Aim Higher, Move Faster: Unlocking Procurement-Led Transformation
Why Procurement Is the Catalyst for Enterprise-Wide Change
Procurement has long been asked to do more with less. But in today’s volatile environment - marked by inflation, supply disruptions, and intense competition—it has become clear that procurement isn’t just about cost control. It’s about leading transformation across the business.
McKinsey’s 2025 report, Aim Higher and Move Faster for Successful Procurement-Led Transformation, reveals that procurement can deliver more than 20% of the financial impact in large-scale transformations. Even more striking, when procurement hits its savings target, companies are nearly twice as likely to meet their overall transformation goals.
So how do procurement leaders turn transformation into lasting impact? The research identifies three critical success factors: stretch, speed, and skill.
1. Stretch: Raising Ambitions Beyond the Obvious
Most companies underestimate how much value leaks from their savings pipeline—up to 50% between planning and execution. Great procurement leaders counter this by setting bigger, bolder targets from the start.
Case in point: A global real estate company discovered that its property managers used wildly different approaches for on-site maintenance—some outsourcing everything, others hiring staff, and a few combining models (the costliest option). By harmonizing strategies and aligning category leaders with local managers, the company captured 20% savings across sites.
In capital projects, leadership went further, challenging historical practices in materials and renovation cycles, ultimately delivering a 30% cost reduction where no savings were originally planned.
Takeaway: Aiming higher forces procurement to break through resistance, rethink assumptions, and uncover hidden opportunities.
2. Speed: Delivering Quick Wins to Build Momentum
Transformation success isn’t just about size—it’s about pace. McKinsey’s research shows that companies capturing at least 16% of savings within the first three months are far more likely to hit long-term targets.
Case in point: A global chemical manufacturer implemented an impact-tracking platform monitored by both the CEO and CFO. By combining advanced cost models with “best alternative to negotiated agreement” frameworks, they secured $30 million in savings within six weeks—20% of their two-year goal.
These quick wins did more than pad the numbers—they energized teams, validated the transformation, and created a culture of continuous improvement.
Takeaway: Fast results buy credibility and unlock support, making long-term transformation more achievable.
3. Skill: Building Capabilities That Sustain the Pace
Even bold goals and quick wins can stall without the right skills. Procurement stars invest heavily in upskilling teams across categories, analytics, negotiation, and design thinking.
Case in point: A global medical-device manufacturer realized it was overspending $100 million annually on packaging, spread across 40 suppliers and 5,000 variants. By training staff in cost modeling and supplier qualification techniques, they streamlined packaging design and supplier base, cutting costs while speeding up innovation.
Another company, a major retailer, used role-playing and procurement training modules to boost private-label margins by 10 percentage points.
Takeaway: Cross-functional training ensures procurement can scale improvements across categories—not just in core commodities.
The Multiplier Effect of Procurement-Led Change
Procurement’s impact doesn’t stop at savings. Transformations often ripple across the organization:
Better-quality materials improve production.
Reliable suppliers strengthen resilience.
Streamlined sourcing reduces “shadow spend.”
In essence, procurement acts as a halo effect, paving the way for enterprise-wide transformation and performance advantage.
Key Takeaways
Aim Higher: Build a savings pipeline at least 60% larger than your initial target to counter value leakage.
Move Faster: Capture meaningful wins in the first six months to build momentum and credibility.
Invest in Skills: Train teams across categories and processes to sustain transformation over time.
Join the Conversation
Where is your procurement team on its transformation journey—stretching goals, delivering speed, or building skills?
How have you created quick wins that built momentum for broader change?
What investments in talent or tools have had the biggest payoff in your procurement-led transformation?
Share your thoughts in the comments - we’d love to hear how your organization is aiming higher and moving faster.
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