Throughout my career in procurement across manufacturing, utilities, infrastructure, technology, and government sectors, I’ve witnessed numerous transformation attempts – some wildly successful, others that never reached their potential. Let’s explore why these well-intentioned efforts often fall short and how to avoid these common pitfalls.
The Hard Truth About Procurement Transformation
Research relating to organisational change suggests that about one third of change programs are successful while about half are considered a complete failure. Insights and anecdotal evidence suggest that these figures are probably about right for procurement transformations also. Why? Because genuine transformation requires more than new systems or restructuring – it demands a fundamental shift in how the procurement capability is positioned within the organisation.
What’s crucial here is matching capability growth to your organisation’s specific needs rather than blindly pursuing “best practices” that may not fit your context. I’ve seen too many transformations fail because they attempted to implement textbook models that were misaligned with their business realities. The most successful transformations scale procurement capability to the actual requirements of the organisation, rather than forcing a square peg into a round hole.
6 Key Reasons Procurement Transformations Fail
1. Missing Executive Support
Without genuine C-suite championship, transformation initiatives inevitably stall. I’ve seen beautifully designed programs wither because they lacked authentic executive backing.
Executive support is critical for maintaining momentum throughout the transformation journey, particularly when challenges arise or resistance emerges. When procurement teams encounter barriers – whether they’re resource constraints, conflicting priorities, or territorial disputes – having a senior champion provides a vital escalation path to resolve issues that might otherwise derail progress.
United executive buy-in sends a powerful message throughout the organisation that leadership is genuinely invested in the change. This visible commitment demonstrates that the transformation isn’t just a procurement department initiative but a strategic organisational priority expected to deliver meaningful value. When executives actively communicate the importance of the transformation and model supportive behaviours, it significantly increases adoption rates across departments.
Real-world example: At a utility company I worked with, our transformation gained momentum only after we secured the CFO’s active participation – not just verbal approval. The difference was having an executive who would remove barriers and challenge other leaders when our team’s role was minimised.
2. Treating It as a Technology Project
Digital tools are crucial enablers, but transformation isn’t primarily about technology. Organisations frequently invest in sophisticated systems without addressing the underlying operating model.
The temptation to view procurement transformation through a technological lens is understandable. New systems promise streamlined processes, enhanced visibility, and improved control. However, I’ve observed numerous organisations implement expensive procurement platforms only to find adoption rates disappointingly low and promised benefits unrealised.
Successful transformations recognise that technology implementation is just one component of a broader change strategy. Without addressing fundamental aspects like role clarity, decision rights, performance metrics, and incentive structures, even the most advanced systems will fail to deliver intended outcomes. Technology should support redesigned processes and operating models – not drive them.
What’s more, focusing exclusively on technology often overlooks critical human elements. The best digital tools can’t compensate for capability gaps, misaligned stakeholder expectations, or insufficient change management. When procurement teams neglect these softer aspects, they risk creating technically elegant solutions that nobody wants to use.
Reality check: No enterprise system can fix misaligned processes or poor supplier relationships. Technology amplifies good practices but can’t replace them.
3. Focusing Solely on Cost Reduction
While cost matters, transformations that only target savings create a one-dimensional function that struggles to demonstrate broader value.
Procurement has long been stereotyped as the “cost police” – the department that slows things down, restricts choice, and prioritises price above all else. This narrow characterisation undermines our profession and limits our impact. When transformation efforts reinforce this stereotype by emphasising savings above all else, they miss the opportunity to reposition procurement as a true value creator.
What’s essential is identifying and communicating the diverse ways procurement can deliver value beyond cost reduction – ways that resonate directly with the stakeholders who should be using our services. For operations leaders, this might be supply assurance and quality improvement. For product teams, it could be innovation partnerships and faster time-to-market. For finance, it might be working capital optimisation and predictable expenditure. For sustainability officers, it’s responsible sourcing and carbon footprint reduction.
During my career, I led a sourcing initiative that delivered significant savings for one part of a business. However, these savings were so substantial that they unexpectedly reduced revenue in another division because of how their sell price was calculated. Despite achieving a net financial benefit overall, the friction created with other business units made future collaboration more challenging. This experience taught me that it is important to understand key drivers beyond cost, as isolated wins can sometimes damage cross-functional relationships when we don’t consider the broader organisational impact.
4. Insufficient Stakeholder Engagement
Procurement transformations require behavioural changes across the organisation. When we fail to involve stakeholders meaningfully, resistance becomes inevitable. Effective stakeholder engagement goes far beyond sending update emails or hosting occasional town halls. It requires a comprehensive understanding of who will be affected by the transformation and how their daily work will change. Each stakeholder brings unique concerns to the table – finance worries about compliance, operations about delivery times, and product teams about quality standards.
I’ve found that the most successful transformations start with extensive stakeholder mapping, taking time to understand each group’s objectives and pain points. This means having genuine conversations rather than making assumptions. Often, what procurement sees as a problem might not even register as an issue for our stakeholders, while what keeps them up at night might be something we’ve overlooked entirely.
Communication needs vary dramatically too – some leaders want detailed analytics while others just need to know how changes affect their teams. Creating ongoing dialogue through multiple channels helps ensure everyone feels heard throughout the process. When stakeholders feel ownership in the design phase, they become advocates rather than obstacles during implementation.
Tip from experience: Map your stakeholders before designing your transformation. Understand their challenges, priorities, and perspectives. Ensure your transformation addresses their needs, not just your team’s.
5. Capability Gaps
Many organisations underestimate the new skills required for growth in procurement capability. Data analysis, stakeholder influence, commercial innovation, and digital fluency demand capabilities that traditional purchasing teams may not possess. This gap becomes painfully obvious when we try to shift from tactical buying to more sophisticated procurement approaches without the necessary skill development.
Addressing capability needs requires honesty about where your team stands today versus where it needs to be tomorrow. I’ve witnessed transformations stall because teams couldn’t execute the new vision – not from lack of willingness, but from lack of proper development support. The most effective approach combines targeted development with strategic hiring, creating personalised learning journeys rather than generic training programs.
Knowledge sharing becomes critical too, as expertise often exists in pockets within the organisation. Career progression opportunities must evolve to reward strategic thinking alongside tactical execution, sending a clear signal about what behaviours are valued in the transformed function. Without addressing these capability gaps proactively, teams will inevitably revert to familiar tactical approaches even when given new strategic mandates.
6. Failing to Preserve What Already Works
A critical mistake I’ve witnessed firsthand is the failure to identify and maintain elements that are already working well before transformation begins.
I was part of an organisation that underwent a procurement transformation that resulted in lower stakeholder satisfaction and mass resignations from procurement staff. One of the biggest issues was not preserving what worked well pre-transformation. By ignoring the existing strengths, it created significant pain for stakeholders who suddenly lost valuable services and relationships they had come to rely on.
The transformation also reduced morale, particularly for high performers, because they were no longer working in a way that made positive differences. These team members had developed effective approaches that were abruptly replaced with standardised processes that didn’t always suit the organisation’s unique needs.
Lesson learned: Before embarking on transformation, conduct a thorough assessment of current strengths. Design your new approach to enhance these strengths rather than replacing everything wholesale.
Building a Transformation That Sticks
Based on my experience implementing strategies across sectors, here’s what actually works:
- Start with clear business outcomes – not purchasing metrics. How will this transformation help the wider organisation achieve its strategic objectives?
- Build a robust change management approach. Communication plans, training strategies, and role modelling from leaders are non-negotiable.
- Demonstrate value early. Select high-impact pilots that showcase your team’s strategic potential while building credibility.
- Sequence your initiatives thoughtfully. Not everything can or should change at once. Create a roadmap that builds momentum through visible wins.
- Measure what matters. Beyond savings, track metrics that demonstrate business impact: innovation contribution, risk reduction, improved time-to-market.
Avoiding the Implementation Valley
The most dangerous period for any transformation is the middle phase – what I call the “implementation valley.” Initial enthusiasm has waned, but breakthrough results haven’t yet materialised.
Surviving this phase requires persistence, regular communication of progress, and celebration of small wins. I’ve found that creating a visible transformation dashboard helps maintain momentum when progress feels slow.
Final Thoughts
Procurement transformation isn’t just about changing how we buy; it’s about fundamentally shifting how the organisation creates value through its external relationships. When we approach transformation with this perspective, the conversation shifts from “reducing costs” to “creating competitive advantage.”
What transformation challenges have you encountered in your organisation? I’d love to hear your experiences and insights in the comments.