Centralized procurement is the practice of consolidating purchasing activities into a single unit. This enables companies to buy goods and services efficiently, at fair prices, and from reliable vendors. Centralized procurement helps organizations reduce costs and improve decision-making by centralizing the bidding process and monitoring supplier performance.

Decentralized procurement, on the other hand, emphasizes individual responsibility for purchases. This system gives departments and teams more control over their buying decisions but less oversight from the organization as a whole – leading to higher costs, longer purchase cycles and less efficient operations. Decentralized procurement allows teams to be more agile in responding to changing business needs, but without a centralized approach it can be difficult to maintain cost savings or standardize quality across departments.