The Procurement Identity Crisis: When Your Value Dies With Your Savings Report
If you cannot prove procurement’s worth without mentioning cost savings, you are one budget cut away from irrelevance
A mentor posed a simple question eight years ago. If you had to prove procurement’s value without mentioning cost savings, what would you show?
Greg Borowiec at Procurement Leader Lab froze. Every presentation he had made, every quarterly review, every justification for his existence started and ended with one number: dollars saved.
That moment of paralysis revealed a deeper problem. Procurement had been selling itself short. The function is not just about cost. It is a risk buffer. A capability builder. A competitive advantage hiding in plain sight.
But none of that fits neatly into a savings column. And if procurement only saves money, it becomes a glorified haggling machine. Expendable. Replaceable.
The industry needs a different conversation. One that starts with business impact instead of ending with cost reduction.
The Savings Trap
The procurement profession has trapped itself in a narrow value definition. Organizations measure the function almost exclusively on cost savings. Procurement professionals respond by optimizing their work to generate savings numbers.
The result is predictable. Strategic activities that do not generate measurable savings get deprioritized. Supplier relationships become transactional. Risk management gets ignored until crises hit. Innovation opportunities disappear because they cost money upfront.
Karen Reynolds, a chemical sourcing lead, captured the frustration. “This is great explanation of how important procurement truly is. We are much more than penny pinchers. We are a cog that helps the wheels turn.”
The mechanical metaphor is telling. Procurement keeps the organization running. But when leadership only sees cost numbers, they miss everything else the function delivers.
What Actually Matters
The responses to Borowiec’s question revealed what procurement delivers beyond savings.
Sheikh Nafiz Ahmed listed spend management, risk management, business continuity, stakeholder management, innovation, and resource optimization. “Cost saving is just a small piece of the iceberg.”
Juan F.P. provided specifics. Preventing serious problems through proper risk management. Improving reputation with external stakeholders. Providing accurate spending data with full context. Driving innovation among suppliers.
Borowiec agreed. “We definitely don’t work just in time. Maybe back in the day purchasing worked like that but today’s strategic procurement needs to be involved early to maximize the value.”
The distinction between purchasing and strategic procurement is critical. Purchasing executes transactions. Strategic procurement shapes outcomes.
Samuel Lisboa Rodrigues stated it directly. “Procurement should not be cost driven, but rather business continuity driven. Thinking just about cost is too short sighted and the reason why many companies fail.”
Borowiec responded with the key insight. “Business continuity doesn’t show up on a P&L until it’s too late.”
This is the measurement problem in one sentence. The value procurement creates through risk mitigation and continuity planning only becomes visible when disaster strikes. By then, it is too late.
The Hidden Infrastructure
Debmalya Jojo Das offered a framework that redefines the function. “When we measure it only through cost, we miss its true function. Procurement is the organization’s strategic intelligence infrastructure. It senses volatility before finance quantifies it, interprets market noise into foresight, and turns supplier ecosystems into adaptive capacity.”
He noted that enterprises with mature procurement intelligence display higher continuity, faster recovery, and stronger innovation velocity. “Procurement maturity is a leading indicator of resilience, a forward-sensing control system for competitiveness. When leaders see it that way, cost savings stop being the metric. They become the by-product of an intelligent, anticipatory enterprise.”
This reframing is powerful. Procurement as strategic intelligence infrastructure rather than cost function. The role shifts from reactive cost cutting to proactive capability building.
Felipe Solano took the argument further. “Forget the narrative of value that no one outside the function understand what does it mean for an organization nor to their respective areas. Neither consider the tasks the function perform to obtain the sought-after success.”
His point is brutal but accurate. Procurement talks about value in ways business leaders do not understand. The industry needs clearer language that connects to outcomes leadership actually cares about.
His alternative framing: “Procurement is the business tool that works with and interconnects most organizational functions for its overall operational benefit. Procurement is the leading power in hand to manage the needs intake to improve the organization’s performance, and subsequently its profit, across all areas.”
He emphasized that maturity determines impact. “Depending on how mature is an organization about the procurement function, what actually do they fully know about it, will benefit from it in full capacity or restrict it to a mere supporting unit under another function which will influence and restrict its performance capabilities.”
The Relationship Premium
Multiple responses emphasized supplier relationships as a source of value that transcends cost.
Jeff Colombelli focused on loyalty. “Treat your partners well and they will go above and beyond for you. Where agencies you work with may see you as a cash flow, strategic partners you have built and grown a relationship with know they are valued and that their best interests lie in helping you succeed and grow as they will grow with you.”
Borowiec agreed. “Supplier relationships are critical and go beyond transactional prices.”
Sue Plummer emphasized the partnership model. “I am a firm believer in building a partnership with strategic suppliers. It is essential in managing cost and supply.”
Borowiec noted that COVID proved this point painfully. “The business just sees the dollars on the change over but not the hidden costs sometimes. COVID was painful for many in procurement and the ones with strong relationships were able to survive.”
Darrell J. Foster put it simply. “Champion open and honest communication between supplier and customer. Integrity speaks volumes in SRM.”
Borowiec shared his own example. “Supplier relationships gave us early access to capacity during a shortage, while competitors were scrambling.”
Sue Plummer described her approach. Maintain an 80/20 split and move volume as needed without having to scramble.
This practical wisdom gets lost when procurement optimizes only for cost. The relationships that provide flexibility during crises take years to build. But they disappear from performance reviews because they do not generate immediate savings numbers.
The Service Dimension
Several professionals highlighted internal service as a value driver.
Jaime Nieto Casas argued that procurement’s value lies in the level of service and reliability it provides to internal customers. “It’s about ensuring availability and quality, because saving hundreds of thousands means nothing if the product isn’t there when it’s needed. The most expensive product is the one you don’t have.”
Borowiec responded that internal service reliability is what builds real credibility with the business.
Kari Katragadda emphasized on-time deliveries and constant flow of goods by selecting capable and strategic supplier partners. When asked how often she sees companies get this wrong, her answer was simple. “Often.”
Renato Rosales connected procurement to business outcomes. Efficiency, workflow, service to customer needs, sales, fill rate, good customer experience. “I can relate all of the above at the end of the day behind the company’s goal with a good and well driven procurement strategy and well built partnerships.”
These dimensions of value, availability, reliability, service, are prerequisites for business operations. Yet they rarely appear in procurement scorecards.
The Risk Factor
Andrew Neuschaefer answered Borowiec’s question with two words. “Risk reduction.”
When asked what specific risks procurement mitigates, his response was telling. “Too many to count.”
This is procurement’s invisible work. Identifying suppliers with financial instability before they collapse. Catching quality issues before they reach customers. Managing geopolitical exposure before trade restrictions hit. Diversifying supply before shortages occur.
None of this generates savings. All of it protects value. But organizations struggle to measure protection until something goes wrong.
Dan McDonnell at Gemba Coach identified supplier rationalization as a value driver. “In my experience most organizations have 10 times the number of suppliers they need, which creates a whole host of negative outcomes. I would suggest a procurement or sourcing organization who can significantly reduce and rationalize a supply chain over time into a partnership model, will help lead to way better outcomes than one who just focuses on reducing price.”
Supplier rationalization does not show up as cost savings. It shows up as reduced complexity, improved compliance, better risk management, and stronger relationships. These outcomes matter, but they do not fit in savings reports.
The Strategic Gap
Fadi Salama at a pharmaceutical procurement role summarized the function’s purpose in four words. “Make business possible sustainably.”
Gloria Argyrou emphasized that procurement is a strategic function for every business. “It drives value and supports long-term sustainability.”
She noted the importance of alignment. “Real value creation happens when Procurement and FP&A work in full alignment. By integrating procurement data into financial planning and performance management, organizations make their strategic value visible before a crisis hits.”
This integration rarely happens because procurement remains isolated in cost conversations. When the function only discusses savings, finance sees it as a cost center rather than a strategic partner.
The maturity gap Felipe Solano identified determines whether procurement can break free. Organizations that understand the function’s full capability integrate it into strategic planning. Organizations that do not relegate it to tactical execution.
The Hard Truth
If procurement cannot prove its value without mentioning cost savings, it becomes expendable the moment leadership decides to cut costs.
The alternative is clear. Stop defending budgets with savings reports. Start proving value with business impact. Demonstrate how procurement secures supply when markets go haywire. Show how supplier relationships unlock innovation before competitors know it exists. Quantify the stability that lets the rest of the business move fast without breaking things.
Track different metrics. Supplier-driven product improvements. Supply chain resilience during disruptions. Speed to market on critical launches. Risk events prevented. Innovation opportunities captured. Internal service levels maintained.
When you stop leading with cost, people start seeing you as essential rather than expendable.
The profession has trapped itself in a narrow value definition. Breaking free requires courage to measure what matters rather than what is easy to measure. It requires language that connects procurement activities to business outcomes leadership cares about. It requires demonstrating impact before crises make the value obvious.
Procurement is not just a cost function. But as long as the profession defines itself through savings, that is how organizations will treat it.
Join the conversation on procurement value creation, strategic impact measurement, and breaking free from cost-only metrics at Chain.NET, where supply chain professionals debate how to demonstrate strategic worth, share frameworks for measuring business impact, and connect at events focused on elevating the profession beyond savings reports. Your value starts here.
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