, where people sit, and where standards are set.
WHY THIS MATTERS
Procurement Leaders reported in 2024 that more than three-quarters of CPOs surveyed had altered their organisational model during the previous three years. ([Procurement Leaders / SpendHQ], 2024) Yet Hackett's 2025 study found procurement resources still weighted 69% centralised and 31% decentralised, with respondents expecting only a modest change to approximately 71% centralised over the following three years. ([The Hackett Group], 2025)
A practical reading is that frequent redesign does not necessarily settle the centralisation question. It may indicate that several different design decisions continue to be negotiated through the same organisation chart. ([Procurement Leaders / SpendHQ], 2024; [The Hackett Group], 2025)
THE REAL DYNAMIC
Bals, Laine and Mugurusi provide a useful structural lens. Their contingency framework separates macro-level dimensions — category, business unit, geography and activity — from characteristics including centralisation, formalisation, specialisation, participation and standardisation. ([Bals, Laine & Mugurusi], 2018)
That distinction matters because "central procurement" can describe very different realities.
Hackett's 2025 respondents reported enterprise-wide category-management teams in 77% of organisations, while 41% used procurement personnel embedded in local businesses and 31% used a dedicated business-partnering team. A procurement centre of excellence was present in 55% of responding organisations. ([The Hackett Group], 2025)
The organisational implication is not that one configuration is superior. It is that category ownership, physical or organisational location, and governance authority do not have to move together.
A category manager can hold an enterprise remit while remaining dependent on business units for specification and adoption. A local procurement leader can sit close to operations while commercial authority remains elsewhere. A CoE can own a methodology without owning the decision that methodology informs.
A.T. Kearney's operating-model work makes a related argument: procurement can become more integrated with product and business teams while retaining central governance, and the importance of centralisation itself depends partly on the wider business model. ([A.T. Kearney], 2019)
For someone seeking to lead the function, this changes the political reading of structure. Structure is partly access design. Moving decision rights changes who procurement negotiates with internally. Moving people changes where trust and context accumulate. Moving standards changes whose autonomy is constrained.
There is also a career-design consequence. A.T. Kearney explicitly links new procurement structures with more varied career paths and closer connections between procurement professionals and the business. ([A.T. Kearney], 2019) For a leader designing the function they may later lead, operating-model choices therefore also shape where the next generation of procurement leaders acquires enterprise exposure.
WHAT STRONG LEADERS DO DIFFERENTLY
Before redrawing reporting lines, build a three-axis operating-model map for the eight categories that matter most.
For each category, document:
Decision rights: Who decides supplier selection, commercial commitments, specification trade-offs and exceptions today — and who should?
Resource location: Where should the people serving that category sit to retain the business and supply-market context they need?
Standard-setting: Which methods, data definitions, policies and technologies genuinely benefit from enterprise consistency?
Show current state → intended state for all three axes, then name the business sponsor whose agreement is required for each change.
Add a contextual design test: consider business diversification, M&A or integration intensity, and actual supply-base commonality before assuming the same configuration should apply across categories. This is a CPO Path diagnostic, not a claim that one universal contingency model exists.
For the CoE, start with a decision rather than a capability catalogue. Hackett found analytics, performance measurement and value tracking, knowledge management and supplier negotiations among the activities most frequently provided through procurement CoEs. ([The Hackett Group], 2025)
The useful test is: which recurring enterprise decision will become materially better because this capability exists?
CPO PATH DIAGNOSTIC
Question | Fully true | Partly true | Not true |
|---|---|---|---|
Decision rights are explicit for our largest categories. | ☐ | ☐ | ☐ |
Resource location reflects where relevant business context sits. | ☐ | ☐ | ☐ |
Standards are common where consistency creates value. | ☐ | ☐ | ☐ |
Each intended structural change has a named business sponsor. | ☐ | ☐ | ☐ |
Our CoE begins with decisions to improve, not analysis to produce. | ☐ | ☐ | ☐ |
THE THREE-AXIS MAP
The map described above is available as a blank one-page grid: eight category rows, three axes, current state → intended state, one named sponsor per change.
→ Open the three-axis operating-model map
Fill it for your top eight categories before the next structure conversation. The first thing most leaders notice is how many cells they cannot answer with a single name.
QUICK WINS THIS WEEK
Pick your three largest categories and write down, in one name each, who decides supplier selection today. Not the committee — the name.
For one category, mark where the three axes disagree: enterprise ownership, local location, no common standard. That gap is usually where escalation happens.
Before your next restructuring meeting, ask which of the three questions is actually on the table. Most agendas conflate all three.
List your CoE's current outputs and strike any that no recurring enterprise decision depends on.
ONE-LINE VERDICT
Do not design the organisation chart you want to own; design the decision system you want procurement to be trusted inside.
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Talk soon,
Pascal
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SOURCES
The Hackett Group. (2025). 2025 Procurement Agenda and Key Issues Study Results. Licensed by Ivalua.
https://info.ivalua.com/hubfs/Hackett-Group-Procurement-Agenda-and-Key-Issues-Study-Results.pdf
Procurement Leaders. (2024). Beyond centre-led: The future of procurement operating models. In association with SpendHQ.
https://marketplace.procurementleaders.com/partners/spendhq/resources/beyond-centre-led-future-procurement-operating-models
Bals, L., Laine, J., & Mugurusi, G. (2018). "Evolving Purchasing and Supply Organizations: A contingency model for structural alternatives." Journal of Purchasing and Supply Management, 24(1), 41–58.
https://doi.org/10.1016/j.pursup.2017.10.001
Conde, A., Epstein, E., Easton, S., & Pearce, J. (2019). Stop the Operating Model Pendulum. A.T. Kearney.
https://www.kearney.com/documents/291362523/291367332/Stop%2Bthe%2BOperating%2BModel%2BPendulum.pdf
Thank you for your time and trust,
Pascal Hecker | Editor-In-Chief, CPO Path.