AI is already rewriting procurement work. Spend analytics, supplier discovery, contract review, risk monitoring, and negotiation preparation are all being reshaped. Yet across enterprises, the same pattern keeps showing up. Teams buy the tool, run the pilot, and discover that AI did not solve the problem. It exposed one.

That gap framed a GSCC Executive Roundtable with procurement and supply chain leaders from HSBC, ACWA Power, Dell Technologies, GE HealthCare, and Domino’s. Their conclusion was consistent. The bottleneck is not the technology. It is the operating discipline underneath it.

AI does not fix fragmentation. It accelerates it.

Ankit Kulkarni, Head of Inventory Systems and Supply Chain Performance at ACWA Power, put it plainly. Procurement is not primarily behind on AI. It is behind on the operating discipline needed to use AI reliably.

No model compensates for fragmented supplier records, inconsistent taxonomies, or unclear process ownership. He has seen the gaps directly in master data, commodity mappings, specifications, and critical spare planning. AI can interpret language and find patterns at a scale humans cannot match manually. But if the source is incomplete and nobody owns the exceptions, it simply produces a faster version of existing uncertainty.

Ujjwala Mishra, OM Leader for India and South Asia at GE HealthCare, made the same point from a different angle. AI should not be a layer sitting on top of procurement. If the systems underneath are fragmented, the result is garbage in, garbage out. AI should remove layers, not add one.

Sandeep Sharma, Director of Group Procurement and Supply Chain at Domino’s, raised the data-history problem. Machine learning often needs two and a half to three years of data before inferences become reliable. He also questioned whether cross-functional data exists at all. If a procurement spike is caused by a marketing promotion, is that relationship even visible to the model?

Two kinds of maturity

Ajaay Kapur, VP and Head of Procurement at HSBC Group, argued that data, skills, and governance are subsets of a larger issue. What matters first is the ecosystem. That is a top management decision about direction, followed by a deliberate effort to identify manual and non-value-adding processes across functions.

At HSBC, that shows up structurally. Risk owns AI governance. IT owns adoption and tool selection, working with the business on requirements. Procurement owns the process. The organization also signed an agreement with LinkedIn requiring employees to complete 30 to 40 hours of AI training with certification attached.

Mishra summarized the requirement as two maturities working together. Digital maturity gives you connected data, platforms, and technology. Enterprise maturity gives you standardized processes, governance, ownership, and capability. AI readiness depends on both.

Kim Beng Chan of Dell Technologies added a practical note about scale. Many SMEs simply do not have the data yet, because years of records still sit in hard copy in a warehouse. Digitizing comes first, then data hygiene, then governance, then security. Enterprises can fund data scientists and architects to run that. Smaller firms cannot assume the same starting line.

Where to actually start

The panel converged on a narrow-scope approach.

Kulkarni laid out three foundations. Start with a small bounded domain and one specific decision area rather than an enterprise-wide data program. Define a common language, meaning agreed identifiers, category and commodity structures, critical definitions, ownership, and basic quality rules. Then assign a business owner to every critical field and exception, because AI will never own an unresolved gap or a conflicting business rule. The third foundation is a repeatable exception process that distinguishes valid results from low-confidence recommendations and missing evidence, with a defined reviewer for each route.

Sandeep Sharma stressed sequencing and honesty about returns. Pick the highest-priority function where backups exist and ROI is clearest. In his experience, AI does not deliver ROI inside 24 months, and during implementation the human brain still carries roughly 60% of the load against AI’s 40%.

Asked how clean the data must be before starting, Mishra offered the most useful reframe of the session. There is never a perfect moment. Take a contract renewal covering 500 suppliers with inconsistent payment terms, messy descriptions, and missing fields. The instinct is to declare the organization not ready. Instead, decide what you want to improve, such as expiry dates, categories, and commercial terms. Let AI surface the 20 contracts that need urgent attention, then clean outward from there.

Kapur described the same logic through a PeopleSoft to Oracle migration, where AI helped identify duplicate supplier records registered under name variants before the data moved.

Who owns it, and who checks it

On ownership, Kulkarni drew a clean line. Procurement defines the process and the objective. IT owns the data architecture and cybersecurity. IT does not decide what gets verified as an exception. When procurement and IT disagreed at his organization, the resolution came through a business case with quantified outcomes and minimal spend, since the solution was built in house rather than purchased.

Kapur described a handover model borrowed from automotive, where a new-model team passes a matured process to mass procurement. Once his Oracle Fusion implementation stabilized, procurement handed operations to IT so the function could move to the next project.

On blind trust, Mishra gave the sharpest example. AI may recommend a supplier based on a flawless delivery history. The buyer knows that supplier just had a fire at its plant. AI will never surface that. Use AI as a copilot, never on autopilot.

Takeaways for procurement leaders

Learn AI architecture, not prompting. Kulkarni’s strongest advice was that copying and pasting data into ChatGPT or Copilot is not AI adoption. He built spend classification for 200,000 line items in house using Python connected to Azure OpenAI, plus a semantic and lexical matching model that found duplicate master data across 111 assets in 16 countries. Commercial equivalents run into six figures.

Fix the process before you automate it. Asked how to repair broken processes without a two-year project, Kulkarni recommended bringing an operational excellence expert alongside management. Mishra offered a lighter alternative for teams without one: value stream mapping. Map the steps, find where the process breaks, then iterate.

Where is your procurement data weakest, and what would you have to fix before you trusted an AI recommendation in a sourcing decision?

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Every procurement function has the same complaint. We get brought in too late. The supplier is chosen, the price is emotionally agreed, and the function inherits a compliance job dressed up as a sourcing decision. The standard response is to tighten policy, add an approval gate, and escalate. It rarely works, because the problem was never that stakeholders forgot the rule. It is that calling procurement did not feel useful.

The alternative is tactical rather than structural, and procurement writer Tom Mills laid out ten habits from his own practice. Meet stakeholders before you need them. Learn what they are measured on, not what their job title says. Give bad news straight and in person. Never raise a concern in the room for the first time. Bring two options, not one. Follow up in writing within the hour. Give a recommendation, not a report. Make compliant the easy option. Find out what they are being asked in their next meeting. Tell them what you would do with your own money.

The list is unglamorous and entirely behavioural. What the responses added was a rough consensus on which of these actually moves the needle, and why.

Read more

Coupa replaced its chief executive in late August. Leagh Turner stepped down. Michael Lipps, a Thoma Bravo operating partner who has sat on Coupa’s board since 2023, took over the following Monday.

Two weeks on, the personnel story is finished. The argument it set off is not, and most of it has very little to do with Coupa. Analysts, chief procurement officers, board directors and vendor founders filed several hundred public comments in a week. Read together, they amount to the most candid public audit of procurement software the market has produced this year.

The background is short. Thoma Bravo took Coupa private in 2023. Rob Bernshteyn, who ran the company for 14 years, left the same year. Turner arrived from Ceridian in November 2023 and led through a take-private, four acquisitions and an AI cycle that aged every legacy platform. Lipps is the fourth name at the top in roughly 40 months. Two of those appointments came from the sponsor.

Orchestration finally got cross-examined

Intake and orchestration has been the loudest category story in procurement for two years. The threads split on whether it is a product category or a symptom.

Jason Busch of Spend Matters argued the wave came from something real. Suites promised a clean process and delivered something else when the work broke down under actual conditions. Buying starts messy and cross-functional and almost never inside a purchase-to-pay workflow. Challengers built their entire go-to-market on that gap.

Koray Köse of KŌSE Advisory called orchestration a symptom of unmodernized procurement organizations and restless capital, not a destination. He brought numbers. MIT’s NANDA initiative found that 95% of enterprise generative AI pilots deliver no measurable profit-and-loss impact, against $30bn to $40bn chasing the promise. Procurement technology specifically reports implementation failure rates of 80% to 95%.

Practitioners were harsher than either analyst. Tony Marino, a CPO and board director across private equity portfolio companies, wrote “Orchestrator tools are kinda B.S. for me” and described them as a way for CPOs to look like they are enabling the business.

Rob Turner, a chief procurement officer, gave the most useful diagnosis in either thread. He sees implementations fail because orchestration layers sit on infrastructure that cannot carry them. His test question for any vendor is “where is the data foundation maintained”. He argued that procurement teams now need people with genuine source-to-pay architecture expertise on staff. Andrew Daley of Edbury Daley agreed that most CPO teams lack it and called operating without it a false economy.

That is the practical takeaway from the entire debate. If nobody on your team can answer the data foundation question, you are buying an interface and calling it a strategy.

Data is not an advantage until it can act

The strongest consensus had nothing to do with leadership.

Matt Zimmerman of Prime Digital Solutions made the point across both threads. Intelligence sitting behind dashboards is not a moat. The contest is “who can turn intelligence into governed execution at scale”. Knowing what should happen, knowing what you are authorized to do, and actually getting it done are three separate problems. Most vendors have solved the first one.

Georg Wall supplied the missing half. Agents need structured, real-time access to what can actually be bought, including prices, availability, alternatives and commercial rules, plus the authority to transact. That is a different problem from catalogs and punchouts. Busch endorsed it as a sixth priority to his own list.

Derek White argued the data only pays off if it becomes a procurement-specific language model with a knowledge graph for governance. He also warned that switching-cost protection may already be running out for some accounts.

Marino delivered the customer verdict in one line. Getting value out of the data takes too much effort, and it should be instant. That is what a paying enterprise customer thinks about a decade of accumulated spend intelligence. Every vendor claiming a data moat should read it twice.

Somebody pays when a pilot fails

Köse raised a point nobody else did, and it applies across the sector.

When an orchestration or agentic pilot fails at the rates already documented, the customer rarely blames the vendor in public. The team quietly returns to the incumbent platform to patch the data, reconcile the mess and restore the workflow the failed tool broke. Internally, that gets narrated as loyalty. Köse calls it a hidden tax. The incumbent’s support organization absorbs the operational cost of somebody else’s failure, usually for free, and never gets paid for the risk it just underwrote.

Buyers should invert that. If your team has quietly rebuilt what a failed pilot broke, the cost belongs in your business case and your vendor scorecard, not buried in support tickets. Failed procurement pilots are almost never accounted for honestly, which is exactly why the failure rate stays high.

Busch’s version of the same exposure runs the other way. He believes customers are already developing alternatives their incumbent has not detected, and put the window at roughly 18 months before quiet renewal conversations turn into real suite losses.

Leadership churn belongs in your risk register

Marcel Van Wonderen framed why any of this matters beyond one vendor. Many companies have made themselves materially dependent on a single platform. The direction that vendor picks sets the direction of their procurement function. That is concentration exposure, and it deserves the same treatment as any Tier 1 supplier.

Jack Miles of MainSpring Advisors asked the governance question directly. A board member stepping into the seat raises whether the move was sudden or long planned. He put the correction at six to 18 months and warned that a further leadership change would end the reset. Patrick Scully, a non-executive director, read the appointment plainly: “this is a signal that Coupa will be shopped soon”.

The dissent was blunt. Michael Lamoureux argued the platform is now a single interface rather than a coherent suite and said “Coupa’s glory days ended with Rob Bernshteyn’s departure”. Markus Hornburg’s judgment on the years since drew the widest agreement in its thread.

Others pushed back. Javier Carnevali and Michelle T. defended Turner’s record on customer focus and culture. Köse opened his own piece with a tribute to her stewardship through a take-private and a brutal AI cycle.

Two lines summarized the risk better than any analysis. Jan-Henner Theissen wrote, “Sometimes assets can become a burden”. Van Wonderen pressed the same nerve: “Sometimes doubling down is just refusing to turn around”. Both apply to any incumbent vendor sitting on a large installed base, and to any procurement team that built its process around one.

How to read vendor proof

Two exchanges are worth more to buyers than the strategy talk.

Tricia Miller, a former Accenture procurement leader now at Coupa, cited a 2026 Gartner Customers’ Choice distinction for source-to-pay with a 99% willingness-to-recommend rate. Busch challenged the methodology, arguing that crowdsourced peer models are a different instrument from analyst research, and said a board should watch net promoter score over time as the leading indicator of net revenue retention. Whatever you conclude, the exchange is a reminder that badges in a vendor deck do not all measure the same thing, and few buyers check which is which.

Köse also asked Nico Bac, founder of Digital Procurement Now, to declare his commercial relationship with a competing vendor before endorsing a position. Procurement technology commentary runs heavily on relationships that are never stated. Somebody finally said so in public.

Takeaways

Treat vendor leadership change as supply risk, not industry news. Run the same review you would run on any critical supplier under new ownership. Document your dependency, your switching cost and your realistic alternative before the renewal conversation, not during it.

Set a diligence standard for every agentic vendor you evaluate, incumbent included. Know which model runs underneath, who controls the weights, whose data pipeline it uses, and where the legal exposure sits the day it fails. Demand a validated, monetizable use case with measurable KPIs before signature. A demo is not evidence.

Audit your own data foundation before you buy another layer on top of it. Ask who maintains it, who owns governance, and whether anyone on your team can defend the architecture. That question decides more implementations than the vendor selection does.

What would you change in your vendor review process after reading this?

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The shift underway in procurement is not about adding another AI tool to the stack. It is about a function moving from using AI to being powered by it. That was the takeaway procurement writer Tom Mills brought back from a day at Amazon Business Exchange in London, and the framing he offered has proved unusually durable: not AI replacing procurement teams, but AI taking the weight off them so they can focus on the parts of the job that actually need a person.

Five ideas anchored the argument. AI does not remove the need for great teams, it raises the bar, because two teams given identical technology still produce different outcomes. AI is starting to act rather than answer, taking the next step instead of responding to a question. The boring foundations matter more than ever: data, then integration, then optimisation, in that order, and you do not get to skip the first part. Procurement’s biggest AI opportunity might be time itself. And the ambition should stretch past efficiency toward something more commercial, more strategic, and more human where being human matters.

The question posed to readers was which of the five matters most. The answers split cleanly into two camps, and the more interesting argument happened inside the winning one.

Time Won. Then Came the Caveat.

The time argument drew the most support, and the most immediate qualification.

Strahinja Jovanovic, who builds supply chain operations in eCommerce, put the caveat first. “Freeing up time does not automatically create better procurement. Teams also need to be deliberate about where that time goes. Otherwise the administrative work disappears and gets replaced by a different set of low value activities.”

That is the failure mode nobody plans for. Automation removes a category of work and the vacuum fills itself, usually with meetings, reporting, and a different flavour of administration. The capacity gain is real and entirely invisible on any measure that matters.

Mark Strange, a transformation leader, took the point further and landed on the sharpest reframing in the discussion. “The opportunity is not really the time AI gives back. It’s what we choose to do with that time. If we automate transactional work and simply fill the space with more activity, we have improved efficiency but changed very little.”

His conclusion inverted the original question. “Perhaps the question is not just what could procurement become? It’s what do we want our people to become better at? Because AI can create the capacity. Leadership still has to decide what that capacity is for.”

That distinction matters operationally. Capacity is a technology outcome. Direction is a management decision, and the second does not follow automatically from the first.

Pierre Mitchell, a longtime procurement technology analyst, grounded the argument in economics. “Economic cost equals opportunity cost. The biggest cost in procurement is the opportunity cost of resources, in a function that delivers 5x to 10x ROI, wasting time on low impact tasks versus investment of their time into high impact activities that build way greater capabilities.”

Framing recovered hours as an investment decision rather than a productivity gain changes how they get allocated. A CFO would never let a 5x-return function reinvest capital without a thesis. Time gets treated with far less rigour.

Hazel Tinsley, a procurement and third-party risk leader, named where it should go. “More time for judgement, relationships and understanding the wider enterprise, rather than simply doing the same things faster.”

The Unglamorous Prerequisite

The second camp argued that none of this happens without the foundations, and their case was harder to romanticise.

Georgia Giannia, a senior IT procurement professional, delivered the line that best captures the problem. “Everyone wants the clever use case, nobody wants to reconcile the vendor master, but you cannot optimise spend you cannot see, and that is where most of the value has always been hiding.”

That last clause deserves weight. The value was never trapped behind a missing AI capability. It was trapped behind a vendor master nobody wanted to clean. AI does not unlock it. It simply makes the failure to unlock it more expensive.

Frederick Magana, a CIPS Fellow, described what the work actually involves. “AI adoption requires a lot of heavy lifting with data cleansing, approval workflow alignments, procurement process mapping. Unfortunately people usually see the end product.”

Nuha Luqman, working in energy supply chain, stated the dependency plainly. “Without clean data and integrated systems, the promise of AI collapses. Get the basics right, and the opportunity becomes transformational.”

The two camps are not actually in conflict. The time argument describes the destination. The foundations argument describes the toll booth. Functions that skip the second and campaign for the first end up with expensive automation running on data nobody trusts.

AI as a Governed Teammate

A separate thread addressed what happens when AI stops answering and starts acting.

Esther Adorable Emoedume, who builds procurement AI, drew the line most precisely. “AI should become a governed teammate, not an unsupervised decision maker. Procurement professionals should retain accountability. While AI does the information work, the human makes the consequential decision.”

That formulation, information work versus consequential decision, is a cleaner operating boundary than most AI governance frameworks manage in several pages. It also implies something uncomfortable: the boundary only holds if someone maintains it deliberately. Agentic systems drift toward taking more steps because that is what they are built to do.

Rebecca May Shah, a commercial lawyer working in AI governance, confirmed the pattern outside procurement. “These closely align with the changes in the Legal world. AI will help us, and act as a starting point, but it cannot replace human judgment or relationships.”

Hisham Serry, a supply chain consultant, noted a measurement practice worth copying. “Some companies have started to track the time saved by Copilot Cowork and are beginning to utilize that additional time for other more procurement thinking activities.”

Tracking recovered hours is the only way to know whether capacity is being redeployed or quietly reabsorbed. Very few functions measure it at all.

The Widening Gap

The most consequential prediction came from Rebecca Bellairs, co-founder of a marketing pitch platform. “The already strong teams are going to catapult into previously unknown performance levels with the appropriate use of AI in next few years. And the cost and cash obsessed tactical set ups are going to really struggle. The tools are just applying a magnifying glass and multiplication to what you’re already doing.”

Her warning about skill investment cut against the prevailing training rush. “Potentially too many people focusing only on AI fluency and not on upskilling in their own subject matter expertise. Both are essential.”

Abhishk Sinha, a procurement leader formerly at Maersk, compressed the same idea into a sentence. “AI will expose which procurement teams were strategic all along.”

That is the uncomfortable corollary of the raises-the-bar argument. Identical technology producing different outcomes is not just an optimistic note about culture. It means the distribution widens, and functions currently mistaking activity for strategy will find that harder to hide.

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, decide what the capacity is for before you create it. Automation without a redeployment thesis produces efficiency and changes nothing. Leadership owns that decision, not the technology.

Second, fix the vendor master before the use case. You cannot optimise spend you cannot see, and the value has always been hiding behind exactly the work nobody volunteers for.

Third, track the hours you recover. If nobody measures where saved time goes, it does not go anywhere useful. It gets absorbed.

If AI gave your team back a day a week starting Monday, do you know what you would have them do with it?

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

The contradiction is easy to miss until someone states it plainly. A procurement professional is required to be physically present in a service centre or office, while the travel budget that would put them in front of a supplier or on an operational site has been cut. As Linda Tomsone, a strategic indirect procurement partner, framed the problem: that is optimising for presence, not value. Her stakeholders, suppliers, and markets are spread across the world. The office is in a different country from the plant. Most of the work with suppliers and key stakeholders already happens by phone or online. So what exactly is the desk achieving?

The question landed because it names a policy most functions have accepted without examining. Procurement is built on relationships, trust, and influence. Physical presence genuinely matters. The argument is not against presence. It is against presence in the one location where it produces the least return.

The discussion that followed produced broad agreement, one genuinely uncomfortable rebuttal, and a set of operating questions the original framing left open.

The Rebuttal Worth Taking Seriously

The sharpest challenge came from Aleksandr Bondarenko, a manufacturing procurement leader, and it deserves airing in full because it exposes the weakest part of the case.

Read more

There is no university course for sourcing executives. You can study buying, product management, or marketing. You cannot study how to build a factory network across four continents, absorb an overnight tariff shock, and keep 10 suppliers investing in your brand at the same time.

That gap is one reason the path to the top of sourcing looks different for everyone who gets there. Laurent Madelaine, Chief Product and Supply Chain Officer at Gymshark, started his on a Carrefour shop floor. Thirty-five years later, after building Carrefour’s Bangladesh sourcing office from scratch in 2001, running clothing and footwear sourcing for Tesco from Hong Kong, and leading end-to-end operations at Lacoste, he has a clear view of what separates the brands that get sourcing right from the ones that treat it as a cost line.

Start by walking in someone else’s shoes

Madelaine’s early career spanned stores, buying, and merchandising before he ever touched sourcing. He credits that range for much of what came later. When he landed in Bangladesh, he knew exactly what buyers wanted and where the gaps were, which mattered in a country no one at head office had worked in.

His framing of the role is direct. Sourcing is a service function for the rest of the business, even while it shapes strategy. Supply chain is a chain, a group of people who work together and hand over to each other. Losing sight of that turns the function into a bottleneck instead of an enabler.

Partnership means standards plus emotional attachment

Ask Madelaine what world-class supplier partnership means and he splits it in two.

The first half is standards. You need world-class manufacturers and industry specialists who can go deep on materials and technology, operating state-of-the-art factories. Size is not the issue. Doing it the right way, with real investment and real passion, is. Where a supplier falls short, you either help them reach the benchmark or you raise your expectations.

The second half is harder to systematize. You need emotional attachment to your brand. That means the supplier matters to you and you matter to them. At Lacoste, he ran supplier conferences during the French Open in Paris. At Gymshark, suppliers get invited to the Lift event. The point is not to review quality standards. It is to let suppliers see the brand, the community, and the customer, then explain what the business wants to do next.

The commercial logic is straightforward. If you do this well, suppliers want to invest in your business. Ten partners each investing a million dollars a year gives you ten million dollars of investment and a competitive advantage that is hard to copy.

The traffic runs both ways. Madelaine takes CEOs, buyers, marketing, and merchandising colleagues to visit factories. They take ownership of the relationship and they communicate the brand better afterward.

Partnership is not friendship

He is blunt about the limits. Partnership does not mean friendship. It is business. As a brand, you feed the supplier with volume. Growth brands find partnership easier to build because they invest to do better and to do more. Suppliers commit because you bring business, create jobs, and improve their margins, not because the meetings are pleasant.

What sustains it is consistency. Do what you said. Change plans or send mixed signals and trust erodes fast. He recalls telling suppliers directly that his planning was not accurate during a period of rebuilding. Suppliers can work with that. What they cannot work with is discovering a problem nobody mentioned.

Consistency has to hold across the team too. If the sourcing executive says one thing and the buyer says another, the strategy collapses on contact.

De-risking is the whole job now

On risk, Madelaine’s philosophy starts with end-to-end thinking. Fiber, material, trims, everything. You cannot produce a garment if you are missing a zip, a yarn, or a dye.

He rejects the idea that disruption is new. Early in his career, anti-dumping actions and embargoes hit overnight, and the postponed end of the China quota system left goods floating and unreleasable at customs. What has changed is the ability to anticipate. Being on the ground used to give you warning. Now you can wake up to 100% duty and see it reset to zero the next day.

His recent example: when the United States announced new duties and Vietnamese product faced a sharp increase, his team kept calm, assessed the situation, got the right people around the table, and modeled scenarios. Because some of their sourcing sat in countries that were duty-free to the US and then faced only the 10% minimum, they shifted volume from the Middle East to Asia and from Asia back the other way. The result was a US supply base distinct from the European one.

His verdict on the wait-and-see camp is nuanced. You work on the plan and wait. Rushing overnight is never good when stock sits in your DC, on the water, and in production. But waiting while doing nothing is not a strategy. Know your options and measure what you can absorb financially.

AI: own the process first

Madelaine sees AI moving fast in Asian factories, including fabric defect detection, and encourages suppliers to invest. For brands, his advice is sequenced. Know your process properly. Identify which parts are genuinely painful. Then apply AI where it brings accuracy and speed, which flows through to cost.

He points to critical path management, container consolidation, and costing as strong candidates. Instead of people typing into spreadsheets, resource shifts to development and innovation. His caution is about ownership. You cannot delegate a process you do not understand to a machine, and you need to protect the know-how that forms your brand’s DNA.

Takeaways for sourcing leaders

Hire for curiosity, not just technique. Madelaine says technique can be learned. What cannot be taught easily is the willingness to travel, to check assumptions, and to accept that what was true five years ago is false today. He nearly missed Morocco’s revival because he assumed the industry had not moved. A younger generation had rebuilt it and was running fast-turnaround programs for Zara.

Talk about what you have seen, not what you think. A Tesco boss taught him to go to the right level of detail to find the truth. If you have not been in the factory, you do not know.

Nearshoring is a tool, not a doctrine. It only works if the materials are close too. Producing near home while shipping fabric from Asia lengthens lead time rather than shortening it. Treat it as part of a de-risking mix and as a company project, not a sourcing project.

Does your leadership team visit factories, or does it rely on reports from 10,000 kilometers away? And where would you start if you had to rebuild supplier trust from zero?

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

Your pilot worked. The demo impressed the board. Twelve months later, the P&L has not moved.

That gap is now the defining problem in supply chain technology. Spending is not the constraint. Gartner reports that 72% of supply chain organizations have deployed generative AI, yet most see middling results on both productivity and ROI. The tools are live. The returns are missing.

Read more

Every procurement team knows the asymmetry. A negotiated price cut lands on a tracker, gets reported to the board, and earns the function its budget for another year. Deflecting a supplier’s 12 percent price increase, killing a spend request for a service nobody needed, or catching a supply risk before it becomes a shutdown produces nothing visible at all. The money never left. There is no before-and-after line to point at. As procurement writer Tom Mills put it in laying out the distinction, cost avoidance is arguably the bigger and more important job, and it is the part that largely goes unnoticed, right up until the organisation decides it does not need procurement, because the numbers were never on a tracker, or because Finance did not believe them.

The argument drew procurement executives, category leaders, consultants, and CFO-side voices into a debate that split cleanly. On which discipline creates more value, the verdict was close to unanimous. On whether procurement can prove it, almost nobody was confident.

Reduction Has a Ceiling. Avoidance Does Not.

The clearest structural case came from Navnith Hanumanthappa, who builds procurement technology. “Cost reduction has a ceiling. You can only negotiate so deep before you hit supplier profitability. Cost avoidance has none, because you’re catching bad spend before it’s committed. The hard part is proving a negative. Finance won’t credit money you never spent. Which is also why it’s the bigger job.”

Kshitiz Kumar, a procurement consultant at Alvarez & Marsal, added the compounding argument. “Reduction is a one-time step-down. Avoidance always compounds: every price increase you deflect resets the baseline suppliers negotiate from next cycle.”

That point deserves more attention than it usually gets. A price cut is a single event that improves this year’s P&L. A deflected increase permanently lowers the base from which every future negotiation starts. Over a multi-year horizon, the second is worth considerably more, and almost no savings tracker is built to show it.

Cynthia O’Dell, a procurement transformation VP, framed the visibility problem in the sharpest terms. “Preventing a $5M exposure is less visible than delivering a $500K price reduction, even though the business outcome may be far greater.”

The Baseline Problem

Where the discussion turned genuinely useful was on why avoidance fails to convince Finance, and what would fix it.

Amine Assaoui, a procurement transformation advisor, located the failure precisely. “What makes cost avoidance difficult is that, when it works, it often just looks like the business stayed on budget. Procurement may prevent millions in supplier increases, challenge unnecessary demand, close contract gaps or avoid costly risks. But because those costs never materialise, there is no obvious saving on the P&L.”

His prescription was the most practical in the thread. “The real challenge is agreeing the baseline upfront with Finance. Otherwise, procurement says it protected millions while Finance simply sees that the budget was respected.”

That sentence describes the trap most functions live in. Procurement claims value. Finance sees a budget that held. Without a jointly agreed baseline established before the intervention, those two readings never reconcile, and Finance’s version wins every time.

Amol Ghanekar, a global procurement leader, reframed the whole issue away from recognition and toward governance. “The bigger issue is governance rather than recognition. Until Finance, Procurement and the business align on how cost avoidance is defined, validated and reported, the conversation becomes about defending the numbers instead of demonstrating value. Cost reduction improves today’s P&L. Cost avoidance protects tomorrow’s P&L. The real test is whether we measure prevention with the same discipline as realized savings.”

Mariia Studentcova, a senior procurement leader, offered a concrete mechanism. “Provided a precise measurement methodology is strictly followed and both are validated by Finance, I would add the Savings vs. Budget as a smart way to recognize cost avoidance at the P&L level.”

Matthias Svetic, a negotiation advisor, suggested the presentational fix. “Most stakeholders can’t picture a cost that never happened. Maybe the fix is showing the before and after price on every deal, not just the total saved.”

The Dissent Worth Reading

Not everyone voted for avoidance. Olca Kazanci, a senior strategic buyer, made the case for the discipline that actually pays the bills. “Cost reduction reflects to the budget directly, cost avoidance takes much more time from the procurement time but only impacts on the unnecessary spend. My vote is 1.”

Patrick Richards, a category management and sourcing transformation leader, gave the fullest answer to why reduction remains the default. “Avoidance can be squishy, getting alignment on finance on the calculations, scenarios, etc. to recognize the impact is KEY. Why is savings the standard? It’s easy to track and historical, plus not a crystal ball.”

But his primary vote went the other way, and his reasoning added a dimension the rest of the debate largely missed. “As product assortment changes over time, it is CRITICAL that sourcing improve the product margin UPFRONT. All the work sourcing puts into New Product Intros is a major unlock to the future of the business. It’s where the company is placing its next bet via marketing, sales incentives. A few more percentage points can make a BIG impact for the P&L.”

Randy Piechowicz, who ran procurement finance at a global function, settled it from the CFO side. “The answer is both. When I was a global procurement CFO I had my team develop tracking, reporting, and analysis of both, along with graphics for executive level reporting.”

Where Avoidance Actually Happens

Several practitioners pushed the definition upstream. Veera Baskar K, a supply chain consultant to mid-sized manufacturers, made the point most cleanly. “The strongest form of cost avoidance starts before RFQs are issued. When Procurement is involved during product design and demand planning, decisions around specification rationalisation, MOQ optimisation, and inventory policies prevent costs from entering the system instead of negotiating them away later.”

Vicki Munson, a procurement executive, quantified the cost of late involvement. “When we are not involved, the quote is accepted as is, which oftentimes can equate to 20 to 30 percent more than when Procurement is involved from the beginning.”

Gokulakrishnan Srinivasan offered a concrete IT example. “Anticipating OEM price revisions driven by memory and storage cost increases, we forecasted demand and purchased early. The result wasn’t a bigger discount, it was avoiding future cost escalation and protecting the approved budget.”

The Vocabulary Problem

The bluntest observation came from David Račak, a procurement AI consultant, and it undercuts much of the sophistication above. “Most stakeholders doesn’t see difference between cost avoidance and savings. We need less terms and more easy metrics.”

That is worth sitting with. Procurement has built an internal vocabulary that the rest of the business does not share and has no incentive to learn. John Jodka, a supply chain director at General Dynamics NASSCO, made the same point from the receiving end. Avoidance is always worth more, “but most organizations see that as a part of the job description.”

If the business considers preventing unnecessary cost to be the baseline expectation rather than a delivered result, no amount of methodological rigour will earn credit for it.

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, agree the baseline with Finance before the intervention, not after. Avoidance claimed retrospectively will always read to Finance as a budget that simply held.

Second, move avoidance upstream. Specification rationalisation, demand challenge, and early supplier engagement prevent cost from entering the system. Deflecting a price increase at renewal is the last and weakest place to do this work.

Third, simplify the language. If stakeholders cannot distinguish avoidance from savings, the problem is not their comprehension. It is procurement’s insistence on terminology the business never asked for.

Does your Finance function validate cost avoidance with the same rigour it applies to realised savings, and if not, who is going to propose that it should?

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

The case arrived without hedging. Indirect procurement is already dead, argued corporate advisor Ramesh Krishnamoorthy, and most organisations lack the courage to read the autopsy report. The team of fourteen at headquarters is not transforming. It is a legacy structure held together by politics and by leaders who would rather protect headcount than confront an uncomfortable truth. Vendor onboarding, spend analytics, contract extraction, RFx creation, risk scoring, all now automated. Generalist category managers get dismantled by vendor commercial teams that do nothing but that category, across fifty clients at once. Savings that never reach the income statement. Stakeholders who route around the function entirely, because shadow procurement is a rational response to organisational failure rather than rogue behaviour.

What survives, by that reckoning, is two or three people. One to govern the outsourced model, one to manage AI platforms, one for compliance. No VP. No layer of directors. No category lead for every spend bucket.

The argument spread quickly through the procurement community, drawing CPOs, interim directors, transformation advisors, outsourcing providers, and category specialists into an unusually candid exchange. What is striking is how little of the response defended the existing model. The fight was over the arithmetic.

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Most organisations still treat procurement as a cost centre. That framing is increasingly a strategic mistake. If procurement influences profitability, resilience, risk, sustainability, innovation, and capital allocation, why is it still measured primarily through savings? The question sits at the heart of a framework called the Procurement Value Creation Ecosystem, built on a simple premise: procurement does not create value through a single activity. It creates value when disciplines, capabilities, technology, and judgement work together. Sourcing, supplier management, risk, finance, ESG, and operations, supported by negotiation and stakeholder skills, enabled by data and AI, all connected to help the business make better decisions. Because that is where procurement’s real contribution starts. Not in the process. Not in the dashboard. In the quality of the decisions that follow.

The framework drew procurement directors, CPOs, consultants, technology founders, and a supplier voice into an extended debate. The agreement that savings alone undersell the function was near universal. What deepened the conversation were the layers contributors added: decision integrity, revenue enablement, and the honest paradox of proving strategic value before being given a strategic role.

From Transactions to Outcomes

The cleanest reframing came from Colin Ricardo, Founder and CEO of Digital Optima. “Procurement is often still measured like purchasing. Cost in, savings out. But purchasing executes transactions. Procurement orchestrates outcomes. The distinction matters because the moment you start managing risk, resilience, supplier relationships and capital allocation, you are no longer running a cost centre. You are running a decision engine for the business.”

His conclusion drew the line between tools and judgement. “Technology gives you visibility. Judgement is what you do with it.”

The framework’s author extended the point. “Technology can improve visibility, but it cannot decide which trade-offs the business should accept.” That distinction runs through the entire discussion. The trade-offs, cost versus resilience, speed versus compliance, short-term savings versus long-term value, are where procurement earns its keep. As the author put it in a later exchange, “Perhaps Procurement’s role is not to eliminate those tensions, but to help the business navigate them consciously. That is where judgement becomes more important than process.”

The Decision Integrity Layer

The most original addition came from Ricardo Manuel Machado Ferreira, creator of a decision science methodology. “Procurement value is only fully protected when the decisions behind that value can be defended later. Savings can be reported. Dashboards can be shown. Supplier performance can be measured. But the harder questions are: why this demand existed, why this supplier path was chosen, which trade-off was accepted, what alternative was rejected, who owned the risk, what evidence supported the decision.”

His conclusion introduced a concept most procurement frameworks miss entirely. “The most valuable procurement organisations do not only help the business make better decisions. They help the business make decisions it can still defend when conditions change.”

His follow-up sharpened the principle into something every CPO should internalize. “A bad outcome is not always a bad decision. But an undocumented decision becomes very hard to defend when conditions change.”

That layer matters more each year. As supplier risk, ESG, and resilience become board-level issues subject to regulatory and audit scrutiny, the ability to show that a decision was conscious, evidenced, and defensible at the time it was made becomes a capability in its own right.

The Revenue Side Nobody Staffs

Howard Richman, a global procurement transformation leader and co-author of Procurement Confidential, pushed the framework toward the dimension procurement rarely claims. “A core discipline which needs to find its way into graphics such as these is Procurement Enabled Revenue, and how the function helps support the drive toward revenue growth. I see this as key to breaking away from the function always defining itself as a command and control ‘Savings R Us’ function.”

His examples from his own CPO tenure were concrete. “I had my team training our sales teams on how best to negotiate with customer procurement functions when trying to win new business. We also helped our New Product Development team with their licensing deals, and helped the software audit team with negotiations for underlicensed customers. All of this helped to enhance revenue growth.”

Craig Burnett, a supply chain professional, confirmed the gap. “It is under-valued, under-researched, under-focused on, especially on the direct side. I think this is one of the top 2 biggest value-levers that is used the least.”

That observation deserves attention. Procurement expertise in negotiation and commercial structuring is transferable to the revenue side of the business. The functions that lend it out change how the organisation perceives them.

Price Is What You Pay. Cost Is What You Bear.

The supplier perspective came from Mandy Tang, who runs a precision hardware manufacturer supplying NVIDIA, BYD, and Cooler Master. “From the supplier side, we see this play out every day. The lowest quote often isn’t the lowest total cost. Rework, delayed deliveries, extra communication, and quality risks all add up after the PO is signed. Price is what you pay. Cost is what you actually bear.”

The author’s reply distilled the measurement implication. “Price is a transaction. Total cost is the consequence of dozens of decisions made before and after the PO is issued. That is precisely why I believe procurement should be measured by business outcomes rather than negotiated prices.”

Fidel Ferreira, a supply chain and procurement professional, connected the lesson to recent history. “One thing many organizations learned during recent global disruptions is that the lowest-cost decision is not always the lowest-risk or most sustainable decision. That shifted procurement from being viewed as a transactional function toward becoming a strategic business enabler.”

The Knowledge Connector

A recurring theme reframed procurement’s core identity. Sanchita Sur, a GenAI founder incubated by SAP, named it. “Procurement creates the most value when it translates between finance, legal, operations, technology, and the supplier ecosystem, not by owning every answer, but by helping the business make better decisions.”

The author embraced the shift. “The more I reflect on procurement, the less I see it as a function that owns expertise and the more I see it as a function that connects expertise.”

Manivardhan Reddy B, a strategic sourcing lead at Huntsman Corporation, identified the missing piece in most organisations. “Perhaps the challenge for many organisations is not capability availability, but the architecture that connects capabilities into decisions.”

Urszula Woronowicz, a procurement and contract strategy leader in energy CAPEX, grounded the whole debate in the human element. “People create value by thinking ahead, managing risk, and recognising connections that others don’t see.” The author’s reply completed the thought. “AI can generate options. Data can reveal patterns. But recognising which patterns matter, anticipating second-order consequences and making decisions under uncertainty remain deeply human capabilities.”

The Seat at the Table Paradox

Claudia Cebulok, a leadership coach with two decades of procurement leadership, named the catch-22 that traps most functions. “To truly drive value, it needs a seat at the table, so it can show how it enables better business decisions. Ironically, proving that value is exactly what earns procurement a bigger seat, but that’s hard to do without being invited in to begin with.”

The author’s resolution was pragmatic. “The more procurement contributes to better business decisions, the more trust it earns. And the more trust it earns, the greater its opportunity to influence future decisions.”

Volodymyr Babilunga, a supply chain consultant, offered the practical maturity test. “One way to assess the maturity of a procurement function is to look at the conversations it has with the business. If every discussion revolves around price, procurement will probably be perceived as a cost centre. If discussions include resilience, growth, innovation, risk and capital allocation, procurement starts being recognised as a strategic business partner.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, measure decisions, not activities. Savings are one expression of value, but the function’s real contribution is the quality of the business decisions it enables and the trade-offs it helps the organisation navigate consciously.

Second, build decision integrity now. Document why demand existed, which alternatives were rejected, who owned the risk, and what evidence supported the choice. A bad outcome is not always a bad decision, but an undocumented one is indefensible when conditions change.

Third, claim the revenue side. Procurement’s negotiation and commercial expertise transfers to sales, licensing, and product development. The functions that lend it out stop being seen as Savings R Us and start being seen as a business accelerator.

Where does procurement create the most value in your organisation today, and is that where it gets measured?

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

For most of its history, fashion sourcing was treated as a commodity. Find a factory. Make a product. Ship it. Then COVID broke the supply chain, and the boardroom finally noticed that the part nobody wanted to own was the part that mattered most.

That shift sits at the center of a candid conversation with Anne-Laure Descours, former Chief Sourcing Officer at Puma and a 30-year veteran of the industry based in Hong Kong. She stepped down from Puma’s board at the end of 2024 and now advises brands, sits on boards, and backs recycling startups. Her view is direct. The old sourcing playbook is finished, and the brands still using it are already two years behind.

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A procurement career rarely follows a straight line. It is built from a series of choices that quietly compound over decades, each one nudging your perspective, your leadership style, and your professional identity in a direction you may not have planned. Direct or indirect spend. Specialist or generalist. Stay or move. Expert or leader. None of these decisions is binary, and most experienced practitioners will tell you the best opportunities of their careers were never part of the original plan. The value is not in picking the perfect path. It is in making each choice consciously rather than by drift.

The conversation gained traction online after a procurement veteran laid out ten major career decisions, from spend area and geography to company size and the choice between deep specialism and broad leadership. The post framed procurement as an adventure with many possible directions and closed with a simple formula for success: do what you are good at, do what you love, stay curious, and be bold. The post drew procurement leaders across pharma, fragrances, real estate, telecom, and CAPEX-heavy industrials. The agreement that careers are built from accumulated choices was universal. What deepened the discussion were the decisions contributors felt the original list had missed.

The Choice of Reputation

The most cited addition came from Luciano Corrêa Garcia, an executive procurement leader. “I would add one more decision: choosing the type of impact you want to be known for. Procurement careers are shaped not only by category, company size, geography or leadership path, but also by the value people associate with you over time.”

His framing turned reputation into a deliberate career lever. “Are you known for savings, risk management, supplier innovation, transformation, governance, stakeholder influence, or broader business value? That positioning matters. You can move across industries, countries, categories and roles, but having clarity on the impact you consistently bring makes those career decisions much more intentional.”

The author endorsed the point directly. “Reputation does matter. Over time people tend to associate you with a particular strength or area of expertise, and that can have a significant influence on your career path.”

That observation reframes the ten decisions. The category you pick and the company you join matter, but the through-line that follows you across every move is what people believe you are good at. That reputation is built on purpose or by accident, and the difference shapes which opportunities come to you.

Managing Suppliers or Managing Change

The sharpest single distinction came from Josemon M R, a procurement and supply chain leader in telecom and automotive. “One of the biggest career decisions is choosing between managing suppliers and managing change. The latter often becomes the foundation for broader leadership opportunities.”

That dividing line cuts deeper than the original post’s category-management-versus-transformation framing. Managing suppliers is the craft most procurement professionals are trained in and rewarded for early. Managing change is the capability that translates into general leadership. The professionals who consciously build the second skill set open doors the supplier specialists never reach.

The author had already gestured at this in the original list, noting that switching between category management and central excellence is entirely feasible. The comment sharpened it into a strategic choice with leadership consequences.

The Project Side Versus Corporate Side Gap

Wael Reda, a commercial director in real estate procurement, surfaced a decision the original list omitted. “One decision that deserves a place on this list is Project Side or Corporate Side. Working for contractors, consultants, developers, and corporate procurement functions teaches very different lessons.”

His reasoning connected the choice to commercial judgment. “The professionals who experience multiple perspectives often develop stronger commercial judgment because they understand how decisions impact the entire value chain, not just their own function. That broader perspective becomes invaluable as careers progress into leadership roles.”

The author conceded the omission honestly. “I did strongly consider this. As a consultant myself it was a big decision whether to stay in-house as an FTE or work outside. Both teach very different things. Having got to 10 good points, I ran out of space to fit it in.”

That distinction matters in project-heavy sectors like construction, energy, and infrastructure. The buyer who has only ever sat on the corporate side sees one slice of the value chain. The one who has worked for contractors and consultants understands how their decisions land downstream, which is exactly the judgment senior commercial roles demand.

Training Versus Hands-On Experience

Fateme Assar Kashani, who works in freight and logistics software, raised a foundational early-career decision. “Decide whether you’ll learn primarily through formal training and certifications or through hands-on experience in challenging roles. The best procurement professionals usually combine both, but knowing when to prioritize each can accelerate growth significantly.”

The author connected the choice to company size. “Typically the learning experience is quite different in larger versus small businesses who often train in more or less structured ways.”

That observation links two of the original decisions. The size-of-company choice is also a learning-style choice. Large multinationals offer structured training, certifications, and defined progression. SMEs offer accelerated hands-on responsibility with less formal scaffolding. The professional who knows which mode they need at each career stage can sequence their moves deliberately rather than taking whatever role appears.

The Move Decision That Resonates Most

Of the original ten, the decision to stay or move struck the deepest chord. Frederick Magana, a CIPS Fellow, spoke from experience. “Number 9 resonates with me a lot. After spending over a decade in one company I had to move to achieve career growth.”

That testimony validates the original advice with a caveat. The post recommended staying a minimum of three to five years per company, switching only if you are not growing. Magana’s decade in one place shows the risk on the other side. Loyalty has a ceiling. When the room to evolve runs out, staying longer stops being commitment and starts being stagnation.

The author’s own career arc, spanning more than four decades, underlined the broader truth that the rules have shifted. Times have changed, and the tenure expectations that governed earlier generations do not map cleanly onto a market where mobility is more accepted and sometimes necessary.

Procurement as Vocation or Accident

Felipe Solano, a procurement manager in fragrance manufacturing, raised an honest reflection on how people enter the field at all. “I’m not sure I know anyone, or heard of, who has had Procurement as a vocation for study-from-scratch career path and a clear direction of what area, sector or industry to get involved in.”

His own anchor was purpose rather than category. “The clear direction is to be within a Procurement function that contributes to the creation of something that people need, like or make a difference to them, which gives me a sense of pride on contributing to it.”

That observation reframes the entire decision framework. Most people arrive in procurement sideways, not by design. The decisions in the post are less a roadmap chosen in advance and more a set of forks encountered along a path that was never fully planned. The author agreed, noting his own career was never a straight line and that many of his best opportunities were never part of the original plan.

Takeaways for Procurement Professionals

Three lessons run through the discussion. First, decide what impact you want to be known for. Category, geography, and company size matter, but the reputation that follows you across every move is what people believe you deliver. Build it deliberately.

Second, choose between managing suppliers and managing change early, with eyes open. The supplier craft is rewarded early. The change capability is what translates into broad leadership. The two paths diverge more than they appear.

Third, seek varied perspectives before you specialize into leadership. Project side and corporate side, structured training and hands-on stretch, large and small companies each teach commercial judgment the others cannot. The leaders with the strongest judgment usually sampled several.

What big career decision shaped your procurement path most, and would you make the same choice again?

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

A category strategy is not strategic because it has a slide deck. It becomes strategic when it changes how decisions are made. That distinction sounds obvious until you look at how most procurement strategies actually perform under load. Clean segmentation, a supplier matrix, a clear roadmap, nice governance, good language. The artifacts look complete. Underneath, the basics are often still missing. Nobody can answer with confidence who is really buying, why they are buying it, what should actually be standardized, which exceptions are legitimate, and which trade-off the business is trying to make. Without those answers, a category strategy does not guide decisions. It decorates confusion.

The debate gained traction online when a global indirect procurement leader proposed a single test. When pressure rises, does the strategy make choices easier, clearer, and harder to distort? If not, it is still just procurement thinking, not procurement influence. Good category work is not only market-facing. It is decision-facing. The post drew procurement directors, supply chain leaders, business analysts, consultants, and even a supplier voice. The agreement on the diagnosis was strong. What deepened it were the specific tests each contributor offered for spotting a strategy that is still too abstract to be useful.

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The complaint is familiar in every executive suite. “We can’t find enough capable procurement people.” It sounds like a labor market problem. It is not. The talent exists in volume. What companies are actually struggling with is a structural mismatch between job descriptions written for a world that no longer exists and a business reality that now demands far more. Procurement roles have expanded faster than the operating models, tooling, and competency frameworks meant to support them. The result is a function set up to fail, then blamed for failing to hire its way out.

The debate gained traction recently online when a procurement trainer argued that the shortage is a misdiagnosis. Today’s teams are expected to deliver the core flawlessly, supplier negotiations, supply continuity, cost savings, quality, while also becoming experts in ESG, AI, geopolitics, and complex risk. Yet many remain overloaded operationally, barely trained in the basics, and working with fragmented systems. The post drew procurement directors, CPOs, transformation advisors, and recruiters. The agreement that this is a design problem rather than a supply problem was near unanimous. The disagreement was about what to fix first.

Identity Crisis, Not Talent Shortage

The most cited reframing came from Marcel Van Wonderen, a procurement and supply chain transformation advisor. “There isn’t a procurement talent shortage. There is a procurement identity crisis. Too many functions still optimise categories, savings reports and internal processes while the business is moving toward growth enablement, resilience, speed, ecosystem orchestration and AI-driven decisions. The real question is, is procurement willing to let go of its past?”

That question reframes the entire debate. The problem is not finding people who can run sourcing events. It is whether the function will redefine itself around what the business now needs.

Mario González, a procurement director at Tier-1 automotive, sharpened the language. “We aren’t facing a talent shortage, but a relevance gap. Expecting a single professional to master everything from geopolitics to AI while buried in operational noise is a structural failure. Procurement isn’t a job anymore. It’s a high-stakes commercial orchestrator.”

Sajith Raghavan, a VP of Procurement with experience at ICL, Reliance, and DuPont, named the precise mismatch. “The talent shortage is actually a gap between yesterday’s job descriptions and today’s business reality. Companies aren’t struggling to find buyers. They’re struggling to hire the hybrid commercial architects needed to navigate a volatile world with outdated tools and narrow criteria.”

The Structural Mismatch

The deepest diagnostic came from Asif Manzoor, a supply chain and operations leader. “The issue is structural mismatch. Procurement roles have expanded faster than their operating models, tooling, and competency frameworks. Without redesigning jobs, systems, and expectations in parallel, organizations keep labeling a design problem as a hiring problem, while complexity continues to accumulate internally.”

That phrase, “labeling a design problem as a hiring problem,” is the entire argument in seven words. The hiring process filters out capable people because the criteria were written for the old role. Manzoor extended the point. “Capability exists, but linear hiring models and legacy competency frameworks filter it out. Until organisations redesign jobs, decision rights, and evaluation criteria for AI-native and non-linear expertise, they will keep optimizing recruitment for the past while struggling to execute in the present.”

Raghavan offered the operating model alternative. “Organizations must pivot toward building multi-disciplinary teams supported by robust digital architecture, rather than searching for the mythical procurement professional who can do it all.”

That distinction matters. The unicorn who masters negotiation, ESG, AI, and geopolitics simultaneously does not exist at scale. The solution is team design, not an impossible individual hire.

Hire From Outside the Function

A second thread argued the talent fix requires breaking the procurement-only hiring habit. Mathew Schulz, founder of Pennywurth, held firm to a contrarian thesis. “Next-gen procurement talent will come from outside the function.”

Felipe Solano, a procurement manager in fragrance manufacturing, exposed the flaw in hiring the finished article. “Companies want to hire the guru that ticks all the role boxes of today’s description. The finished article of today is obsolete tomorrow. Who wants to be hired to do what you have already done? Hire someone who has some strong skills and can grow on the role. The job role published today is too old tomorrow, and hungry professionals are the ones who will adapt, evolve and deliver. Not the perfect full box ticking one.”

That observation cuts at the recruitment logic directly. Hiring for a perfect match to today’s spec guarantees obsolescence tomorrow. Hiring for adaptability and growth potential is the only durable strategy in a role that keeps changing.

The Salary and Career Problem

James Meads, a procuretech advisor, named the elephant in the room. “It’s risk aversion and lack of vision from the hiring companies most of the time. Also, UK procurement salaries are part of the problem. Consulting pays better. Working for a startup is more fun and gives you real responsibility and a fast track to leadership roles. So inevitably, people leave because the stress isn’t worth it for the salary and very limited career progression.”

That observation reframes the shortage as a retention and attraction failure. If procurement cannot compete with consulting on pay or with startups on responsibility and progression, the talent does not vanish. It goes elsewhere. The function loses people it trained because the value proposition no longer holds.

Luke Tomlinson, a procurement leader, added the pipeline dimension. “Build a framework where young and new talent can genuinely thrive. This is anything from entry level training, to progression routes, and core competencies.” The shortage narrative obscures a self-inflicted wound. Functions that fail to train and progress junior talent manufacture their own future scarcity.

The Investment Catch-22

The most uncomfortable structural truth came from Jehanzeb Alam, a procurement and supply chain leader. “The solutions all assume leadership is convinced already. In reality, procurement generally has to fight the internal case for its own investment while in parallel being held accountable for underperforming without those investments.”

That catch-22 is the trap most procurement leaders live in. They are denied the tools, headcount, and training needed to perform, then judged for underperforming. The investment that would close the gap requires a business case that the function lacks the resources to make compelling.

Maria C., a global procurement leader, located the root cause in the C-suite. “C-Suite executives do not take the time to understand procurement. Many see it as simply a cost reduction and procure-to-pay role without considering the intricate legal, commercial and operational details. A good CEO or President understands this.”

Rewrite Your Own Job Description

The most empowering response came from Michael Shields, VP of Procurement at Tropic. “We need to re-write our own job description to some degree. If we start operating differently and show the business the results, the job and expectations can evolve too.”

His adventure metaphor captured the strategic choice. “You can either be taken with the current, which is risky, or you can try to fight the current, which is exhausting and maybe impossible, or you can use the current for momentum but still steer.”

That framing matters. The function is not powerless against the mismatch. Procurement leaders who demonstrate strategic value reshape the expectations and the role itself, rather than waiting for leadership to redesign it for them.

Clarice Camacho, a global energy procurement and risk leader, drew the final distinction. “The gap is no longer operational capability. It is strategic leadership capability. We trained procurement teams to buy better. We now need leaders who can lead differently.”

Takeaways for Procurement Leaders

Three lessons run through the discussion. First, the shortage is a design problem wearing a hiring problem’s clothes. Capable people get filtered out by competency frameworks and job descriptions written for the old role. Redesign the criteria before blaming the market.

Second, the solution is team architecture, not the unicorn hire. No single professional masters negotiation, ESG, AI, and geopolitics at once. Build multi-disciplinary teams on strong digital infrastructure instead.

Third, procurement must make its own case. The investment catch-22 is real, but waiting for the C-suite to understand the function is a losing strategy. Demonstrate strategic value, rewrite the role through results, and steer the current rather than fighting it.

Is your organization hiring for the procurement role of five years ago, or the one the business actually needs now?

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

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.”

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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?

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