IACCM heated up when moderator Jonathan Hughes, a partner at Vantage Partners, a consulting firm specializing in negotiation and relationship management techniques, posed an age old question to a panel of procurement and contract execs: What’s the right organizational model for procurement and contract management effectiveness?

Daniel Mahledbashian, Chief Contracts Officer at General Motors, came down squarely on the side of a centralized command and control for contract management. Having traditionally had decentralized contracting with disparate reporting structures, GM recent transitioned to dedicated contracting professionals that report into a central contracts office that has responsibility for the automaker’s global service contracts. Mahledbashian says the move has enabled GM to better leverage spend and manage contract compliance and risks.

Vince Wong, Director of Contract Strategy and Operations at Roche Diagnostics Corporation, says his company’s decentralized organizational model that embeds contracting resources and capabilities within individual business units. Wong says the model, “allows us to be really close to the respective sales organizations requiring contracting support and very responsive to the varying business models and requirements of our business units.”

Meanwhile, Dennis Gawlik, Managing Director of Supplier Management at Alaska Airlines, endorsed the emerging center-led organizational structure as its first step towards procurement transformation. “Three years ago, Alaska Air was very tactically oriented organization. Sourcing and contract management and sourcing were literally non-existent as functions, which the exception of airline operations which was very regulated and had very entrenched contract management capabilities.”

In response, the airline devised a center-led sourcing organization that trained standardized on a well-defined and reinforced seven-step sourcing process. Alaska Air also developed a central contract function within the legal group. Both organizations were charged with bringing their expertise to coordinate sourcing and contracting opportunities across and provide support to the airline’s individual divisions and hubs.

“We did not have a mandate for [the business units and hubs] to follow our procedures and use our resources, so we actually had to provide tangible value and sell our way into opportunities one category and one division at a time.”