A STRATEGIC PROCUREMENT FOCUS ENABLES STRONGER GROWTH AND INNOVATION
To boost margins and drive performance, companies often prioritise sales and marketing. Yet, while front-end functions focus on revenue generation, the smartest organisations are turning their attention to the back end, because there is an equally effective lever for growth and profitability that is well known to major industrial businesses: procurement. Strategic sourcing, supplier collaboration and risk management are becoming core drivers of sustainable competitive advantages.
This shift in focus is reinforced by findings from our recent study focusing on procurement and supply chain management. It demonstrates the tangible impact of strategic procurement on business outcomes. The research reveals that organisations with deeply embedded procurement capabilities significantly outperform their peers. Companies that empower procurement to act as a strategic business partner at board level, such as by establishing a chief procurement officer at the executive committee table, realise up to 2 percent more growth compared to competitors. For a company with a turnover of $1bn, this means a $20m boost. These organisations, referred to in the study as “impact leaders”, leverage procurement not just for cost savings, but for innovation, resilience, profitability and long-term value creation.
Driving growth and innovation
The most progressive organisations no longer view procurement as an operational function. Instead, they elevate it to the executive agenda, aligning sourcing with the overarching business strategy. Only 46 percent of procurement teams currently interact proactively with top leadership. But where procurement has a strategic role, outcomes are significantly higher.
Strategic procurement contributes to growth by identifying new value streams, supporting market expansion through supplier-enabled innovation, and enabling faster go-to-market cycles.
Oct-Dec 2025 Issue
Inverto