A More Efficient Procurement Function Starts With Rethinking the Work

1 hour ago

3 min read

What to start, stop, pause, automate, enable the business to do or outsource to improve business performance.

Procurement teams are being asked to manage costs, strengthen supply resilience and support changing business priorities, often with limited resources. When capacity becomes stretched, the response is usually to recruit, add another system or ask the team to work faster.

Before making those decisions, there is a more useful question: are we doing the right work, and is it being delivered in the right way?

Improving efficiency starts with reviewing where time goes, which activities create value and what capability the business needs.

Start with business priorities

A busy procurement function can still have important opportunities sitting untouched. Routine requests and urgent issues can crowd out contract reviews, supplier improvements and sourcing initiatives with significant potential benefits.

A practical review should consider the work currently underway alongside the work that is waiting. Assess each activity against its business value, risk, urgency and resource requirements.

McKinsey’s research into procurement operating models found that two-thirds of surveyed organisations separate strategic and transactional procurement activities, allowing teams to focus on higher-value initiatives. Its findings support being deliberate about how responsibilities are organised.

Six decisions that can improve delivery

The following framework provides a starting point for reviewing procurement’s workload.

Decision	What to consider	Practical example
Start	What important work is missing?	Develop a forward procurement plan aligned with business priorities, contract expiries and supply risks.
Stop	Which activities add little value?	Remove duplicate reporting and unnecessary approval steps, while maintaining appropriate controls.
Pause	What can wait without creating unacceptable risk?	Defer a low-benefit sourcing exercise to address a critical supply issue. Set a date to review the decision.
Enable the business	Which routine decisions can business teams manage with the right support?	Provide approved suppliers, accessible contracts, clear delegations and guidance for routine purchases.
Automate or use AI	Where can technology reduce repetitive effort?	Streamline workflows and use AI to assist with spend classification, contract summaries and initial drafts, with appropriate review.
Outsource or co-deliver	Where would specialist expertise or additional capacity improve results?	Bring in category expertise, spend analytics or implementation support for priority initiatives.

These decisions work together. Simplifying a process before automating it, for example, can prevent unnecessary steps from becoming embedded in a new system.

Enabling the business also requires preparation. People need clear boundaries, usable buying channels and access to procurement support when complexity or risk increases.

Does every capability need to sit in-house?

Fully insourcing procurement should be a deliberate choice, rather than the default.

An organisation may need consistent procurement leadership and strong business relationships without needing every specialist capability permanently on its payroll.

Category expertise, analytics, complex sourcing and implementation capacity may be needed at different times and in different combinations. Expecting a small internal team to cover all of these can leave valuable work delayed or dependent on skills the team has limited opportunity to develop.

Deloitte’s 2024 Global Outsourcing Survey identifies a balanced approach to sourcing capabilities, with organisations combining internal and external models. It also highlights skilled talent and agility alongside cost reduction as reasons for outsourcing. The research covers business services broadly, rather than procurement alone.

For procurement, this suggests assessing which capabilities are best developed internally and where external support can improve delivery.

Procurement as a Service can provide ongoing access to a mix of expertise and delivery resources, aligned with an agreed work programme. It can support an existing team or provide a broader procurement capability where the organisation has limited internal resources.

The organisation still needs clear ownership of priorities, budgets and decisions. Effective external support also requires agreed responsibilities, performance measures and knowledge transfer.

Compare the cost of delivery with the value achieved

Assessing the model means looking beyond salaries or consultancy fees. Consider internal management time, systems, transition effort, delivery speed and benefits realised.

Include the cost of work left undone. Delayed negotiations, unmanaged supplier performance and missed contract renewals can affect business performance even when the procurement team appears fully occupied.

The right model should improve the organisation’s ability to deliver priority outcomes at an appropriate total cost.

Is it time to rethink your procurement model?

Does your current model give procurement the capacity and capability to deliver what your business needs?

Review what to start, stop, pause, enable, automate or outsource. Then use those decisions to shape a delivery model aligned with your business objectives, with clear accountability and measurable outcomes.

August Consulting helps organisations review their procurement operating model and build a practical combination of internal capability, technology and specialist support to improve performance.