Hybrid procurement structures—which combine centralized purchasing with decentralized buying teams—are designed to balance global and local governance, scalability, and adaptability. But do they truly operate as intended in practice?

Across nearly all metrics, survey respondents reported that hybrid operating models are less effective than centralized models in supporting procurement objectives. Analysis shows that centralized structures perform better in cost savings, stakeholder alignment, operational efficiency, innovation generation, and more.

Moreover, respondents working under hybrid structures were three times more likely than those in centralized models to believe that changing their current operating model would enable them to achieve their goals more quickly. Although data limitations prevented a full comparison between hybrid and fully decentralized models, the findings suggest that hybrid models can be difficult to manage, inefficient, and the least effective overall.

Amid the disruption caused by COVID-19, forward-thinking procurement leaders continue to look for opportunities to enhance the function’s value proposition. One such opportunity may involve minor adjustments—or even a complete restructuring—of the procurement operating model. Before abandoning or modifying their current model, leaders should gain clarity about the benefits, drawbacks, risks, challenges, and available alternatives.

In theory, hybrid operating models promise the balance and agility that centralized and decentralized structures can each offer only in part. However, as the analysis indicates, hybrid organizations often become complex, confusing, and less productive.

In globally interdependent environments, relationships between global and local teams may even become politicized. Newcomers may perceive central teams as an “ivory tower,” setting policies and strategies without appreciating on-the-ground sourcing realities. In hybrid organizations, mismanagement can easily occur, leading to unclear roles and responsibilities—or even hindering employees’ career development.

These challenges, however, are not insurmountable. Many organizations have discovered creative solutions to address the issues inherent in hybrid, centralized, and decentralized structures. These examples reflect the power of effective leadership—something no operating model can replace.