Why Procurement and Local Content Teams Should Stop Working in Silos

On a newly commissioned refinery, LNG terminal, or mining site, two teams are quietly working towards the same regulatory obligation using two different sets of data. Procurement is qualifying vendors, negotiating contracts, and managing delivery schedules. Local content and compliance teams are trying to prove, often to a national regulator, that a defined percentage of that spend, employment, and value creation stayed within the host country or region. When these two functions run on separate spreadsheets, separate supplier databases, and separate reporting calendars, the organisation is not just inefficient; it is exposed. Contracts get signed that quietly undermine local content targets, certification lapses go unnoticed until an audit, and by the time anyone spots the gap, the project has already missed a regulatory deadline or a supplier commitment it cannot walk back. This is the practical cost of procurement and local content teams working in silos, and it is a cost that is now well documented.

The Hidden Cost of Disconnected Supplier and Compliance Data

Poor data quality is not a soft issue. Industry analysis puts the cost of bad, inaccurate, or missing data at more than $600 billion a year across organisations, a figure that reflects the compounding effect of decisions made on incomplete information rather than a single point of failure (Traxtech). In procurement specifically, when purchasing runs through disconnected supplier portals and manual spreadsheet tracking, between 20 and 35 percent of spend ends up as maverick spend: off-contract, unmanaged, and paid at prices nobody actually negotiated (Atamis). Unmanaged spend of this kind typically costs between 5 and 20 percent more than properly managed spend, a margin that on a multi-billion-dollar capital project translates into tens of millions of dollars left on the table.

Data silos compound this further. Analysts describe data silos as a direct driver of inefficiencies, compliance risk, and higher operating costs, and note that breaking them down requires more than new software; it requires a genuine integration strategy and cultural change across departments (BizData360). For procurement and local content functions specifically, that means the supplier database procurement uses to qualify and pay vendors cannot be a different, unsynchronised system from the one compliance uses to certify local content performance to a regulator. When it is, both teams are working from a version of the truth that the other has never seen.

When Procurement Decisions Collide With Local Content Obligations

The consequences of this misalignment are visible across the world’s largest resource economies. In Nigeria, the Nigerian Oil and Gas Industry Content Development Act established minimum thresholds for Nigerian participation across procurement, employment, and ownership, enforced by the Nigerian Content Development and Monitoring Board (NCDMB). Yet legal analysis of the regime highlights that overlapping regulatory mandates and inconsistent enforcement create real friction for operators trying to reconcile procurement decisions with local content law (RSIS International). The NCDMB has had to issue specific guidance to close a gap that sits squarely between procurement and compliance: unmerited possession or misapplication of Nigerian Content Equipment Certificates during tender and bid evaluation was allowing unqualified intermediaries into the contracting process, causing delays and compliance failures that a procurement team relying purely on commercial criteria would not catch (NCDMB).

Guyana offers a similarly instructive case. Under the Local Content Act 2021, contractors and licensees must maintain prescribed local content data and submit annual performance reports to the Local Content Secretariat, which then issues a certificate of compliance or non-compliance (LocalContent.com). Non-compliance carries fines of up to GY$5 million for companies per offence, and government officials, including General Secretary Dr Bharat Jagdeo, have publicly warned that violators risk losing their certification entirely (Guyana Chronicle). A procurement decision made in isolation, awarding a contract to a vendor whose local ownership or subcontracting structure has not been verified against the Secretariat’s criteria, can therefore expose an operator to financial penalty and reputational damage that no one on the procurement side saw coming, simply because the compliance data lived elsewhere.

Not every example is cautionary. Saudi Aramco’s In-Kingdom Total Value Add (iktva) programme demonstrates what sustained alignment between procurement strategy and local content ambition can achieve. Aramco announced it had reached its target of 70 percent local content, up from roughly 60 to 65 percent in 2024, and has set a new target of 75 percent by 2030 (Aramco). The programme has contributed more than $280 billion to Saudi GDP, supported more than 350 new manufacturing investments backed by $9 billion in capital, and helped create over 200,000 direct and indirect jobs (Vision2030.ai). That scale of impact is not achievable if procurement sourcing decisions and local content tracking are managed as separate exercises; it requires the two functions to share the same supplier and value-add data continuously, not reconcile it after the fact.

The Price Silos Extract From Capital Project Delivery

Local content risk sits inside a broader pattern of capital project underperformance that silos help create. EY’s long-running analysis of oil and gas megaprojects found that almost two-thirds, 64 percent, of multibillion-dollar projects exceeded their budgets, while 73 percent missed their schedule deadlines. Cumulative cost across the projects reviewed rose from an original estimate of $1.2 trillion to $1.7 trillion, an overrun of roughly $500 billion, with poor procurement of contractors and contractor management cited as a specific internal driver (PR Newswire / EY). McKinsey’s research into capital project delivery echoes this: major projects overrun budgets and schedules by 30 to 40 percent on average, and more than 75 percent of industry leaders now say the delivery model itself needs to change (McKinsey). A peer-reviewed study of cross-functional collaboration in the early phases of capital projects went further, identifying fourteen distinct barriers and forty-three contributing factors that prevent functions such as engineering, procurement, and compliance from working effectively together during the stage of a project when local content and sourcing strategy are actually set (ScienceDirect).

Spreadsheets Are Not a Local Content Strategy

Much of this friction persists because local content reporting, in particular, is still frequently managed through spreadsheets. Research tracing back to a University of Hawaii study by Raymond Panko, and repeatedly confirmed since, has found that 88 percent of spreadsheets in active business use contain errors, a rate consistent with known human error levels in manual data entry once scaled across thousands of cells (Oracle). For a compliance function certifying local content spend to a regulator like the NCDMB or Guyana’s Local Content Secretariat, that error rate is not an inconvenience; it is a certification risk. Spreadsheets also lack the audit trail, version control, and real-time visibility that both a procurement team managing live contracts and a compliance team preparing a regulatory submission actually need, which is precisely why disconnected, manually maintained records are named repeatedly as a root cause of compliance failure in capital-intensive industries.

Integrated Supplier and Compliance Data as the Way Forward

The pattern across Nigeria, Guyana, and Saudi Arabia is consistent: local content performance is not something a compliance team can verify in isolation after procurement has already committed spend. It has to be built into the sourcing and supplier management process itself, with procurement and local content teams working from one trusted, continuously updated record of who suppliers are, what they are certified to deliver, and how every contract award affects local content obligations in real time. This is the practical case for genuine procurement and local content alignment, not as a compliance afterthought bolted onto procurement software, but as a single operating model.

This is the gap Dharas is built to close. Rather than treating supplier relationship management and local content reporting as two adjacent systems that need reconciling at audit time, Dharas’s integrated platform gives procurement, local content, and compliance teams a shared, real-time view of supplier data, certifications, and spend against local content targets. A cross-functional procurement compliance workflow of this kind means a contract award and its local content implications are visible in the same place, at the same moment, to everyone who needs to see it, turning integrated supplier and compliance data from an aspiration into the default way large capital projects actually operate.