7 Signs Your Procurement Function Needs Transformation

Nobody wakes up and decides their procurement function is broken. It happens slowly. A spreadsheet here. A supplier someone chose without asking there. A team that used to have time for negotiation now spends its week chasing invoices.

The problem with slow decline is that it looks normal from the inside. So below are seven signs that are easy to check from the outside. Each comes with evidence from published research, so you can see how far your function sits from what good looks like.

Count how many apply to you as you read. There is a scoring guide at the end.

#Sign 1: Your procurement data lives in spreadsheets

Spreadsheets are not the problem. Spreadsheets as the system of record are.

When spend data sits in exported files, every question becomes a small project. How much did we spend with this supplier last year? Someone has to pull three reports, clean them and add them up. By the time the answer arrives, the decision it was meant to inform has usually been made.

Deloitte's 2025 survey of more than 250 chief procurement officers across 40 countries shows how wide the gap has become. Among the organisations Deloitte classes as followers rather than leaders, 31% have not started using advanced analytics at all. Another 32% are only considering it.

The cost is time. The Hackett Group's 2025 research found that analysts in the best procurement teams spend 26% more of their time analysing data rather than collecting it. That is the difference between a team that answers questions and a team that gathers numbers.

#Sign 2: You cannot see where the money goes

This is related to sign 1 but it is not the same. You can have good tools and still not see your spend, because the spend never passes through procurement at all.

The measure for this is called spend under management. It means the share of what the company spends that procurement actually influences — through a contract, a preferred supplier, or a sourcing process. Ardent Partners' 2025 research puts the average at about 71%. That is the first time the figure has passed 70% in two decades of their tracking.

Turn that around. On average, nearly three pounds or dollars in every ten are spent with nobody in procurement involved.

Ardent's research also puts a value on closing the gap. Each extra dollar brought under procurement's management produced savings of 6% to 12% in the first contract period.

#Sign 3: Most of the week goes on manual work

Every procurement team has some paperwork. The warning sign is when paperwork is the job.

Even the best teams struggle with this. Deloitte found that the leading procurement organisations — the ones outperforming on every measure — still spend roughly two-thirds of their time on activities that are not strategic. Deloitte calls this "the tyranny of the tactical". If the leaders are at two-thirds, most teams are higher.

Invoice processing is the easiest place to see it. Ardent Partners measured an average cost of $9.40 to process one invoice, taking 9.2 days. Only 32.6% of invoices went through with no human touch at all. The best 20% of companies process an invoice for $2.78. Everyone else pays $12.88.

Mid-sized companies are not exempt. Procurify's data across more than 250 mid-market organisations shows invoice processing taking around 98 hours in companies of 100 to 500 people.

#Sign 4: Nobody measures how suppliers actually perform

Most companies know their suppliers' prices. Far fewer know whether those suppliers deliver on time, deliver the right quantity, or deliver the quality that was promised.

The gap shows in the results. In Deloitte's survey, 84% of leading procurement organisations met or beat their plan for supplier performance. Among the rest it was 59%.

APQC, the benchmarking organisation, recommends two supplier measures as standard: average supplier lead time, and the percentage of deliveries that arrive on time. Neither is complicated. Both need someone to decide what counts as on time and then record it consistently — which is exactly the step most companies skip.

Without measurement, supplier conversations run on memory and mood. The supplier who was late twice last month is remembered. The one who has been slightly late every week for a year is not.

#Sign 5: Every department buys for itself

Marketing has its agencies. IT has its software vendors. Facilities has its contractors. Each department negotiates alone, usually without knowing another department is buying from the same supplier.

Deloitte's CPOs named this as the biggest single barrier to procurement delivering value. Siloed ways of working was listed as a top-three barrier by 57% of them — ahead of lack of talent, lack of technology and lack of funding.

Joseph Richardson, a long-time procurement leader, described what happens when procurement tries to step in. On the Art of Procurement podcast he explained how IT had always bought its own technology, then procurement arrived and declared the existing suppliers were not good enough. "So, immediately you have a conflict," he said, because IT was still held responsible for delivering.

The fix is not more rules. When people buy around procurement, it is usually because procurement is slower than the alternative. Tim Jones, formerly VP of Business Operations at Epic Games, put it bluntly:

One of the most dangerous phrases in the procurement dictionary is maverick spend. It implies that there are people out there who are ignoring us or somehow doing the wrong thing, when in reality they're just a bunch of users who we've often let down, who are so exhausted by the bureaucracy we've built around them that they found a better way to get the business done.

Tim Jones, former VP Business Operations, Epic Games, via Art of Procurement

Getting this right pays. The Hackett Group's leading procurement teams lose 60% less of their negotiated savings to off-contract buying than their peers.

#Sign 6: Procurement hears about projects after the decisions are made

This one is easy to spot. Does procurement get a request that says "please raise a purchase order for supplier X", rather than "we need to solve problem Y"? If the supplier has already been chosen before procurement hears about it, the only thing left to negotiate is price, and usually not much of that.

Deloitte found procurement's collaboration with research and development teams has fallen by 13% since 2023. That matters because product design is where most of a product's cost gets fixed.

Hackett's advisers made the same point on their podcast. The strongest procurement teams get involved at the start of sourcing processes 15% more often than their peers, rather than being asked to negotiate a contract once a supplier has already been picked.

Philip Ideson, who hosts the Art of Procurement podcast, has worked in both environments and is clear about what decides it:

Even where the use of procurement is mandated, stakeholders will find ways to bypass you if they do not see a value in the work you provide.

Philip Ideson, Art of Procurement

#Sign 7: The business only sees procurement as cost control

Cost matters. In Deloitte's survey, improving margins is still the top priority businesses set for procurement, at 72%. That is not going to change, and it should not.

The warning sign is when cost is the only thing procurement is asked about. Joseph Richardson described how many organisations still see procurement as "a function that is to provide cost savings" — and nothing more.

That view leaves money on the table in two ways. First, procurement can help with cash, risk and speed, not just price. Second, savings that nobody tracks tend to disappear. McKinsey's June 2025 research, covering more than 340,000 transformation initiatives, found the average procurement savings pipeline loses one-third of its value during planning and another 20% during execution.

#Score your function

Count how many of the seven signs apply. Be honest — nobody else is reading your answers.

#Transformation is not buying software

If four or more signs apply, the tempting answer is a new procurement system. Resist it, at least at first.

Software installed over messy data and unclear processes gives you messy data and unclear processes that run faster. Real transformation has four parts, and technology is only one of them:

People

The right skills, and enough hours in the week to use them. The Hackett Group's leading teams give their people twice the annual training hours of their peers.

Process

Clear rules about who can buy what, who approves it, and how quickly. Most delays come from unclear approval chains, not from slow people.

Technology

Tools that match the process, chosen after the process is fixed. Not before.

Data

Spend sorted into categories your team recognises, and a supplier list where each company appears once. Without this, the other three cannot work.

McKinsey's research on what separates successful transformations is useful here. The companies that hit their targets did three things. They built a pipeline of savings ideas more than 60% bigger than the target, because they knew some would leak away. They moved fast and showed results in the first six months. And they trained their people — with dedicated training, more than half of procurement projects finished on time or early. Without it, only a third did.

#What to do first

Whatever your score, the first step is the same: measure where you are before changing anything. Twelve months of spend by supplier and category. How long a request takes to become a purchase order. How many invoices you handle and how many go wrong. How your team actually spends its week.

A baseline taken after you start is not a baseline. It is an argument. The whole case for any improvement you make later depends on having measured before.

If you want the full sequence after that — what to do in months one to twelve — it is set out in our guide to the future of procurement.