Few questions split procurement, legal, and the business as cleanly as this one: who owns contract management? The honest answer is that it depends. It depends on company size, risk appetite, business maturity, and the type of contract on the table. Large corporates split ownership across procurement, legal, and budget holders with formal governance. Mid-sized companies often hand most of the lifecycle to procurement, with legal stepping in at key risk points. SMEs centralize ownership with the budget owner or procurement, supported by external legal as needed. Ownership shifts as organizations scale. What does not shift is the cost of getting it wrong.

The debate gained traction after a post mapped contract ownership step by step, from platform setup through renewal and termination, and proposed a RAPID framework to remove ambiguity. Recommender, Approver, Performer, Inputter, Decision Maker. The post drew commercial managers, in-house counsel, academics, and procurement leaders. The agreement on “it depends” was near universal. The disagreement on who should actually hold the pen was sharper.

Procurement at the Center, or Too Much Orange

The most direct challenge to the framing came from Nicholas Seiersen, a trading partner advisor. “The example in the coloured chart seems to put procurement at the centre of everything, which is not how I see it. The business sets the requirements and procurement helps develop a strategy to approach the market. Legal advises on key risk approaches. There is too much orange in the chart, particularly when you think of the sales side of the story.”

That observation matters. Most procurement-authored ownership models place procurement at the hub. The sell side rarely appears. A contract has two parties, and the buy-side-only view of ownership misses half the lifecycle reality.

Freddie Hinkley, a procurement specialist, took the opposite position with equal force. “There is no chance that the legal team has time to effectively handle contract management. They are already at capacity in simply having to review contracts. Procurement all the way. Often budget holders don’t have the time or will for contract management either.”

The tension between those two views is the entire debate in miniature. Procurement has capacity legal lacks. The business has accountability procurement lacks. Neither has all three of capacity, accountability, and skill.

The Research Says the Business Owns It

The most data-grounded contribution came from Colin Linton, an academic who has researched the question for over a decade. “Most contract management responsibility actually sits within the business areas, which are typically the budget holders and the primary users of the contract. Usually responsibility for day-to-day contract management doesn’t sit with trained or qualified procurement practitioners.”

His sample size gave the claim weight. “Over 600 surveys and now nearly 50 interviews. These span more than 600 organisations, split 50/50 between public and private sector. More than 90 percent of these organisations have a model where the majority of contracts are managed by the numerous business areas, not by Legal or Procurement.”

His sharper point cut at the resourcing trend. “There’s definitely been a trend for central Procurement teams to become smaller, less operational and more strategic. So these aren’t resourced for day-to-day contract management. The most important contracts might be managed by Procurement. But everything else will be with the business users to manage.”

That observation reframes the entire debate. The aspiration is that procurement or legal owns contracts. The reality is that overworked budget holders manage most of them as an add-on to the day job. Linton’s central question lands hard. “Do these people with contract management responsibility have the right skills and tools to manage contracts effectively? And do they actually have time to manage contracts properly?”

The Training Gap Nobody Owns

James Meads, a procuretech advisor, exposed the skills problem from the practitioner side. “For a long time as a practitioner, I didn’t really see contract management as a part of my job. Commercial terms, yes. But the legal side was always where I struggled. And it’s rarely an integral part of a JD or interview process. I’ve never once been asked if I’m comfortable or competent at writing and negotiating contracts.”

His conclusion explained why ownership debates stay unresolved. “So many procurement professionals have had zero formal training on this, and are just expected to wing it.”

That gap matters. Assigning ownership to procurement assumes procurement was trained to manage contracts. Many were not. The ownership question hides a capability question that no function wants to answer honestly.

Legal Should Not Own It Either

The legal perspective came from practitioners who declined the responsibility. Rachelle Hare, a construction lawyer and commercial manager, was direct. “With my legal hat on, Legal isn’t the right person to own contract management. Legal needs to be an input and a SME, not the owner.”

Her preferred model was specific. “I’d rather the project or budget holder own contract management than Procurement. Procurement does an amazing job, but their skill-sets aren’t tailored to managing a contract. The business is better off getting a dedicated Contract Manager who can do so more cost-effectively. As Commercial Manager, I can supervise a Contract Manager. Even better if the Commercial Manager and Contract Manager are embedded in the Project.”

Her closing line captured the resolution most experienced voices reached. “Really, it’s one glorious partnership of SMEs.”

The Contract Is an Operating System, Not a Document

The deepest reframing came from Arne Rheeder, a commercial and contracts specialist in mining projects. “One of the biggest mistakes organisations make is treating contracts as a legal document instead of an operational control system. Legal protects the wording. Procurement protects the commercial structure. Operations live with the consequences. And the budget owner usually carries the pressure when reality starts diverging from the assumptions.”

His warning about fragmented accountability was precise. “When procurement owns pricing, legal owns risk wording, operations own delivery, finance owns approvals, and nobody owns the full commercial outcome, projects slowly start developing governance blind spots. The contract is not the end of the procurement process. It is the beginning of operational reality.”

Arjen Van Berkum, a contract management strategist, sharpened the structural critique. “Ownership without process clarity is just politics dressed as governance. A 6-page manual and a shared folder do not constitute a process framework, yet that is the reality in far too many organisations. When there is no real foundation, the ownership debate is simply a power struggle dressed up as best practice.”

His distinction between hierarchy and process ownership was the strongest line in the thread. “Process ownership is fundamentally different from hierarchy. It is not about who sits highest on the org chart. It is about who owns the logic, sequence, responsibilities and governance across the full lifecycle.”

Collaboration, Not Conquest

Clarice Camacho, a global energy procurement and risk leader, offered the model most voices converged on. “Procurement owns sourcing, negotiations, supplier relationships, and commercial performance. Legal owns contractual risk, compliance, and governance. Finance oversees budget alignment and payment controls. Business stakeholders own vendor outcomes and service delivery.”

Her closing reframing resolved the ownership question without picking a single winner. “Procurement doesn’t own contracts alone. It owns collaboration around them.”

Sajith Raghavan, a VP of Procurement with experience at ICL, Reliance, and DuPont, named the stakes. “Too many organizations still rely on informal ownership models, which creates delays, missed renewals, compliance gaps, and unnecessary disputes later on. Clear governance turns contract management into a strategic capability instead of an administrative task.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, the realistic owner is often the business, not procurement or legal. Research across 600 organizations shows over 90 percent leave most contracts with business users. Any ownership model that ignores this manages an aspiration, not the reality.

Second, ownership hides a capability gap. Most people managing contracts received no formal training and have no time allocated. Assigning ownership without addressing skills and capacity guarantees that contracts slip through the cracks.

Third, the contract is an operating system, not a legal artifact. Fragmented accountability across pricing, risk, delivery, and approvals creates governance blind spots. Clarity on who owns the full commercial outcome matters more than the exact functional split.

Who actually manages your contracts after signature, and do they have the skills and time to do it well?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Procurement software pricing was set in a world that no longer exists. Per-seat licensing made sense when human analysts logged in at 8 a.m. to build spend cubes, run sourcing events, and manage supplier onboarding by hand. That world was 2013, maybe 2021. By 2026, AI runs most of that work end to end, supplier onboarding requires no human, and tail spend operates autonomously. Yet enterprise procurement teams continue to write checks for $200K to $2M per year on legacy platforms priced for the workflow that AI has already replaced.

The debate gained traction after a post from an AI procurement leader and McKinsey alum argued the renewal math has fundamentally shifted. The post drew CPOs, transformation consultants, AI-native vendors, product leaders, and procurement veterans who had built careers on legacy suite implementations. The agreement on the diagnosis was strong. The disagreement on what enterprise complexity still costs was sharper.

Outcomes Are Not a Commodity. Software Is.

The original argument rests on a clean separation. “Software is becoming a commodity. The features that used to differentiate enterprise platforms are showing up in newer tools at a fraction of the cost, and AI is closing the gap faster every quarter. Paying a premium for the logo on the contract doesn’t mean what it used to.”

What replaces feature-based pricing is outcome-based commercial logic. “What’s not a commodity? Outcomes: savings captured, suppliers onboarded, supply chain risks avoided, spend brought under management, tangible results. That’s what procurement gets measured and evaluated on.”

Sergey Zarubin, CTO at Zinit, sharpened the operating principle. “Procurement platforms should be measured less by the number of features they offer, and more by how quickly they help teams make better decisions and eliminate manual work.”

That reframing matters because most legacy suite roadmaps still lead with feature counts, module additions, and platform breadth. The buyer scorecard has moved. The vendor scorecard has not caught up.

The Enterprise Complexity Counterargument

The most credible pushback came from Divyanshu Singh, an AI and digital transformation leader. He drew a parallel that lands. “This feels similar to what happened in MarTech. AI disrupted campaign creation, personalization, analytics, and automation yet enterprises still pay heavily for platforms like Adobe, Salesforce, and HubSpot because the real value isn’t just features. It’s governance, integrations, security, scalability, compliance, and operational reliability at enterprise scale.”

His procurement application followed. “AI can automate sourcing, onboarding, and tail spend workflows, but large enterprises still need deep ERP integration, supplier governance, auditability, global process control, and accountability. That’s why platforms mentioned still command premium pricing. Not because workflows haven’t changed but because enterprise complexity hasn’t disappeared.”

The original author conceded the point on enterprise complexity, then sharpened the disagreement. “Where I’d push back is on whether those capabilities still justify premium pricing the way they did 5 to 10 years ago, because most of them have become table stakes rather than differentiators. SOC2, ISO, deep ERP connectors, and global process control, accountability, are now standard on platforms built in the last few years.”

That distinction matters operationally. Enterprise complexity is real. Whether incumbents still hold a defensible moat on capabilities that newer AI-native platforms now ship out of the box is the unresolved question.

The Influence Problem Procurement Won’t Admit

The sharpest critique of the procurement function itself came from Brian Mangano, Founder of Balestra Group. “I don’t think the problem is as simple as ‘you’re picking the wrong tool.’ Procurement struggle to influence the allocation of budget to pay for new products, both upfront cost and resourcing, and the average business has worked out that low-level automation mostly just gets you to a poor result faster. Efficiency has been the pitch for twenty years and the function isn’t measurably better at its job.”

That observation cuts harder than the original post. The pricing problem is not just that legacy software is overpriced. It is that procurement has spent two decades selling efficiency as a justification for spend on procurement tools, and the function still cannot prove it moved the needle on commercial outcomes. AI changes the price tag on automation. It does not automatically change procurement’s ability to influence enterprise budget.

James S., a procurement transformation and strategy leader, identified the structural barrier to renewal renegotiation. “It’s changing the minds of the legions of procurement veterans still stuck in the mud of the early 2000s S2P suites that is the hard part.”

The author replied with the institutional reality. “Most of these veterans built their careers around running these platforms. Asking them to rethink that is a tough ask, especially when their CFO signed a 5-year deal two years ago.”

That sentence captures the real obstacle. Renewal math is rational. Renewal politics are not. A CPO who recommended a five-year suite contract two years ago cannot easily walk into the CFO’s office in year three and recommend tearing it up.

The Value Architecture Alternative

A second thread argued that the question is not suite versus AI-native, but decision intelligence layered above whatever stack already exists.

Oii.ai, an industry vendor, made the case directly. “The renewal conversation is becoming less about software replacement and more about value architecture. A lot of enterprise stacks still hold useful transactional, planning, and workflow data. The question is whether leaders can turn that data into better decisions quickly enough, without spending months ripping systems apart.”

Their commercial model proposal added a sharper point. “We start with a co-invest Proof of Value, prove the benefit on the client’s data, then scale once the value is visible.”

That commercial structure matters. Co-invest proof of value is a meaningful departure from per-seat licensing or even outcome-based AI credits. If the vendor takes upfront risk on whether the platform actually delivers savings, the burden of proof shifts entirely. Most legacy suite vendors cannot match that commercial logic because their cost structure assumes long contract terms and stable per-seat revenue.

The AI-Native Platforms Are Already Here

Arne S., focused on agentic AI for enterprise procurement, pushed back on the framing that this was a future state. “There are already AI-native platforms for S2P out there. They are overrolling the market at the moment.”

That observation matters because the original post implies the market is in transition. Vendors building inside the category argue the transition has already happened in specific segments. The question for incumbent vendors is whether their installed base will renew long enough to fund the rebuild that AI-native platforms have already shipped.

The 70 Percent No One Talks About

The most important caveat in the original post deserves more attention than it got. “License fee is maybe 30 percent of the real cost of being on a platform. The rest is integrations, change management, data migration, business risk.”

That 70 percent is the real reason renewal cycles run their course even when the renewal math looks bad. Integration depth, master data dependencies, and change fatigue create switching costs that have nothing to do with software pricing. A procurement leader running the renewal math honestly has to price not just the license differential but the cost of breaking eighteen integration points, retraining four hundred users, and reconciling spend data across two systems during the migration.

Daniel Thulfaut, Head of Product, captured the shift in tone. “The renewal math conversation is finally happening. Refreshing to see this articulated so clearly.”

The author confirmed the underlying dynamic. “Most CPOs I talk to are looking at their next renewal very differently than they would have a year ago, even if most of them aren’t ready to say it out loud in front of their current vendor yet.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, the pricing logic of legacy procurement suites was built for human labor that AI now performs. Renewal math at flat per-seat pricing makes less sense each quarter.

Second, enterprise complexity has not disappeared. Governance, ERP integration, and global process control still cost something. The open question is whether incumbent vendors still hold a defensible moat on those capabilities, or whether AI-native platforms now ship them as table stakes.

Third, the real switching cost is not the license. Integration depth, change fatigue, and political risk for the CPO who signed the original contract are the actual barriers. Running the renewal math honestly means pricing all of them, not just the license differential.

When does your next major procurement platform renewal come up, and have you run the math at AI-native pricing yet?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Procurement has been here before. Every wave of technology has arrived with the same promise and the same threat: automate the POs, self-service the catalog, let the portal do it. Each time, the function was supposed to shrink. Each time, it didn’t. Not because the technology failed, but because a machine still doesn’t understand leverage. The latest wave, agentic AI, is louder than the last. But the underlying question hasn’t changed. Who actually does the thinking?

The debate gained traction online recently and drew reactions from procurement directors, sourcing leaders, AI consultants, and operators across pharma, energy, automotive, and FMCG. The agreement on the diagnosis was strong. The pushback on where AI actually stalls was sharper.

Exposing the Hiding Place

The most cited reframing came from Mario González, a procurement director at Tier-1 automotive. “AI won’t replace procurement, but it will expose something uncomfortable, how much of the function still hides behind process instead of judgment. The next gap isn’t tool adoption. It’s whether leaders redesign decision rights, capability, and accountability fast enough for AI to matter beyond productivity theater.”

That phrase, “productivity theater,” lands hard. It captures what most AI rollouts in procurement actually look like. Prompts that save individual hours. Dashboards that look impressive. Use cases that never connect to a real decision. The function looks busier, not sharper.

John Cross, an advisor to mining executives, drew the same line. “AI isn’t replacing procurement, it’s just exposing who actually understands leverage and who was hiding behind process. The tech gets sharper, but the edge still comes from the human holding it.”

José Gabriel Tovar Taracena, a strategic procurement manager, sharpened the principle. “AI will not replace procurement. It will replace procurement without strategic judgment. Because negotiation is not just data analysis. It is about reading risk, building trust, aligning the business, and making decisions under uncertainty.”

Where the Wall Actually Sits

The deepest operational critique came from Rabih Suleiman, an SAP Ariba and Jaggaer end-to-end specialist. He accepted the productivity layer worked, then pointed to what doesn’t. “What breaks is when you try to embed AI into the S2P process itself. Three patterns I keep seeing.”

His diagnosis was specific. “Master data. AI amplifies what you feed it: dirty supplier records, inconsistent category trees, and half-maintained contracts. The tool produces confident output on a shaky foundation.”

The second pattern was about ownership. “AI in a P2P flow needs someone who owns the exceptions. That role is often vacant.”

The third was about trust. “Teams either over-trust the output and skip review, or redo everything manually. Both kill the ROI case.”

His conclusion explained the MIT statistic without blaming the technology. “The 95 percent MIT number doesn’t surprise me. It’s rarely the tech. The operating model around it was never built.”

That observation matters because most procurement AI conversations end at the prompt. Suleiman’s framing moves the conversation to where it actually lives: data foundation, exception ownership, and trust calibration.

The Data Confidentiality Layer

Tom Hathaway, a supply chain improvement specialist and CIPS member, raised the constraint most enterprise procurement leaders feel daily. “Data security is a major worry for large procurement operations. Loading data into anything potentially ‘leaky’ in a world of hacks undercuts a duty of confidentiality to suppliers.”

Megane Morel, a procurement manager working across FMCG, pharma, and luxury, made the same point with sectoral nuance. “Not every sector can move at the same pace. Data sensitivity and confidentiality risks are real constraints.”

That constraint matters because most published procurement AI use cases assume the data can be pasted into a public model without consequence. For pharma, defense, energy, and any regulated category, that assumption breaks the moment compliance reviews start. The productivity gain is real. The deployment path is narrower than the prompt list suggests.

Jay Perkins, focused on commercial intelligence platforms, listed the cascade. “Tokens, carbon footprint, AI output accuracy, poor data leading to incorrect AI responses, hallucinations, AI not following guidelines even though they are documented in the agent, legal challenge.”

His punchline summed up the operational reality. “Right place and right use case, but the AI rollout will be won or lost on the data input.”

The Suppliers Are Using AI Too

The most uncomfortable observation came from Oksana Barabash, a procurement and supply chain professional. “We should start recognising how much AI is already being used by suppliers and stakeholders and CPOs in their communication with us and how. Are they actually reading and engaging with our points, or are we effectively speaking to a text generator?”

Her closing line was the sharpest. “Reading the room only works when there is a room, not just an email thread.”

That observation extends the original argument in a direction most procurement leaders have not yet processed. AI is not just a tool the buying side wields. Suppliers are using it to draft proposals, anticipate objections, and structure negotiations. The traditional procurement advantages, asymmetric information, slower response times for the supplier, the ability to surprise, are eroding from both sides simultaneously.

Alex Quek, a senior contracts manager in marine container shipping, captured the trajectory. “I can imagine a day when supplier and procurement are using AI to counter AI. Best AI wins.”

Encoding Beats Prompting

The most forward-looking critique came from Skillsora, a procurement platform. “The 8 prompts work for individual judgment-assist. Next layer for procurement teams: encoding those patterns as vertical agents that run across every contract, RFP, and supplier review automatically. Teams who encode their playbooks pull ahead of teams still copy-pasting prompts one document at a time.”

That point matters operationally. Individual prompting is an entry-level skill. Encoded vertical agents that run procurement playbooks across every artifact, with quality assurance from senior buyers, is the operating model where AI actually scales. Most procurement teams are stuck at the first level because the second level requires the operating-model investment Suleiman flagged.

David Račak, a procurement AI consultant, gave the practical entry point. “I would suggest to put these to AI model within company policy and ask for better prompt. Copilot rules these days if you just build a custom agent for stuff like these.”

Don’t Become the Tool

The closing principle came from Tom Ruello, VP of Sales at SpendHound. “AI provides a tool for procurement to significantly lift its status internally to a strategic thought partner. If you don’t use it, though, you will be eventually replaced. There are some pretty aggressive pitches coming from agentic AI companies out there that they will replace procurement leaders. If they catch a CFO or CEO on the wrong day, you’re in trouble if you’re not leveling up.”

Erick Andrian, a head of supply chain and procurement working on turnarounds, captured the response. “Use AI to kill the administrative ‘blank page syndrome’ so you can spend your energy on what moves the needle, like S&OP governance and TCO architecture. Master the tool to reclaim the time you need to lead.”

Pankaj Tuteja, Head of Operations at Dragon Sourcing, gave the cleanest summary. “The goal isn’t to be an AI expert. It’s to be a procurement expert who knows how to use a sharper tool.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, the productivity layer of AI works. Eight well-crafted prompts can save hours per week on contract review, negotiation prep, and drafting. That layer is the entry point, not the destination.

Second, the operating model is where AI actually stalls. Master data quality, exception ownership, and trust calibration determine whether AI moves from individual productivity to embedded process. The 95 percent MIT statistic is an operating-model failure, not a technology failure.

Third, the suppliers are using AI too. The asymmetric information advantage procurement has historically relied on is eroding. Reading the room is harder when half the room is generating text.

Is your procurement function using AI to amplify judgment, or to perform productivity?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Marketing remains the procurement category that defeats most playbooks. Stakeholders avoid the function. Spend resists clean classification. Traditional RFP processes feel like a foreign language imposed on creative teams that live in weeks, not quarters. And the cost-savings metric that earns finance applause loses marketing immediately. The structural mismatch has frustrated procurement leaders for years, and the latest debate makes clear it has not improved.

The conversation gained traction online after Tom Mills, a procurement expert, argued that procurement keeps blaming the marketing team when the real problem sits one level deeper. The CFO-driven scorecard, the post argued, sets procurement up to fail in this category. The fix proposed was a new measurement model built around speed-to-supplier, stakeholder NPS, marketing ROI uplift, and supplier-led innovation. The post drew CMOs, CPOs, transformation leaders, agency veterans, and former marketers who had crossed over. The agreement on the diagnosis was strong. The pushback on the prescription was sharper.

Different, Not Difficult

The most cited reframing came from Simon Frost, a sustainable procurement and category management trainer. “What one comes to realise is not that they’re difficult, it’s that they’re different. They think differently and have different objectives. Procurement will look equally and opposite different to them. But when each team understands the other’s requirements, it’s absolutely possible to have a very fruitful relationship that delivers amazing results.”

Read more

The cheapest supplier almost never is. The number on the invoice tells one story. Defect rates, downtime, rework, switching costs, and operator workarounds tell another. By the time the second story shows up in the P&L, the original sourcing decision has been forgotten and the procurement team is blamed for problems someone else locked in.

The debate gained traction after a LinkedIn post on Total Cost of Ownership broke down the iceberg model. Above the waterline: purchase price, freight, duties, taxes. Below the waterline: onboarding, training, quality failures, downtime, maintenance, contract management, disposal, risk. The post drew procurement directors, supplier quality leads, manufacturing operators, and CPOs across healthcare, semiconductors, automotive, food, and infrastructure. The agreement on the framework was strong. The pushback on whether procurement actually owns the decision was sharper.

The Cheap Supplier Doesn’t Fail in Sourcing. It Fails at Volume.

The most cited operational insight came from Dror Ofir, who oversees mass production validation in Vietnam. “The cheapest supplier doesn’t fail in sourcing. It fails when volume hits. First batches pass. Then variation creeps in, rework builds, and operators start compensating just to keep shipments moving. At that point, it’s no longer sourcing. It’s the daily pressure between the floor and the supplier.”

His follow-up captured the silent escalation. “By the time finance sees TCO, customers already feel it.”

Mario González, a procurement and supply chain leader at Tier-1 automotive, drew the same conclusion. “Cheap suppliers rarely stay cheap. They just move the bill to quality, maintenance, and lost attention. TCO matters because procurement is not paid to buy the lowest number, it is paid to prevent the most expensive illusion.”

Mars Cantillano, a strategic sourcing specialist in semiconductors, gave a concrete number. Two die attach machines for high-volume power semiconductor packaging. Supplier X at $5.7M initial cost. Supplier Y at $7.4M. After one year at 10K wafers a month, Supplier X carried 4% yield loss plus 12 hours of unplanned stops a week, costing $1.5M in lost output. Supplier Y carried 0.8% yield loss with 99.9% uptime, costing $410K. Total TCO: X at $9.0M, Y at $8.2M. “The ‘budget’ machine erased its savings via scrap, idled lines, and rushed maintenance during a 2025 ramp-up.”

Procurement Doesn’t Always Get to Pick

The sharpest reframing came from Chris Sherry, a Supply Chain Manager. He pushed back on the implicit assumption that procurement made the cheap choice. “I take great exception to this post. You said ‘Procurement picks A. Job done.’ No no we didn’t. Finance and business picked supplier A on the strength of cheapest quote, despite the input of procurement. Procurement spends a year managing the fallout of that decision and then finally moves to supplier B, who now know they can push through a price premium because of the ‘journey’ your organisation has been on. And tomorrow it will start all over again.”

Allan W., a Head of Procurement and CxO, recognized the pattern. “CFO says ‘Why did you not take the cheapest’ or ‘You have to take cheapest now and then perhaps you can negotiate the cost for the remaining time of lifetime.’ If you don’t take the cheapest now the business case will not be approved.” His punchline captured the daily reality. “What you have presented here is the right way. And as procurement pros in real life one thing is on paper another thing is to get it passed all stakeholders.”

Marica Barabas, a senior procurement and supply chain specialist, made the structural point. “The unit price is visible, concrete, easy to defend. The hidden costs are scattered across departments, often untracked, and nobody ‘owns’ them. Procurement ends up carrying the blame for a quality failure or a supplier switch cost that was never part of the original conversation. Getting stakeholders to agree on a shared cost model before the decision is made, not after, is where the real work happens.”

The Exit Cost Most Teams Never Calculate

Several commenters pointed to a hidden category that almost no organization models: the cost of leaving the cheap supplier once the decision has gone wrong.

Alice Muyendekwa, a final-year supply chain student with growing field experience, made the sharpest observation. “The switching costs are consistently underestimated. By the time a cheaper supplier has underperformed long enough to justify changing, the cost of transitioning, new onboarding, qualification time, and relationship rebuilding often exceeds what was saved on unit price in the first place. TCO at selection stage matters, but TCO at exit stage is the calculation most procurement teams never run until they are already stuck.”

Hamilton Lindley, VP of Procurement, Compliance and Risk, drew the practical conclusion. “The real failure mode is winning the argument with data after the cheap supplier has already been selected, the relationship is established, and switching costs make the right decision feel impossible. Build the TCO model at sourcing. Present it jointly. Make the true cost visible before anyone signs anything.”

Delta TCO Is Where Real Work Happens

The most useful methodological pushback came from Angus McIntosh, a procurement consultant and former Global CPO. “TCO is clearly a better measure than price, but I’d argue we need a more practical way to apply it. In most organisations, full TCO modelling at this level of completeness is rarely resourced or proportionate. In practice, teams almost always work on a delta TCO basis, focusing on the few TCO components that actually change between decision options. That keeps the analysis grounded and much more actionable.”

The principle is important. Modeling every category of cost on every sourcing decision is theoretical. Modeling the few components where suppliers actually differ is operational.

Olga Lokshin, a procurement leader focused on strategic sourcing and SRM, raised the data problem behind even that lighter approach. “The hardest part is not what to include, it’s how to estimate it upfront. How do you approach maintenance and unplanned repair costs when there is no historical data yet, for example for new equipment or new suppliers?” Her solution: cross-functional input. Engineering benchmarks, supplier MTBF data, analogues from similar assets, and scenario-based modeling beat waiting for perfect data.

The Stakeholder Tax

The deeper problem in most organizations is internal, not external. Procurement is held responsible for bottom-line cost but pressured to hit unit price targets.

Adam Mostafa, a 16-year retail market builder in Saudi Arabia, captured the tension. “Stakeholders often hold procurement responsible for the bottom-line cost while simultaneously pressuring them to hit unit price targets that force the wrong supplier choice. The real art is getting the operational teams to own the long-term impact of these supplier decisions so the true expense is visible before the contract is even signed.”

Sean Dollar, a procurement leader focused on TCO optimization, framed the negotiation that actually matters. “The real negotiation is often an internal effort to convince stakeholders that a low unit price is a high-risk gamble for the business. We must drive a cross-functional approach where Operations and Quality help quantify the ‘invisible’ costs of managing a discount vendor.”

Norma Duran, a supply chain strategy leader, distilled the mindset shift. “Mature organizations stop asking ‘who is cheaper?’ and start asking ‘who makes us stronger, faster, and more profitable?’ Price wins spreadsheets. TCO wins businesses.”

Strahinja Jovanovic, a supply chain builder in eCommerce, added the discipline that turns the calculation into a system. “TCO only works when the people who ‘feel’ the cost help quantify it. One extra point I would add is tracking TCO during the contract. If defect rate or maintenance drifts, the decision needs revisiting before year two.”

The Cultural Layer

Faiq Ali Khan, an FCIPS-certified procurement professional, captured the pattern in one line. “Price wins the decision, but TCO decides the outcome.”

Eman Abouzeid, a global procurement and logistics expert, widened the frame. “The business never pays the price. It always pays the consequences. TCO doesn’t complicate decisions, it makes them real.”

Felipe Solano, a procurement manager in food industry, gave the analogy that lands with finance. “Just think about buying a used car without service history or another with full service history. What is under the bonnet is what matters, not the price difference.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, procurement does not always own the decision it gets blamed for. Building cross-functional TCO models at sourcing, with finance and operations co-signing, is the only way to stop the cheap-then-switch cycle.

Second, focus on delta TCO. Modeling every cost category is theoretical. Modeling the few that differ between suppliers is operational and defensible.

Third, model exit costs at entry. Switching out of the wrong supplier is often more expensive than the unit-price savings that motivated the choice. That calculation belongs in the original decision.

Who in your organization is responsible for the operational consequences of a cheap supplier decision?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Put the same AI product in front of ten companies and you can walk away with ten completely different commercials. Each one will be delivered with a straight face, defended as the “market rate,” and structured to make the buyer feel late to the party. The problem is not that any one quote is wrong. The problem is that none of them are anchored. The market is inventing its pricing logic in public, and “market rate” has become the most convenient phrase in the seller’s vocabulary.

The debate gained traction after a LinkedIn post from a Senior Procurement Transformation Advisor flagged what she called a structural gap between AI hype and AI commercial reality. Her argument: the technology is moving fast, the pricing is still catching up, and treating both as equally mature is expensive. The post drew CPOs, third-party risk specialists, energy procurement leaders, AI vendors, and category strategists across banking, infrastructure, and tech. The agreement was strong. The disagreements were sharper, especially on what procurement should actually do about it.

The Confidence Premium

The most cited reframing came from Farah Boukillou, a procurement leader and former OCP Group executive. “AI is being sold on potential, but priced on confidence.” Her diagnosis explained the variability without needing a conspiracy. Procurement teams need to anchor conversations back to value realization, not vendor narratives.

Nuha Luqman, who works in procurement for energy ecosystems, captured the dynamic in one line. “’Market rate’ in AI right now often just means ‘what someone managed to get away with.’”

Nicolas Frendo, a financial executive at Acephalt, used a different metaphor to make the same point. “Pricing AI always feels like a weird game of telephone, every company hears a different number and nobody knows which came first. Seeing ‘market rate’ show up in a room honestly just means, yeah, no idea what the market actually is, someone had to improvise.”

The structural reality behind those observations is straightforward. When vendors lack benchmarks themselves, they price based on what each buyer signals they can absorb. Procurement teams without independent reference points end up funding the seller’s price discovery.

Commercial Maturity Lags Technical Maturity

The most consistent thread was that procurement teams keep confusing the two.

Azfar Wasim, a business and digital transformation consultant, put it directly. “Too many teams assume technical sophistication equals commercial maturity. It’s a very expensive assumption to make.”

Jahabar Ifthikar, a senior procurement and digital transformation leader on $1.8B+ infrastructure projects, framed the trap precisely. “AI may be advanced, but its commercial models are still immature and inconsistent, which creates a dangerous gap between perceived value and actual cost. What’s often sold as ‘market rate’ is, in reality, a moving target shaped more by narrative than fundamentals.” His verdict on the procurement role: “Not just negotiating price, but challenging assumptions behind usage, scalability, and value realization. If pricing isn’t transparently linked to outcomes or if it shifts risk disproportionately to the buyer, it’s not innovation, it’s poor commercial design.”

Abdulmajeed Al Sheraim, a procurement and contracting leader, identified the shift required. “The key shift here is moving from price validation to value validation. How does usage scale? Where does cost outpace value? What happens under different adoption scenarios? If those questions aren’t clear, then the risk isn’t just overpaying, it’s locking into a model that doesn’t hold as usage grows.”

Fatima Sayalı, a procurement officer in manufacturing, drew the discipline back to basics. “We apply TCO thinking to every category we manage. AI contracts deserve the same discipline. Lock-in risk, adoption assumptions, renewal terms, these are not ‘AI problems.’ They are procurement problems. The hype does not change the fundamentals.”

The Token Trap

Several commenters dug into the mechanics of where the cost risk actually sits.

Brian Mangano, founder of Balestra Group, drew a useful distinction. The pricing chaos fairly accurately describes LLMs and services that are just wrapping an LLM, but does not hold for AI use cases that are not purely a token exchange. The counterpoint that emerged was that even when buyers do not directly pay for tokens, they pay indirectly. Vendors absorb the token cost in their price, which means token volatility still shows up downstream, just less visibly. Tokens are not expensive by themselves, but they increase unpredictability whenever the use case consumes them aggressively.

Scott Cohen, a former Cloudflare, Spotify, and MongoDB procurement technologist, raised the reverse risk. “This does present an opportunity for purchasers to do token arbitrage. Essentially buy a flat fee AI feature in their platform and then use it so much they exceed the fee in token utilization.”

That arbitrage is happening in practice. The reverse risk for vendors is real. No one wants to launch a software company and watch it go bankrupt because of overusage of tokens. The instability runs both ways.

Pricing Models Are Multiplying

Clarice Camacho, a global energy procurement and risk management leader, mapped out the most common approaches now in market. Usage-based pricing offers scalability but kills predictability. Subscription is predictable but limits flexibility. Per-seat is ideal for teams but rarely tied to actual value. Tiered scales with customer needs and complexity. Outcome-based is powerful but hard to measure.

Her core principle: “The real question isn’t ‘which model is best?’ It’s: which model aligns with the value your users actually get?” The strongest AI companies, she noted, are blending models. Subscription plus usage caps. Freemium entry plus premium tiers. Custom enterprise pricing for scale. “If your pricing doesn’t match how value is delivered, you’ll either leave money on the table or lose customers.”

A Public-Utility Model for AI

The most concrete buyer-side proposal came from Matt Vander Weg, a supply chain operations executive. “AI pricing in Procurement needs to be treated like a public service. Think of it as your electric bill, water bill etc. You have an allotment of use that is fixed (estimated consumption) plus overage costs.”

His negotiation playbook was specific. Negotiate year one as a variable cost to set the company’s average mark. Year two, set the fixed rate at the previous six months’ consumption rate. From there, run the fixed rate on a rolling six or twelve month prior baseline with allowable adjustments up and down. He went further, suggesting that cable, electric, and energy companies should be the ones negotiating directly with OpenAI, Anthropic, xAI, and others to remove the burden of individual commercial entities negotiating ambiguous pricing models.

Build Versus Buy Gets More Attractive

A second strategic thread argued that pricing instability makes building in-house more attractive.

Gael De Martelaere, a Chief Procurement Officer, put it bluntly. “Building becomes more and more attractive versus buying. Buy basic capabilities and infrastructure and build your AI on top of it yourself. Most AI buys end up being single-use case apps that with the right inhouse capabilities can be fairly easily built.”

The counterpoint that emerged was practical. Building in-house only works when the resources exist. At minimum, that means one procurement professional who understands the processes and data freed from other duties for weeks to months depending on complexity, plus the right technical people. Without that, the build path becomes more expensive than the buy path.

Adoption, Not Just Price

The deepest critique came from Christian Engler, a strategic procurement leader in public sector and IT. “The pricing model is only half the story. Many companies negotiate AI commercials as if cost control alone solves the problem. In practice, weak adoption, unclear ownership and poor use-case discipline destroy ROI faster than pricing ever will. Commercial maturity and organisational maturity need to move together.”

Bob Thompson, a procurement transformation specialist, raised the prior question. “Does the tech I buy today really work and has it been properly implemented? Yes or no? Then ask yourself, will adding AI actually enhance or increase my ROI, or will it simply cost me more money?”

John Hatton, a CPO and FCIPS, kept the framing grounded. “Nobody’s talking about the costs, nor the short to medium term stability and viability of the AI natives.” Good practice advice on AI procurement, he noted, frankly applies to just about any procurement activity.

Ghanshyam Rao, a procurement and supply chain strategist, distilled the test. “If procurement cannot clearly measure value, usage risk, and lock-in exposure, the pricing model is not mature enough yet.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, “market rate” is not a benchmark when the market is still inventing itself. Independent reference points, usage modeling, and TCO discipline matter more in AI than in any settled category.

Second, the pricing model has to match how value is actually delivered. Subscription, usage-based, per-seat, tiered, and outcome-based each carry different risk profiles. Blended models with usage caps are emerging as the most defensible structure.

Third, commercial maturity and organizational maturity have to move together. Weak adoption destroys ROI faster than any pricing model. The procurement team that locks in a great price on a tool nobody uses has not won anything.

How are you anchoring AI procurement decisions when there is no real benchmark to anchor to?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Most procurement functions are structured for control. Very few are structured for impact. The work gets done. The dashboards exist. The compliance boxes get ticked. And yet the function consistently arrives too late to change the outcomes that matter. By the time procurement enters the conversation, requirements are fixed, budgets are set, and suppliers are pre-selected. What looks like negotiation is often just managing constraints someone else already locked in.

The debate gained traction after a recent post laid out a five-layer model of procurement maturity. Layer 1 is process. Layer 2 is compliance. Layer 3 is reporting. Layer 4 is influence. Layer 5 is impact. The argument: most organizations operate at Layers 1 to 3, where work gets done but value is limited. The real shift sits higher, where procurement shapes demand before it is locked and aligns stakeholders before constraints are set. The post drew procurement directors, transformation consultants, CPOs, and senior buyers across energy, pharma, manufacturing, and infrastructure. The agreement on the framework was strong. The implications most leaders had not yet voiced were sharper.

Read more

Most procurement teams treat every pound leaving the business as “spend.” One bucket. One playbook. One set of negotiation tactics. The result is predictable. They cannot find savings because they never separated where the savings actually sit. Direct spend protects gross margin. Indirect spend bleeds EBITDA when unmanaged. Services spend spirals when scope is loose. CapEx locks in mistakes for years. Four categories, four failure modes, four different sourcing logics.

The debate gained traction after a LinkedIn post laid out a four-bucket spend model. Direct (cost of production), indirect (cost of running the business), services (cost of expertise), and CapEx (cost of assets and investment). The post drew procurement directors, category managers, sourcing transformation leaders, and senior buyers across pharma, manufacturing, energy, FMCG, and financial services. The agreement on the framework was strong. The pushback on what the framework alone can achieve was sharper.

Taxonomy Is Not Governance

The most cited critique came from Mario González, a procurement and supply chain leader at Tier-1 automotive. “Most teams do not mismanage spend because they lack categories. They mismanage it because visibility without category-specific authority changes nothing. Spend taxonomy explains the problem. Governance is what actually moves money.”

Shehab Hagag, a supply chain and operations transformation leader in KSA and the GCC, drew the same line. “Each spend category requires not only a different sourcing strategy, but also a different governance model. The biggest gap I’ve seen is not in defining the categories, but in aligning stakeholders and decision rights accordingly, especially for indirect and services spend.”

Balaji Swaminathan, a global sourcing and supplier strategy leader working with global OEMs, completed the picture. “The real unlock happens when this segmentation is combined with ownership and capability.”

The pattern is consistent. Categorizing the spend tells you what you have. It does not tell you who decides, who approves, or who absorbs the cost when the decision goes wrong. That second question is where most organizations stall.

Services Spend Is the Biggest Mess

The category that drew the most concern was services. Multiple operators flagged it as the most immature, the most poorly governed, and the largest unmanaged opportunity.

Mark Coulson, Co-Founder of SmartBuyer and a CIPS-qualified procurement expert, was direct. “In my experience, Services spend is the most immature, poorly governed and undefined. A bit of a catch-all for spend that doesn’t fit in the other categories nicely, and the data quality is typically very poor. It’s a big opportunity, but you need the streetwise experience to manage it.”

Omer Sasson, a direct sourcing specialist working with 7 and 8-figure D2C and Amazon brands, agreed. “Services spend is the one that quietly gets out of control. Clear scope and outcome-based payments make a massive difference.”

Jon Milton, a services procurement consultant, pushed the best-practice list further. Beyond clear scopes and milestone payments, he argued for “enable competition” and “ensure effective project governance.” His logic: “If, as McKinsey make us believe, c70% of projects fail, helping line managers to collaborate effectively with suppliers on projects post go-live is surely value-adding. Plus, it ensures variation orders and land and expand activities are controlled to protect the bottom line.”

Sean Dollar, a Senior Buyer focused on strategic sourcing and SRM, gave a shop-floor view of how badly the category gets handled in practice. “I have seen MRO buyers forced to act like a Swiss Army knife while juggling office supplies, CapEx projects, and even a few direct material accounts. This creates massive P&L blind spots.” His framing of where procurement adds value: “We add the most value when we act as a strategic bridge between the production line and the finance office. How do you gain that seat at the table before an irreversible decision drains your EBITDA?”

Marketing Should Not Be in Indirect

The sharpest reframing on the category boundaries came from Rebecca Bellairs, Co-founder of Pitch’d. “I honestly don’t think marketing spend should sit in the indirect cost bucket or be treated in the same way as other services. Consolidation often loses technical mastery, cheap impacts return, and desired outputs eg brand awareness and loyalty take time that no procurement metric can and should try to interfere with. I want to start a petition to move it out of procurement and go rogue, reporting into the CMO.”

Her appeal to procurement on promotional items was specific. “Just please ban all low quality promotional items. No one needs £5 branded headphones or a key chain, and they definitely aren’t wearing a gifted baseball cap.”

Bellairs’ point lands on a real tension. The same procurement playbook that consolidates IT software vendors will destroy value when applied to creative agencies. Different categories require different governance. Marketing may be the clearest case for category-specific decision rights.

The Data and Classification Problem

Several commenters argued the four buckets only work if the underlying data lets you separate them.

Abdulmajeed Al Sheraim, a procurement and contracting leader, pinpointed the gap. “The biggest gap is usually visibility and classification. Many organizations don’t have clean spend data to even separate Direct, Indirect, Services, and CapEx properly, so strategies end up reactive rather than intentional. Procurement maturity starts with understanding what you’re managing before deciding how to manage it.”

Chong Wan Yun, a learning and transformation leader, surfaced an even more basic problem. “Some organisations don’t even know how to differentiate between trade and non-trade. When that basic clarity is missing, everything gets lumped as ‘expenses,’ and procurement is expected to deliver savings without a clear foundation. At that point, it’s not a strategy issue. It’s a culture issue. And that’s the hardest part to change.”

Muhibuddin Soekarno, a procurement advisor with 20 years in energy and petrochemicals, put the practical question to the original framework. “What’s your practical approach to classify these spend buckets quickly assuming the Procurement org use SAP when relying only on standard procurement reports?”

That question, often asked but rarely answered cleanly, is where most spend transformation projects spend their first six months.

The Procurement Pro as Financial Architect

Bishowjuti Bhattacharjee, a strategic procurement professional and chartered MCIPS, widened the role description. “A modern procurement professional acts as a Financial Architect of the business cycle too. Beyond simple sourcing, managing categories, they strategically manage the Cash Conversion Cycle to ensure the organisation’s ‘metabolism’ remains healthy. By aligning AP with AR and tailoring payment terms to specific spend categories based on their nature, they protect operating cash flow.”

Dr. Srinivasan CT, Head of Infrastructure and Procurement in financial services, added three operational refinements. “CapEx to be tracked till capitalisation and extend to asset management to create best value. Opex to inwarded with order to receive and tracked till consumption. Service cost structure to be fixed to variable to outcome based.”

Veronica Scorrano, a strategic sourcing and procurement leadership specialist, made the connection to the broader financial plan. “Leading organizations go further, refining these categories to build a roadmap that clearly connects sourcing strategy to cost savings and cost avoidance impacts across the financial plan.”

The Strategic Shift

Pankaj Tuteja, Head of Operations at Dragon Sourcing, captured the broader transition this enables. “When the procurement team clearly separates direct, indirect, services, and CapEx spending, the team gets real visibility into where money is going and what levers to pull, whether it’s protecting margins, controlling maverick spend, tightening scope, or optimizing long-term investments. In this context, procurement shifts from cost-cutting to value creation, making decisions based on insight rather than assumptions.”

Olga Catena, a supply chain consultant and educator, summarized the operational consequence. “When you separate spend by category, you stop negotiating blind and start making decisions with real criteria.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, taxonomy without authority is theater. The four-bucket model only works when each category has its own governance, decision rights, and accountability.

Second, services is the highest-leverage category to fix. Poor scope, poor data, and weak governance combine to make it the largest unmanaged spend in most organizations.

Third, the foundation is data and culture. If finance and procurement cannot separate trade from non-trade, no sourcing strategy will land.

Which of the four spend categories is most poorly governed in your organization?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Most supplier decisions still come down to one number: the price on the offer. That number is real. But it is also the first layer of a much deeper cost structure most procurement teams never quantify, never charge back, and never present to finance. The result is predictable. Organizations think they bought cheaper. In reality, they bought fragility and paid for it in fragments scattered across the P&L.

The debate gained traction recently from a Director of Procurement working on what he calls Value Hacking, a method for mapping the five layers of cost that traditional Total Cost of Ownership (TCO) analysis tends to ignore. Layer 1 is visible costs (price, transport, customs, storage). Layers 2 and 3 cover risk, firefighting, urgent orders, air freight, and line stops. Layers 4 and 5 cover internal friction (hours lost managing incidents) and lock-in (the inability to pivot when markets shift). The post drew procurement directors, supply chain transformation leaders, IT category managers, packaging buyers, and economists who pushed the framework into operational territory.

Bought Fragility, Paid in Fragments

The most cited line on the thread came from Tomasz Tyras, a senior supply chain and S&OP architect. “The most expensive supplier decision is often the one that looked cheapest in the tender file.” His diagnosis went further. “Price is easy to compare because it is visible. Instability, escalation, lost planner hours, expediting, and reduced room to pivot usually sit somewhere else in the P&L, so they get treated as ‘operational noise’ instead of procurement cost.”

Read more

Most procurement job descriptions still treat direct and indirect as variations of the same role. Anyone who has actually run both will tell you that is wrong. The categories share a vocabulary. They share almost nothing else. Direct rewards rigor, supply risk management, and category depth. Indirect rewards political navigation, demand challenge, and influence without mandate. One playbook does not fit both, and the skills that make a great direct buyer can stall an indirect one.

The debate gained traction recently on social media and drew commentary from CPOs, category managers, S2P specialists, and consultants across pharma, manufacturing, energy, and tech. Some agreed sharply. Others pushed back. The most useful additions came from operators describing what actually breaks in the field.

The Skills Are Not the Same

Aiman Nadeem, a global sourcing expert, captured the divide in one line that became the most-liked sentence on the thread. “Direct teaches you how supply chains work, but Indirect teaches you how organizations actually work.”

Mario González, a procurement and supply chain leader at Tier-1 automotive, drew the same line from his career. “Direct taught me rigor. Indirect taught me influence.” His diagnosis went further. The real complexity in indirect is not the categories themselves. “It’s navigating budget owners who don’t see themselves as stakeholders until something goes wrong. In industrial manufacturing, indirect spend governance fails there first.”

Mayar Aljahmani, a strategic procurement and finance professional, pinpointed where the difficulty actually sits. “Indirect procurement becomes complex not because of the market, but because of the internal environment. In direct procurement, demand is usually clearer and more structured. In indirect, requirements can be vague, changing, and influenced by multiple stakeholders with different priorities.”

Not Everyone Agreed Indirect Is Harder

Two senior voices challenged the complexity ranking head-on.

Rune Alleslev, Head of Procurement at PwC Denmark, pushed back directly. “I tend to disagree on the differences in complexity. I think they are different in complexity but you can’t say one is more complex than the other. Indirect is complex as it covers the whole value chain of the company and purchasing is typically done more local and decentralised meaning higher focus on those stakeholder relationships. Direct is an integral part of the supply chain so a much bigger focus on supply risk. We’ve seen the past 6 years how complex that is.”

Angus McIntosh, a procurement consultant and former Global CPO, offered the same balance. “Indirect is generally more challenging in terms of stakeholder complexity, but direct often demands more deep category expertise. There are exceptions but those are the general patterns.”

The reframing is useful. Each side punishes a different weakness. Direct exposes weak category and supply risk skills. Indirect exposes weak political and demand-challenge skills.

Demand Management Is the Missing Tactic

The single most cited gap in the original post was demand management. Multiple operators argued that challenging the need beats negotiating the price.

Sean Dollar, a Senior Buyer focused on strategic sourcing and SRM, framed indirect as “the management of organizational entropy.” While direct “deals with the predictable order of a Bill of Materials,” indirect must navigate “the natural chaos of decentralized, non-standardized spend across a complex stakeholder ecosystem.” His missing tactic: demand management. “The discipline of auditing the ‘What’ before we ever negotiate the ‘How much.’” In MRO buying, he noted, the biggest wins come from identifying specification creep or aligning consumption patterns across IT and Finance before the RFP cycle even begins. “This shifts our role from being a transactional price-checker to a ‘Systems Auditor’ who can prove that reducing unnecessary demand is far more impactful to the bottom line than a marginal price concession.”

Serhat Soyer, an Indirect Procurement Manager, made the same point in tighter form. “In Direct, demand is structured. In Indirect, it’s often unclear, which means Procurement must challenge needs, not just source. That’s where real influence starts.”

Strahinja Jovanovic, a supply chain builder in eCommerce, summarized the principle. “Before sourcing, challenge ‘do we need this?’ and standardize where possible. In indirect, controlling consumption can beat renegotiating price.”

Influence Without Mandate

The hardest critique of the trust-and-data tactics came from Rabih Suleiman, an SAP Ariba and Jaggaer end-to-end specialist. He flagged three things missing from the typical indirect playbook.

First, category management. “Trust, data and strategic sourcing are tactics. Without structured category management underneath them you are reacting to spend rather than shaping it.”

Second, real partnership requires substance, not regular meetings. “An IT leader who sees procurement as a brake does not become a partner because of a regular meeting. He becomes one when procurement speaks his language and helps him move faster.”

Third, and the hardest one. “Indirect procurement without budget ownership is influence without mandate. If the budget sits across twelve departments and procurement has no formal role in allocation, strategic sourcing stays a recommendation not a decision.”

That mandate gap is what Mario González described from manufacturing. Budget owners do not see themselves as stakeholders until something goes wrong, by which point the leverage has evaporated.

Change Management and Adoption

Pankaj Tuteja, Head of Operations at Dragon Sourcing, added what he called Tactic 4. “Change management is critical. User adoption is vital in indirect categories. Even the best sourcing strategy can fail without it. Whether it’s a new SaaS tool or a marketing agency, we have to drive adoption very well to get success, manage resistance, and embed new ways of working.” His framing of the broader debate: “Direct builds strong fundamentals (cost, negotiation, supply risk). Indirect sharpens strategic thinking and business alignment. Both are essential.”

Olga Catena, a supply chain consultant, reinforced the point. “In indirect procurement, you’re constantly convincing internal teams to adapt, align, or adopt new processes. That’s where emotional intelligence and communication become as critical as negotiation skills.”

The Data Problem No One Has Solved

Magda Paslaru, founder and CEO of Rainbowidea, raised the data reality that operators recognize immediately. “Big one for me is how messy the data gets in Indirect. Direct usually means some kind of SKU discipline (or at least a system that sorta tries). Indirect is expense lines in 10 different systems, 3 naming conventions, and a guessing game every quarter. Untangling that into ‘actionable spend’ is a whole job on its own. Ever seen anyone truly nail automated visibility across indirect, or is everyone just halfway there?”

Hisham Serry, a supply chain director, described one practical workaround his team built. “We added value by requiring a specific format for free-text fields in indirect POs. This allowed us to use Power Query to extract the data from the ERP and transform it into a structured table, providing better visibility into our spending.”

Orhan Savaş, founder and CEO of Zentria Flow, added the cross-functional layer. “Indirect procurement often surfaces hidden bottlenecks that only show up when you really dig into cross-department workflows. Mapping those out early has saved us a lot of headaches later.”

Indirect Engagements Never End

Colin Butts, a value creation and procurement leader, captured what makes indirect different in nature, not just in skill. “In indirect procurement, engagements aren’t transactional. We don’t exchange money for goods. Instead, we purchase software, ongoing services, capex expenditures (and maintenance), and facilitate the management of facilities and construction. None of these activities conclude after the purchase is made. The relationships and needs of the company are constantly evolving, and indirect procurement must adapt to support these changes.”

That ongoing-relationship framing explains why a transactional mindset breaks down faster in indirect than in direct.

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, the skills are different, not interchangeable. Direct demands category depth and supply risk discipline. Indirect demands political navigation, demand challenge, and adoption work.

Second, demand management is the most underrated lever in indirect. Auditing the “what” before negotiating the “how much” produces bigger wins than price concessions on services the company may not need.

Third, influence without mandate is the structural ceiling. If procurement has no formal role in budget allocation, strategic sourcing in indirect stays a recommendation not a decision.

Have you worked in both direct and indirect procurement? Which set of skills moved your career faster?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Most procurement teams treat every pound leaving the business as “spend.” One bucket. One playbook. One set of negotiation tactics. Then they wonder why savings run out, maverick purchasing keeps growing, and finance stops taking them seriously. The problem is not effort. It is architecture.

The debate gained traction after Tom Mills posted a breakdown of the four spend categories on LinkedIn. Direct spend, the cost of production. Indirect spend, the cost of running the business. Services spend, the cost of expertise. CapEx spend, the cost of assets and investment. Each demands a different approach. Each fails in a different way. The post drew procurement leaders, transformation consultants, CFO advisors, and operators who pushed the framework into sharper operational territory.

Different Failures, Different Logic

The strongest framing came from Tomasz Tyras, a senior supply chain and S&OP architect. “A lot of procurement leakage starts when companies call everything ‘spend’ and then manage none of it with the right logic.” His diagnosis landed with the most engagement on the thread. “Direct, indirect, services and CapEx may all hit the P&L differently, but more importantly they fail differently. That is why one sourcing playbook across all categories usually produces cosmetic savings in one area and value destruction in another.”

His prescription was specific. Margin protection for direct. Compliance and demand control for indirect. Scope discipline for services. Lifecycle economics for CapEx. “Procurement becomes strategic the moment it stops chasing price and starts shaping financial outcomes.”

Sanchita Sur, a Gen AI founder and thought leader incubated by SAP, reinforced the point in one line. Each category operates on a completely different value logic. “Margin (direct), efficiency (indirect), outcomes (services), and long-term returns (CapEx). Applying one lens across all four is where most teams go wrong.”

Romain Ducrocq, a global indirect procurement leader with a $160M international scope, drew the same conclusion from enterprise transformation work. “Many professionals don’t struggle with spend first, they struggle with spend architecture.” When categories are aggregated, he noted, “margin levers get mixed with opex control, scope-based services get managed like unit-price buys, and lifecycle decisions get reduced to purchase price.” That, he argued, is when value leakage stops being a negotiation issue and starts becoming a structural one.

Visibility Is the Starting Point, Not the Solution

A second thread argued that categorization is only the first step. Governance is where most organizations break down.

Mark Strange, a procurement and supply chain transformation leader and founder of Möbius Nexus, pushed back on the idea that structure alone solves the problem. “Categorising spend is only the first layer. The real problem many organisations face today is not what bucket the spend sits in, it is how the spend is governed once it enters the system.” He listed the failure modes he sees regularly: fragmented catalogue governance, uncontrolled supplier onboarding, disconnected P2P processes, poor demand management. His verdict was sharp. “Spend visibility does not automatically create spend control. The real shift happens when procurement moves from spend classification, to spend orchestration across the entire enterprise.”

Sebastian Grigoras, a tail spend specialist, added the cross-functional angle. “Visibility as a starting point. The challenge may sit in getting procurement, Finance, and the wider business aligned closely enough to turn visibility into different decisions and better buying behaviours.”

Nis-Peter Iwersen, an interim procurement and supply chain excellence leader, warned that without a structured Total Spend Analysis there are no clear priorities, no category-specific strategy, and no sustainable savings. “Analysis alone doesn’t deliver impact, execution does.”

The Cost of Confusion

Mark Coulson, Co-Founder of SmartBuyer and a CIPS-qualified procurement expert, surfaced a category that most frameworks miss entirely. “For me, the real challenge isn’t managing them separately, it’s when they collide and overlap.” He gave two examples. IT needs Facilities for their data centre. Marketing needs IT for their martech stack. That spend, he argued, sits in no-man’s land and is only half-managed. He proposed a fifth bucket. “Hybrid spend (maybe call it ‘cost of confusion’?).” Cross-functional projects nobody owns. The spend that falls between departments. “There’s savings to be found in those ‘gaps’.”

Jeff Miller, a global procurement leader, voted for the indirect-plus-services combination as the biggest governance problem. “Very often departments or individuals do their own sourcing for those services.”

Where the Real Money Bleeds

Several operators pointed to specific category leaks most procurement teams underestimate.

Pamela Hopper, a procurement executive focused on TCO and value creation, flagged direct tail, indirect, service spends, and freight as chronically overlooked. “In most manufacturing environments, freight belongs right under Direct COGS.” Her discipline: a formal review of Direct “B”, Freight, Indirect, and Service spends at least every 3 years. “With current AI technology, we can now also manage the Direct C tail spend with much higher efficiency.”

Omer Sasson, a direct sourcing specialist working with 7 and 8-figure D2C and Amazon brands, drew the clearest comparison. “I’ve seen teams chase 5 to 10% indirect savings while direct spend leaks millions through poor should-cost modeling and weak supplier partnerships.”

Clayton Michael-Butler, a veteran-led business consultant working with $1M to $50M founders, pointed to the structural reality in smaller organizations. For many of his operators, all money leaving the business is just “expenses.” They have no procurement team. The categories blend into one drain. “We find $60K in duplicate software under Indirect, or $95K in mispriced service contracts because scope blurred over time. That’s real money that bleeds straight off the margin. It’s a structural problem before it’s anything else.”

Matt Hunter, focused on energy and sustainability management, added the energy spend angle. For direct, “energy spend on process is usually held to a budget that doesn’t take into account the recent volatility or upward trend of tariff and supply rates.” For indirect, facility energy spend is seasonal with decentralized procurement, no benchmarking, and no strategy.

Conversations With Finance Change

Matthias Svetic, an advisor on deal communication, captured the shift that happens when teams finally separate the four categories. “The real problem here isn’t the categories. It’s that most teams never separate them in the first place. Once you do, every conversation with finance and leadership changes. You stop defending costs and start showing where margin is being built or lost.”

Chantell L., an enterprise value leakage advisor, pointed to where the fastest value sits. “The mistake isn’t lack of effort, it’s using one playbook for four very different spend types. The fastest value is in Services and CapEx: tighten decision rights, lock scope to outcomes, and manage total lifecycle impact.”

Strahinja Jovanovic, a supply chain builder in eCommerce and qCommerce, summed up the architecture point. “Getting the supplier wrong isn’t just a cost issue, it’s a depreciation + downtime + switching cost problem for years. Procurement + Finance alignment here is everything.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, different spend categories fail differently. Direct bleeds margin. Indirect bleeds EBITDA. Services bleed scope. CapEx bleeds the balance sheet for years. One playbook cannot fix four different failure modes.

Second, visibility is not control. Structured Total Spend Analysis is the starting line. Spend orchestration, governance, and demand management are where value is actually created.

Third, watch the gaps. Cross-functional spend that sits between departments is often the largest unmanaged category. The “cost of confusion” is real and quantifiable.

Which spend category is most often unmanaged in your organization: direct, indirect, services, or CapEx?

Continue the discussion on Chain.NET, the global supply chain community, at www.chain.net. Ask questions, join events, and access exclusive resources.

Every procurement team faces the same quiet dilemma. Control too much and stakeholders route around you. Control too little and spend slips out of the budget. Both failures look different from the outside. Inside, they come from the same weakness. A function that has not found its role.

The debate gained traction after Tom Mills, a procurement commentator, posted on LinkedIn about what he calls the Procurement Paradox. His argument is simple. Overcrowding the process kills delivery, blocks innovation, and feeds shadow procurement. Rubber-stamping everything invites compliance failures, budget overruns, and maverick purchasing. “The answer isn’t picking a side. It’s mastering the middle,” he wrote. The post drew procurement leaders, consultants, and operators who pushed the idea into practical territory.

Design, Not Intent

The strongest thread in the discussion was that the middle has to be engineered. It does not emerge from good intentions.

Read more

A year ago, China sourcing was a risk management conversation. In 2026, for many industries, it has become a crisis management conversation.

That’s the assessment from Ugo Flumian, a Chief Procurement Officer who has been tracking the structural forces reshaping global sourcing decisions. His analysis has sparked debate among procurement leaders about how to navigate what has become one of the most complex sourcing environments in decades.

“Five structural forces have landed simultaneously, and they are reshaping the equation,” Flumian wrote, outlining the convergence that has transformed procurement strategy.

The Five Forces

CBAM is live. The Carbon Border Adjustment Mechanism took effect January 1st. This is not a future threat but a present cost. For Chinese steel and aluminium, analysts are already tracking 15-20% increases in total landed cost. Expansion to chemicals and plastics is already on the legislative roadmap.

China has weaponised critical minerals. Gallium, germanium, graphite, tungsten: export controls imposed in successive packages through 2024-2025. Companies that have not yet developed alternative sources are operating in a structurally fragile position.

Tariff unpredictability is now structural. Annual procurement cycles can no longer keep pace with the speed of regulatory change. The most advanced companies are shortening contract durations and keeping alternative suppliers qualified even when not immediately using them.

Chinese overcapacity is a strategic trap. Lower prices today equal deeper dependency tomorrow. Companies that hollow out their European supply base chasing Chinese deflation will face an expensive rebuilding exercise when the next disruption arrives. And the next disruption is not a question of if.

The Atlantic fracture complicates everything. Europe is navigating between US economic coercion and Chinese strategic competition. The practical implication: every category now requires a different answer, “strategic” or “commercial,” with entirely different regulatory and board-level implications.

Not All Categories Are Equal

Pierre Courtemanche, a sustainability and supply chain strategist, highlighted a critical shift in how companies must think about the China question.

“The China question is no longer a country-level decision. It’s becoming a product and material-level decision,” Courtemanche observed. “Two products sourced from China can carry completely different risk profiles depending on upstream materials, export controls, carbon exposure under the Carbon Border Adjustment Mechanism, or regulatory pressure.”

His reframe: “The real question is no longer ‘China or not China?’ It’s ‘which inputs, with what risk, and with which alternative ready?’”

Flumian’s category-by-category breakdown reveals the nuance required in 2026:

Potential Exit, Critical: Sensors and IP-sensitive power electronics carry potential risk of IP leakage from Chinese manufacturing partners. Companies need to carefully evaluate how sensitive the technology is for finished products and weight European or Japanese alternatives’ landed cost on the finished bill of materials.

Near-Shore, Urgent: Aluminium diecasting math has changed under CBAM. Chinese aluminium production remains heavily coal-powered. European and Turkish foundries, predominantly electric arc furnace-based, now can have a structural cost advantage once CBAM is included in the total landed cost model. For sheet metal and machining, steel CBAM plus lead time plus cost of capital on in-transit inventory means Eastern Europe can become competitive again in some cases.

China+1, Qualify Now: PCBA presents a mixed picture. China’s dominance at ecosystem level remains intact, but semiconductor export controls are creating lead time unpredictability on advanced chips. For complex, IP-sensitive PCBA, the case for European qualification has become stronger. For high-volume commodity assemblies, China with Vietnamese contingency remains rational.

Electrical motors require particular attention. “Watch the hidden rare earth dependency,” Flumian warned. “Motors ‘assembled in India or Eastern Europe’ often use Chinese-sourced NdFeB magnets. True resilience requires tracing rare earth content back to origin.”

Stay, But Rebuild Your Cost Model: Structural steel, plastic injection, and commodity PCBA still show real Chinese advantage, but cost models need updating. Anti-dumping duties, Corporate Sustainability Due Diligence Directive compliance, and in-transit inventory cost of capital all change the equation.

The Ecosystem Challenge

Wil Liew, who specializes in cross-regional tooling and manufacturing execution, offered a practical perspective on the ground reality.

“In practice, what we often see is that companies are not really replacing China, but rebalancing sourcing risk,” Liew observed.

He identified the core challenge many companies face. “China still offers unmatched speed in tooling development and engineering iterations. The challenge for many companies is not leaving China, but replicating its manufacturing ecosystem elsewhere.”

This ecosystem advantage explains why wholesale exits from China remain rare despite the mounting pressures. The infrastructure, supplier density, engineering capabilities, and speed that China offers took decades to build and cannot be replicated quickly elsewhere.

The Cultural Dimension

Roberto Cavani, a founder and CEO with Chinese business experience dating to 1998, offered a reminder about perspective.

“Don’t look at China with European eyes,” Cavani cautioned. “To understand China in depth you need to look at China with Chinese eyes.”

The comment underscores a tension in the current debate. While structural forces are undeniably reshaping the sourcing equation, understanding how China will respond, adapt, and compete requires more than spreadsheet analysis. Companies that have built deep relationships and cultural understanding in China over decades face different calculations than those treating it purely as a commodity sourcing decision.

The Real Landed Cost

Flumian’s central message cuts through the complexity: “Stop comparing ex-works prices. The real landed cost in 2026 includes CBAM, compliance cost, geopolitical risk premium, and cost of capital.”

When everything is modeled, he argues, the Chinese advantage is narrower than procurement dashboards suggest.

This represents a fundamental shift in how procurement teams must operate. The traditional approach of comparing supplier quotes and selecting the lowest price no longer captures the full picture. Total landed cost now includes:

Carbon costs under CBAM that penalize coal-powered manufacturing. Compliance costs for sustainability due diligence requirements. Geopolitical risk premiums for supply chain fragility. Cost of capital tied up in longer lead times and in-transit inventory. Qualification costs for maintaining alternative suppliers even when not actively using them.

The Strategic Framework

Don XU, a procurement head with over 20 years of experience, described Flumian’s analysis as a “very realistic view,” reflecting the sentiment of practitioners navigating these challenges daily.

The framework emerging from this discussion suggests three levels of decision-making:

Category-level assessment: Not all products carry the same risk. Sensors require different treatment than commodity plastics. IP sensitivity, carbon exposure, and critical mineral content all factor into categorization.

Alternative readiness: The most advanced companies are qualifying alternative suppliers even when not immediately using them. Contract durations are shortening. Flexibility is being built into procurement structures.

Total cost modeling: Ex-works prices are no longer sufficient. Every procurement decision now requires modeling CBAM impact, compliance requirements, geopolitical risk, and capital costs.

What Comes Next

The procurement leaders engaging with this analysis are not debating whether China sourcing has changed. They’re debating how to respond.

Some categories will exit China entirely where IP sensitivity or regulatory pressure makes continued sourcing untenable. Others will near-shore urgently as CBAM transforms the competitive equation. Many will pursue China+1 strategies, maintaining Chinese suppliers while qualifying alternatives. And some will stay, but with completely rebuilt cost models that reflect the true 2026 reality.

The companies that will navigate this best are those that have moved beyond binary thinking. The question is not China or not China. It’s which category, with what risk profile, with what alternative ready.

As Flumian summarized: “The next disruption is not a question of if.”

The procurement teams that have already done the work, qualified the alternatives, rebuilt their cost models, and understood their category-level exposure will be positioned to respond. Those still comparing ex-works prices will find themselves in crisis management mode when the next shock arrives.

Continue the discussion with procurement and supply chain professionals on Chain.NET.

The procurement professionals getting promoted right now have stopped leading with savings numbers. The ones still opening conversations with “I saved $X million” are wondering why they keep getting passed over.

That’s the uncomfortable truth emerging from a debate among procurement executives about what actually drives career advancement in the profession today.

“Early in my career, I led with savings. I had the numbers. I had the validation from Finance. And I got passed over,” wrote Mavelyn Cuches, an IT procurement leader focused on technology vendor governance. “It wasn’t until an interview for a Director role that my thinking finally shifted.”

The turning point came from a CFO’s question: “What would you do if you had no budget constraints?”

Cuches stumbled through an answer about hiring and technology. The CFO paused. Then said: “That’s not what I’m asking. I’m asking what business problem you’d solve first.”

“I didn’t have an answer,” Cuches recalled. “Because I was thinking like a procurement function. Not like a business leader.”

The Language That Gets You in the Room

The shift Cuches describes isn’t just about different metrics. It’s about a fundamentally different way of framing procurement’s contribution.

Instead of leading with savings, she started leading with outcomes:

Speed: “We cut vendor onboarding from 30 days to 5. R&D launched their pilot 3 weeks earlier than planned.”

Risk avoided: “We caught a security gap during renewal that would have cost $500K+ in breach response, before it became a problem.”

Visibility: “We built the first reliable renewal forecast. Forecast accuracy went from 45% to 90%. Finance stopped getting surprised by Q4 spend.”

Capacity created: “We freed 100+ hours per month from manual exception handling. The team could actually do strategic work instead of firefighting.”

“None of these start with a dollar sign,” Cuches observed. “All of them answer: ‘What would have broken if procurement wasn’t in the room?’”

Hamilton Lindley, VP of Procurement, Compliance and Risk, identified what separates functions from leaders. “Procurement leaders who make the biggest impact are giving operations the visibility they never had, cutting the friction out of the purchasing process so the field could focus on the job, catching spend that was walking out the door not because anyone was dishonest but because nobody was looking closely enough.”

He added a critical point: “Most procurement professionals have not learned to tell that story yet.”

Beyond Procurement-Centric Outcomes

Zoheb Shah, author of “The Procurement Detective,” pushed the argument further. The outcomes Cuches described, while stronger than savings, are still largely procurement-centric.

“The real shift happens when procurement connects those outcomes to the core business and the customers the organisation serves,” Shah wrote.

He provided examples of what that next level looks like. “Faster vendor onboarding isn’t just about process speed. It’s about accelerating product launches or service delivery. Risk mitigation isn’t just a contract issue. It’s about protecting customers, revenue, and brand trust. Better visibility isn’t just better forecasting. It enables better strategic decisions for the business.”

His reframe: “The most powerful question isn’t just ‘what did procurement improve?’ but ‘what changed for the business or the end customer because procurement shaped the supply market?’”

Cuches acknowledged Shah had pushed the thinking further than she did. “What I outlined is the intermediate step. It gets you out of savings language and into outcomes language. But you’re describing the final step: connecting those outcomes to what the business actually exists to do. That framing doesn’t just get you a seat at the table. It makes you indistinguishable from a business leader.”

The Perception Problem

Amit Rathore, a certified strategic procurement professional in pharmaceutical manufacturing, raised an obstacle many practitioners face. “People in organisation also have wrong perception about procurement. They think we are only calling vendor, loading material in trucks and delivering.”

Cuches acknowledged the perception problem but placed responsibility partly on procurement itself. “When procurement leads with tactical outputs, POs processed, vendors called, materials delivered, that’s the identity we create. The shift in how leadership sees us has to start with how we position our own work.”

Sanchita Sur, a Gen AI founder, captured the distinction. “Savings are easy to report but hard to differentiate. Outcomes are harder to define, but that’s what executives actually care about. The shift isn’t just in metrics. It’s in thinking like a business owner rather than a function.”

Changing the Scorecard

Rune Alleslev, Head of Procurement, shared how he restructured his entire measurement approach:

From Savings to Value Creation. From Risk and Compliance to License to Operate. From Optimization/Digitalization to Make it Easier to Buy.

“To stay relevant, procurement leaders should change the narrative,” Alleslev wrote.

Cuches praised the approach. “’License to Operate’ is a phrase that will land in any boardroom. Most people understand the concept. Very few have figured out how to make it measurable.”

Kevin G., an award-winning sourcing and procurement leader, noted these concepts aren’t new. “I have been speaking about this very topic for several years at industry conferences. Savings generated is number 5 or 6 on the list of things procurement should be focused on.”

When asked how to educate leadership on this broader value proposition, he outlined the approach: “Start with the C-suite, presenting the value an organization benefits from by having a dedicated procurement function. Mitigation of supply disruption. The ability to nimbly find alternative suppliers. Cultivating collaborative partnerships with key suppliers for enhanced service delivery.”

He emphasized the framing matters. “Each of these provide greater long-term value than short term price reductions. Emphasize these items first. It’s about selling the value internally. Don’t lead with or emphasize cost savings as the most important metric.”

The Capacity Problem

Marijn Overvest, author of a book on AI in procurement, identified the structural barrier that keeps many teams stuck. “Many teams are stuck in operational work. They do NOT lack ambition, but the workload leaves little room to show that broader impact.”

Cuches agreed this is the missing piece most people skip over. “It’s not a mindset problem. It’s a capacity problem. You can’t tell a strategic story if you’re buried in exceptions. That’s why the operational load has to be tackled first, not just for efficiency, but to create the space where strategic impact even becomes possible.”

Kishore Kunal, a global procurement leader managing a $250 million-plus CAPEX portfolio, noted when the connection happens. “Procurement impact often shows up through speed, risk control, and better visibility. When outcomes connect to business priorities, the value becomes much clearer to leadership.”

Cuches added: “That clarity is what changes the conversation from reporting to influencing. When leadership sees procurement in terms of their own priorities, not procurement’s metrics, that’s when the seat at the table actually means something.”

The Uncomfortable Truth

Malik Tazi raised a cynical but common concern. “Business outcomes existing because you were there only make your manager shine. Not you. Period. Unless the outcomes are bad. That’s where YOU step in.”

Zaina Kadah, with 15 years of global supply chain expertise, offered a simpler truth. “Executives listen when procurement speaks the language of business value.”

Cuches defined what that actually means. “The language isn’t procurement’s language dressed up. It’s actually learning what the business is trying to accomplish and connecting your work to that directly. That’s the skill that accelerates careers.”

The question that gets you to Director isn’t “How much did you save?”

It’s “What business outcome exists because you were there?”

Continue the discussion with procurement and supply chain professionals on Chain.NET.

In many companies, supplier selection looks like this: a rushed RFP, a few price comparisons, someone saying “they seem good,” then procurement is asked to sort the contract.

Then everyone is surprised when the supplier underperforms.

“Price should almost never decide which supplier you choose,” wrote Tom Mills recently. “Selecting the right supplier is not a gut feel decision.”

The statement sparked extensive debate among procurement and supply chain professionals about where value is truly created in the supplier selection process, and why so many organizations miss the mark.

The Late Engagement Problem

Mills presented a structured 12-step process, from identifying the need through to collaboration and improvement. But he highlighted a fundamental dysfunction: “Most stakeholders engage procurement after step 3, but the real procurement value is delivered steps 1 to 3.”

Cesar Herrera, a senior procurement and sourcing transformation leader, confirmed this pattern from his FMCG experience. “That step 3 point is the one that hurts most in practice. By the time the requisition landed, the supplier was already chosen, the budget already committed, and the timeline already impossible. Procurement just showed up to do the paperwork.”

His conclusion: “Better process helps, but the real fix is being in the room before anyone needs you.”

Hamilton Lindley, VP of Procurement, Compliance and Risk, reinforced this point. “Steps 1 to 3 are where procurement actually matters. But by then stakeholders have already decided. Getting a seat at the table before needs are defined is where the real negotiation happens.”

Omer Sasson, a director specializing in product sourcing from Asia, identified the consequence. “The biggest mistake I see is when procurement is brought in after step 3. By that point the supplier shortlist is already biased and the conversation becomes purely about price.”

Why Price Is a Trap

Romain Ducrocq, a global indirect procurement leader, explained why teams over-index on price. “Price is usually the easiest variable to compare, which is probably why so many teams over-index on it.”

But the real cost shows up later. “The real cost of a supplier often shows up later, like during implementation friction, poor fit, weak delivery discipline, hidden dependency, or other risk exposure.”

He shared a lesson learned the hard way. “The best supplier decisions I’ve seen were never just about ‘best price.’ I also learned it the hard way to be honest, poor delivery, etc. It is all about choosing the supplier the business could actually win with.”

Dipith Sharma, a supply chain analyst, provided a concrete example. “A car manufacturer chooses a cheaper semiconductor supplier. Price difference: €0.40 per chip. But the supplier delays deliveries. Production stops for 3 days. Factory idle. Loss: €12 million production loss. Saving €0.40 created massive cost.”

Tomasz Tyras, a senior supply chain and operations expert, identified where the real costs hide. “Price is just one line. Total cost is hiding in expediting, firefighting, inventory buffers, claims, and lost service.”

The Culture Challenge

Neal Falcone, founder of Peregrine Vantage, raised an obstacle deeper than process. “One of the uphill battles that many procurement teams face is related to business culture. Specifically, how procurement is perceived throughout the various organizations within a company.”

He described the dichotomy. “I have found that those procurement champion organizations engage appropriately, early, and often. I have also found, unfortunately more so, that many organizations see procurement as a necessary checkbox due to policy.”

The consequences are predictable. “When procurement is perceived as a checkbox in the process rather than a value add, doesn’t matter how much of an organized process for new supplier onboarding there is in place, everything gets rushed and ultimately becomes a fire.”

Mathew Schulz, a trusted voice in procurement, raised a tension between process and speed. “Imagine being at a MM startup in the tech sector and you grind things to a halt with a sequence that adds unnecessary friction. I wonder how that’s being taken into consideration, when the result is slower to market and your competition just closed another deal.”

Mills responded with a counterpoint. “You preach fast. I preach diligent. The two combined is the sweet spot and the controls in place need to be appropriate to the size of the purchase.”

Beyond Price: Carter’s 10 C’s

Mills recommended using a structured model like Carter’s 10 C’s to assess suppliers across multiple dimensions: Capacity, Competency, Cost, Cash, Commitment, Culture, Communication, and others.

Strahinja Jovanovic, a supply chain expert, endorsed the framework but added a caution. “Selection covers capability. Execution gap appears later. Vendor passes: Capacity and Cost and Competency. But fails: using capacity when needed, maintaining cost without scope creep, applying competency consistently.”

He proposed an addition. “I would add Step 13: Pilot validates they deliver what the selection predicted. Framework is very solid. Pilot proves they’ll use capability when you actually need it.”

Aleksandr Bondarenko, a strategic procurement professional, suggested a “Step 0” even earlier. “Stakeholder Alignment is just as critical. If Engineering, Finance, and Procurement aren’t aligned on KPIs before the RFP, even the best supplier will struggle to deliver.”

He also emphasized total cost of ownership. “Focusing on TCO rather than just unit price is what truly protects the bottom line in the long run.”

Post-Signature Governance

Alex Farr, a specialist in procurement networks and technology, raised a question about the phase after signing. “I have had countless discussions in the last year where professional services contracts don’t get continued oversight from procurement post-signature. The general discussion is that delivery oversight and monitoring of success and spend fall to other teams.”

Mills acknowledged a variable principle. “It depends on the category and it’s a long story. Some categories benefit enormously from continued procurement engagement. I wouldn’t say procurement should be the owners of reviews. But they should be invited to add a commercial perspective if needed.”

Paul R., co-founder of a services procurement governance platform, added a dimension. “How established is their internal infrastructure for managing governance of delivery and performance? They may create solid SOWs but if their governance doesn’t exist during delivery then they are less likely to have the management controls needed to identify issues before they become a problem.”

Preparation Before the RFP

Sascha Walleser, an expert in sourcing mechanical parts, added a crucial layer of preparation. “Many companies move by far too quickly into supplier comparisons without first understanding the supply market.”

He detailed what strong procurement teams do. “They invest time in analysing the supply market, understanding cost drivers and building should cost models, mapping supplier capabilities and assessing supply and geopolitical risks.”

His conclusion: “In my experience, the supplier selection is rarely won in the RFP. It is usually won in the prep and in the depth of supply market understanding before the process even starts.”

Shared Responsibility

Mark Strange, founder of Möbius Nexus, offered a nuanced perspective on supplier underperformance. “One pattern I see repeatedly in large organisations is that supplier underperformance is often attributed to the supplier itself, when in reality it originates in the way the commercial model and operating environment were designed.”

He detailed the real causes. “Even a highly capable supplier will struggle if the specification is unstable, incentives are misaligned, governance is unclear, or the organisation engages procurement too late in the process.”

His insight: “Supplier selection therefore is not just about choosing the ‘best’ supplier. It is about designing the conditions in which a supplier can actually perform.”

The Supplier Perspective

Guy Mandler, a product sourcing and procurement specialist, offered the view from the other side. “The teams that do steps 1 to 3 properly are also the easiest to work with as a supplier, because they actually know what they want before reaching out.”

Iain Lawrence, a sales professional, noted the symmetry. “As a sales professional who had been involved in many a tender process which clearly came down to price, it’s refreshing to see a procurement strategy such as this. And what is very notable is how similar that process and approach is to the one any sales professional worth their salt will apply to an RFP process.”

His conclusion: “If both parties approach tenders in this manner, that’s where you get a partnership, not just a supplier, and a win win for both parties.”

The Bottom Line

Saleh Aljneibi, a senior procurement and contracts manager, captured the root of the problem. “Many supplier challenges originate from rushed sourcing processes rather than supplier capability itself.”

Robert Cataldo, a procurement transformation expert, framed the guiding principle. “We should always choose the supplier that provides the best overall value. If you look only at the price, there can be many other cost drivers embedded in there somewhere.”

His message: “Let the procurement experts do their job.”

Tanya W., a senior procurement transformation advisor, added a dose of pragmatism. “Unless you are buying pencils. Pencils do buy cheaply.”

Mills concluded with the real objective. “The goal isn’t just to pick a supplier. It’s to build a low-risk, high-performing supplier portfolio. Because the right supplier can create enormous value. And the wrong one can create enormous pain.”

Continue the discussion with procurement and supply chain professionals on Chain.NET.

What does the ideal procurement team look like in 2026? One veteran procurement leader proposed an answer, and the response revealed just how much the profession is wrestling with fundamental questions about structure, headcount, and the changing nature of the work itself.

Tom Mills, who advises procurement professionals, laid out a 10 to 15 person team structure built around four pillars: business alignment, supplier value, operations and governance, and data and digital enablement.

The framework triggered intense discussion about whether such teams are realistic, how roles should be combined or separated, and whether certain functions belong in procurement at all.

The Proposed Structure

Mills organized his ideal team under a Head of Procurement who owns vision, executive alignment, enterprise risk, and the overall value narrative. Four leads report directly to this role.

The Business and Category Lead manages a team of three to four, including Procurement Business Partners embedded with key business units, a Category Strategy Lead owning top spend categories, and an optional Commercial Advisory Specialist for complex negotiations.

The Sourcing and Supplier Value Lead oversees strategic sourcing managers who run complex sourcing events, a Supplier Relationship Manager focused on performance and innovation, and an optional Contract and Commercial Manager for post-award value protection.

The Operations and Governance Lead handles process design, user experience, policy, compliance, and transactional buying through a team of two to three.

The Data and Digital Lead provides insight and enablement through spend analysts, risk and resilience analysts, and an optional Digital and AI Enablement Specialist.

Mills summarized his rationale: “Clear ownership by outcome. Senior roles, not junior layers. Automation absorbs admin. Business partners carry influence. Data supports judgement, not replaces it.”

The Headcount Reality Check

The first question from practitioners: is this realistic?

Brajan Gatys, who builds procurement functions at Personio, asked what many were thinking. “Is anyone here really getting that much headcount?”

Colin Bell, Group Director of Procurement at Quotient Sciences, pressed for specifics. “What size business or spend would be needed to support this structure? How would you scale it down to support SMEs?”

Thomas Bélanger offered a pointed observation. “It’s great! Now you just need a 3 billion dollar company to hire it!”

Mills clarified his assumptions. The model targets mid to large single-region businesses with annual revenue between £300 million and £1.5 billion, external third-party spend of £150 million to £700 million, limited geographic complexity, and procurement maturity beyond basic sourcing and P2P.

Felipe Solano ran the numbers. “It’s a structure of around £200-250k per year in salaries, plus bonuses, and should be operating in an organisation far above £100m turnover with a profitable stable 12-15% as minimum.”

Tahj B., a Director of Procurement who worked at Boeing, raised practical concerns. “I feel it would take years in most organizations to sell amongst the board. Even during my time at Boeing, it was lean.”

The Role Overlap Debate

Several experienced practitioners questioned whether certain roles should be separate at all.

Brian W. Lee, an AVP of Procurement, challenged the separation between category management and strategic sourcing. “For you to effectively execute contractual arrangements, you need to understand the business and objectives really well. I feel like having two separate pillars will just create a broken telephone between the two teams. I’d rather each category manager own and lead the end-to-end aspect.”

Lily Zhang, a global sourcing and procurement leader, identified a common problem. “One thing that often stands out in practice is the natural overlap between category strategy, strategic sourcing, and supplier relationship management. These roles can add a lot of value, but only when responsibilities are clearly segmented by spend, risk, or strategic importance. Otherwise, the same decisions end up being revisited across multiple layers, slowing execution and diluting accountability.”

Tomi Pesonen, a procurement advisor, suggested an alternative. “I would combine 1 and 2 and possibly combine roles pending on the scope of a business being partnered with.”

Should Compliance Report to Procurement?

James Meads, a procurement content creator and consultant, raised what he called “a controversial opinion.” He argued that Policy and Compliance should report to Finance or Internal Audit, not Procurement.

“If we’re truly going to be seen as an entrepreneurial and value-driven function, we have to shed this as a reporting line,” he wrote.

Natalia Pilipchak, a process design specialist, expanded on the conflict of interest concern. “Performance analysis of the procurement function may indeed be healthier outside of Procurement. When the same function both defines success metrics and is evaluated against them, especially where bonuses are involved, conflicts of interest are almost inevitable.”

She questioned Mills’ grouping of governance with transactional procurement. “I would be more inclined to combine governance with the data and digital pillar. Governance is about rules, and data is about the evidence of execution, real user experience and trends.”

Is Digital Enablement Still Optional?

Joël Collin-Demers, who mentors procurement teams on digital transformation, pushed back on one aspect of the structure. “I don’t know if the ‘Digital Enablement Lead’ is optional anymore though, at least in Enterprise.”

Gustavo Mattos Santos, a global operations executive, asked where AI execution fits. Mills responded that the Data and Digital lead would champion AI, but added, “I also think every part of the procurement function should be focusing on AI and how it will augment their roles.”

Kartik Shankar, a global procurement and transformation leader, predicted what comes next. “The agentic organisation to expand in 2027, I guess.”

What Works About the Framework

Despite the debates, several practitioners praised the structure’s clarity and outcome-focus.

Sascha Walleser appreciated how the model reflects reality. “I like this because it reflects how procurement actually works under pressure, not how org charts are usually drawn nicely. The clear separation between value creation, governance, and enablement is what makes it effective for me.”

He endorsed the emphasis on seniority. “Experienced people close to the business and suppliers make faster and better decisions. And keeping data and digital in a supporting role is key. Insight should sharpen judgement, not replace it.”

Steven Cox, a Chief Procurement Officer, emphasized that structure must follow strategy. “Any business questioning their structure, struggling to implement a strategy or deliver value realisation, should take a step back and do an E2E maturity audit which then provides the perfect context and justification to build the Org structure.”

Scaling Down for Smaller Organizations

Vamsi Krishna Velaga offered a practical starting point for smaller teams. “In small or early stage environments this level of specialisation isn’t always practical and teams often end up multitasking across sourcing, supplier management, compliance and data.”

He proposed a lean three-role model: “A Procurement Lead, a combined Sourcing and Supplier Manager, and an Operations or Compliance Coordinator. This ensures end-to-end coverage while still allowing the organisation to scale into your full 2026 structure.”

Mathew Schulz, founder of Pennywurth, noted that modern tools are changing what’s possible. “We’re in a time and place where organizations are looking for top tier talent who have the ability to build leveraging modern tools and new operating models. Both require rethinking how the work gets done.”

The Bigger Question

Ron Warneke, a strategic sourcing manager, offered perhaps the most pragmatic guidance. “So long as you align your organization to the Procurement Lifecycle you’ll be fine. Each organization has its own unique strategy.”

Domenico Tigani, Head of Global Indirect Procurement at Alfasigma, reminded readers that context determines structure. “It would be better to clarify that the structure depends on several factors, such as geographic coverage, company complexity, level of digitalization, team maturity, type of categories, and overall spend.”

The debate reveals a profession in transition. Automation is absorbing administrative work. AI is changing what’s possible with smaller teams. Business partnership is becoming essential. Yet headcount remains constrained, and executives still question whether specialized roles justify their cost.

Mills’ framework offers a target to aim for. The conversation it sparked shows how much ground procurement leaders must cover to get there.

Continue the discussion with procurement and supply chain professionals on Chain.NET.

Procurement leaders enter 2026 facing a sobering reality. The systems they design, the contracts they negotiate, and the supplier relationships they cultivate will mean nothing if the business ignores them.

That’s the central argument gaining traction among procurement professionals debating what separates high-performing teams from those quietly failing. The consensus: adoption beats design every time.

Tanya W., a senior procurement transformation advisor, framed the challenge in stark terms. “Like it or not, Procurement is about building strong systems that last. Systems where the business actually uses what you’ve put in place, suppliers bring you ideas before your competitors hear them, and risks do not arrive as a nasty surprise in the COO’s inbox.”

Her assessment resonated across the procurement community, triggering responses from category managers, sourcing specialists, and supply chain executives who confirmed the pattern in their own organizations.

Three Failure Modes Dominating 2026

Read more

The discussion covers Category Convergence and the rise of orchestrated Source-to-Pay stacks, the emergence of hybrid operating models that balance global control with local agility, and the growing focus on human-centered procurement experiences. The episode also dives into how connected intelligence, modern contract lifecycle management, and practical AI use cases are finally translating data into real-world business value.

The global apparel industry stands at an inflection point. Tariff wars have thrown sourcing strategies into disarray. Bangladesh faces prolonged instability. China increasingly makes products for Chinese consumers, not Western brands. And one country, long considered an underperformer, appears ready to claim the spotlight.

“I think the big winner is going to be India,” says Michael Bennett, a British sourcing executive who has spent three decades building supply chains across Asia for brands including Decathlon, Puma, and Champion. “India has not fulfilled its potential over the last 10 or 20 years. I think today is going to have its day in the sun.”

Bennett’s assessment carries weight. He opened Decathlon’s India office in 1998, hiring staff through a newspaper ad in the Times of India. Three hundred candidates showed up that first Saturday morning. Some of those original hires still work for Decathlon India today, now in senior leadership roles.

His prediction about India reflects broader shifts in how apparel brands think about where to make their products. The calculus has changed. Speed matters more. Relationships matter differently. And the old model of chasing the lowest labor cost no longer works.

The Tariff Response Varies Wildly

Every company is handling tariff uncertainty differently, and the range of responses reveals deeper strategic divisions within the industry.

Some brands have chosen patience, waiting to see how trade policy evolves before making major moves. Others went straight to their suppliers and demanded discounts to offset new costs. That approach, Bennett suggests, damages long-term relationships that took years to build.

“I’d rather not hit the suppliers with discounts,” Bennett says. “I’d rather look for opportunities to find value.”

The smarter brands are working with their manufacturing partners to find efficiencies, not simply passing along pain. Suppliers often know where costs can come out of a product or process. They will share that knowledge with brands they trust. They will not share it with brands that squeeze them at the first sign of trouble.

The most sophisticated operators have built what Bennett calls “centralized design and development” models. Product creation happens in one location. Manufacturing shifts to wherever makes strategic sense, whether that means Latin America for U.S.-bound goods or Africa for European markets. This structure allows brands to respond to tariff changes without starting from scratch each time.

What Store Experience Teaches Sourcing Professionals

Bennett started his career working the floor at a Decathlon retail store in France. He stocked shelves. He moved boxes. He watched customers touch products and make buying decisions.

That experience shapes how he thinks about supply chains today.

“You really only get those insights if you’re actually working and moving the boxes and putting the product on the shelf,” Bennett says. “I would really encourage anybody who wants to go into sourcing to get some experience of the front end as well.”

The lesson extends beyond customer preferences. Working in a store reveals how small upstream decisions create downstream problems. The placement of a label. How a garment gets folded. The quality of a shipping box. These details determine whether a retail operation runs smoothly or struggles with inefficiency.

Most sourcing professionals never see this. They work in offices thousands of miles from where products get sold. The disconnect creates blind spots.

The Hand Feel Problem

At Coach, where Bennett spent five years, product development meetings sometimes involved executives staring into space while running their fingers across leather samples. To an outsider, it looked absurd. To anyone who understood the business, it made perfect sense.

“The hand feel of getting the right smoothness, the right give in the leather, how you built that and then how you can replicate it 100,000 or 200,000 times was absolutely essential,” Bennett says.

This challenge exists across apparel categories. Champion obsessed over the feel of its t-shirts and sweatshirts. Athletic footwear brands employ chemists to develop materials that perform at elite levels. Getting the product right requires coordination among tanners, textile engineers, production managers, and designers.

The hard part comes after development. A craftsman in a sample room can produce a beautiful garment. Making that same garment at scale, with consistent quality, demands industrial discipline.

“How do you replicate something lovingly made in a tailor shop a couple hundred thousand times?” Bennett asks. “That’s an interesting problem to solve.”

Sustainability Became Standard Practice

The sustainability conversation has shifted. What once required dedicated initiatives and special programs now sits at the core of how factories operate.

“It’s just become part of doing business,” Bennett says. “It’s just another facet of doing business today.”

Factories have improved dramatically on both social and environmental compliance. The ground has shifted. But problems remain.

Brands often fail to understand how their own decisions create compliance issues at factories. Changing delivery dates. Swapping materials at the last minute. Negotiating prices down to margins that force corner-cutting. These actions happen in corporate offices. The consequences show up on factory floors.

“I think the brands and retailers do not to a great extent understand the impact of their actions,” Bennett says.

Factories hesitate to raise these issues. They fear losing business if they push back or disclose problems, even when those problems stem from brand decisions. Trust remains low. Transparency suffers as a result.

The industry tried to address audit fatigue through standardized compliance programs. Bennett worked on the Social and Labor Convergence Program, which aimed to reduce duplicative factory audits. The problem has gotten worse, not better. Factories serving multiple brands face constant audit disruptions as each customer demands its own verification process.

The 18-Month Lead Time Trap

Apparel supply chains remain remarkably inefficient. Lead times from concept to delivery can stretch 18 months. Much of that time involves waiting.

“So much of that is just waiting time, waiting for somebody to approve something so it can go to the next step,” Bennett says.

Technology promised to fix this. The industry has invested in 3D development tools, collaborative platforms, and data-sharing systems. Yet Bennett’s inbox stays full of emails and Excel spreadsheets. Late-night calls include dozens of participants, many adding a single word just to show they were present.

The technology exists to work differently. Adoption lags. Change management proves harder than software implementation.

“If your job is to sit in the head office and approve lab dips, then obviously you’re not going to be too interested if you can do it digitally or if the vendor does it,” Bennett says. “A lot of this is change management.”

Long lead times create waste. Brands commit to volumes, colors, and styles far in advance. When forecasts miss, inventory piles up or stockouts occur. The industry builds inefficiency into its operating model, then wonders why margins stay thin.

Building in New Markets Takes Patience

Opening a sourcing office in a new country sounds straightforward. Find factories. Start buying. Scale up.

Reality works differently. When Bennett set up Decathlon’s India operation in 1998, he faced a different world. No internet. Paper documentation. Government offices that required endless stamps and signatures. Backup generators because power failed regularly. Water systems independent of unreliable municipal supply.

The practical challenges have eased. The strategic ones remain.

“The key is to keep focus,” Bennett says. “Have a strategy of what you actually want to find and what you’re looking for, and then stick to it.”

Decathlon started with knitted garments in South India and equestrian equipment in the north. Only after those categories ran smoothly did the company expand into bicycles and footwear. Patience paid off. The factories developed. The relationships deepened. The business grew.

Companies driven by quarterly earnings struggle with this approach. Their attention spans run shorter than supply chain development timelines require.

What Comes Next

The apparel sourcing map will look different in five years. India appears positioned to gain share. Latin American production will grow for U.S.-focused brands. China will continue its pivot toward domestic consumption.

The winners will be brands that maintained supplier relationships through the tariff chaos rather than those that squeezed partners for short-term savings. They will be companies that invested in understanding their full supply chains, from raw materials through retail shelves. They will be organizations that finally addressed the technology and process gaps that keep lead times unnecessarily long.

The opportunity exists. Capturing it requires patience that many companies have lost.

This article is based on a video interview from The Sourcing Exchange. Watch the full conversation here

Continue the discussion on Chain.NET (www.chain.net).

The traditional category manager may be heading for obsolescence. That’s the argument sparking intense debate among procurement professionals, with many agreeing that job descriptions have failed to keep pace with how the function actually needs to operate.

James Meads, a procurement consultant, ignited the conversation with a pointed critique of current hiring practices. “We’ve spent too long obsessing over savings, risk aversion, and compliance,” he wrote. “But the future will demand a totally different toolkit and mindset.”

His assessment struck a nerve. Dozens of procurement leaders weighed in, many confirming that job postings still reflect priorities from a decade ago.

The Problem with Today’s Job Descriptions

Meads argues that companies continue hiring for tasks that add diminishing value. Sending out 50-page RFPs. Creating category strategy slide decks that no one reads after the initial review. Following rigid sourcing processes that don’t match how businesses actually make decisions.

“I look at where things are heading, and all I see are job descriptions harking back to 2015,” he wrote.

Marijn Overvest, who runs a procurement training company, agreed. “You capture perfectly how far the profession has evolved and how slowly job descriptions follow.”

Meads responded with urgency. “I just hope hiring managers wake up before their teams become irrelevant.”

John Coyne, who helps industrial teams improve sourcing velocity, put it bluntly. “The next procurement org won’t be built around cost centers and compliance. It’ll be a velocity engine. Time-to-decision, not time-in-seat, is the new ROI. Anyone still hiring for 2015 will get lapped.”

Five Roles That Could Define the Next Decade

Meads proposed five roles he believes will shape procurement’s future:

1. Builders. People who create solutions rather than implement bloated software that takes a year to deploy.

2. Directors of Agentic Operations. Leaders who manage the AI agents that will handle operational work.

3. Agility Champions. Professionals focused on speed and flexibility rather than bureaucracy.

4. Internal Comms Managers. Specialists who translate procurement language into terms the business understands and values.

5. Entrepreneurs in Residence. Innovators who challenge conventional thinking and push back against default approaches.

The proposals generated strong reactions. Some practitioners are already building toward this vision.

Robert Nichol Jr., a procurement automation expert, said three of these roles should merge into one position. “I would LOVE to pioneer: Director of Agentic Procurement,” he wrote. The role would cover end-to-end vendor management, procurement operations, internal and external communications, project management, RFP management, first-pass contract review, and risk monitoring.

“I’ve already built 75% of these automations and maintained them,” Nichol added. “Being given the remit to take them agentic would be NEXT LEVEL exciting.”

Dr. Muddassir Ahmed, founder of SCMDOJO, expressed enthusiasm for the concept. “I like Director of Agentic Operations!”

The Business Partner Role Gets Strong Support

Among the proposed roles, one emerged as a clear favorite: the Procurement Business Partner.

Davinia Watson, who holds this title, offered a passionate endorsement. “Having worked as a Procurement Business Partner for several years, I’m still amazed that more procurement functions haven’t adopted this model. The BP role is truly pivotal. It creates real value by acting as an extension of the business, understanding priorities, aligning strategies, and shaping solutions that drive outcomes.”

She added, “Out of my entire procurement career, it’s been my favourite role.”

Tanya W., a senior procurement transformation advisor, noted she has had business partners in her teams for 15 years. Others confirmed the role exists but remains underutilized.

Khaldoun Abbas, founder of a procurement consultancy, said he would prioritize this role first. “It’ll be needed more than ever to orchestrate business needs, turn them into wins, and align Procurement’s key pillars with those evolving needs.”

Nicholas Ponzo, Vice President of Procurement Operations at MSCI, agreed. “This is a key element to shift from a reactive to proactive procurement org, which I believe is the first step in transformation.”

Meads predicted the role will spread beyond large organizations. “My prediction is that we’ll start to see it in smaller teams too, as they realise that a business-facing rather than supplier-facing team member is a valued addition to their structure.”

Not Everyone Agrees on the Approach

Felipe Solano, a procurement manager in the food industry, raised a practical concern. Are these five roles already part of what mid-level and senior procurement professionals should manage?

“Procurement and its real purpose is yet to be well defined, implemented and established at the vast majority of small and medium organisations,” he wrote. He pointed to a gap between expert visions of where procurement should head and the reality of what companies actually hire for.

Meads pushed back. “If Category Managers or Sourcing Managers are expected to do this as part of their role, then organisations will always be mediocre at best. You need to specialise.”

He cited Adam Smith’s division of labor principle from The Wealth of Nations. “Most procurement folks are not strong communicators or experts in automation. And, in fairness, they never needed to be. They were taught to follow process and err on the side of caution. It doesn’t work any more in today’s economy.”

Thomas Steinmetz, a transformation leader, offered a different perspective. “Not sure extinct is the right word. Evolution is to me more appropriate.” He questioned whether AI governance should be a procurement-specific role. “Procurement is part of end-to-end processes and making this into an isolated role does to me not bring the potential value.”

The AI Factor Changes Everything

Several commenters highlighted how artificial intelligence accelerates the need for new roles.

Asmaa Gad, who specializes in AI for procurement and supply chain, described the shift underway. “The shift from process guardians to orchestrators of AI-enabled operations is already underway. The teams that embrace these new roles will move faster than the ones still optimizing 50-page RFPs.”

Faiq Ali, who works on procurement digital transformation, emphasized the capability question. “Procurement roles will evolve fastest where leaders prioritise capability that translates intelligence into outcomes rather than repeating traditional category routines.”

Radha R., a global strategic sourcing leader, pointed to supplier relationship management as a function being transformed by AI. “With AI now enabling deeper insights into strategic spend and analytics, SRM is evolving into a critical backbone of the enterprise. It anchors risk management, governance, and resilience.”

Meads agreed that related functions will consolidate. “I believe SRM, CLM and VLM will all merge into one role to give that holistic, end-to-end view of both supplier and contract performance.”

What This Means for Hiring Managers

The debate reveals a profession at an inflection point. Traditional job descriptions emphasize process compliance and cost savings. The emerging vision centers on speed, business alignment, and AI orchestration.

Socrates C T summarized the shift well. “Looks less like replacing procurement and more like upgrading it to ‘enterprise value edition.’”

For companies still posting category manager roles with 2015-era requirements, the message from practitioners is clear: the talent you need may not apply for jobs that sound outdated.

Edward Murphy, founder and CEO of FactorySpec, endorsed the entrepreneur concept. “Love the entrepreneur role. A must in every department if you ask me.”

Meads sees early movers gaining significant advantage. Better talent attraction. Higher retention of top performers. Several times more productivity from existing team sizes.

The question he leaves with hiring managers: which of these five roles would you hire first?

Join the conversation with procurement and supply chain professionals on Chain.NET. For AI tools designed specifically for the industry, visit Chaine.AI.