The procurement functions of leading companies are experiencing an unprecedented impact on profitability and business processes. According to the A.T. Kearney report, Realizing the Power of Procurement, 90% of CFOs state that procurement professionals are increasingly participating in executive meetings, and one-third report a strong understanding of procurement effectiveness.

The report emphasizes that procurement executives still need to demonstrate to stakeholders that they understand internal business needs and communicate that modern procurement is about more than cost savings.

Survey results highlight the differences in procurement team performance between leading organizations and non-leading organizations across several critical areas, including working capital improvement, spend visibility, supplier management, analytics, and even talent management.

The data comes from A.T. Kearney’s Annual Assessment of Excellence in Procurement, which evaluates leadership performance and its impact on business outcomes. The assessment surveyed over 150 procurement executives: 39% from the Americas, 53% from Europe and the Middle East, and 8% from Asia-Pacific. About one-third of respondents represent the services industry, 28% come from consumer and retail sectors, with manufacturing evenly split between continuous and discrete production.

Procurement Must Play a Greater Role

In leading organizations, 90% of procurement projects have a high impact on working capital improvement, and 70% significantly influence operational efficiency, compared with only 32% and 26% in other organizations. Importantly, all procurement functions are following best practices in critical areas to build procurement excellence—across team structure, procurement categories, and supplier management. The report notes that these leading organizations achieve 2–3 times higher ROI from procurement than mid-sized companies and over 10 times higher than small organizations representing 25% of respondents.

Global procurement departments now have a broader role than traditional purchasing. They apply best practices in core operations and integrate analytics and strategic planning to shift focus from mere market competition activities among suppliers to value creation and strategic impact.

Spend Visibility

A.T. Kearney found that only 9% of non-leading companies have developed long-term spend strategies, compared to 80% of leading procurement organizations. Leading companies can see up to 80% of both direct and indirect spend, whereas non-leaders see only 50%. The report also highlights the importance of moving beyond Excel-based analysis to advanced analytics software to better understand cost drivers.

Supplier Management Capabilities

The report underscores that procurement professionals in leading organizations effectively manage suppliers to optimize cost savings and mitigate risks across industries.

The key to unlocking this value is strategic, long-term collaboration with suppliers that supports risk management and drives innovation through structured supplier relationship management (SRM). Among procurement leaders, over 70% separate key and strategic supplier programs and maintain formal processes to support innovation initiatives. In contrast, non-leading organizations apply these practices in fewer than 5% of supplier relationships.

Strategic Business Partnerships, Advanced Analytics, and Talent Strategies

Leading procurement teams establish themselves as strategic business partners, working closely with CFOs and business units to drive value and identify emerging trends beyond standard cost reduction initiatives.

The report notes that 25% of procurement projects in non-leading organizations do not view themselves as strategic business partners, and only 17% spend at least two-thirds of their time on strategic activities, compared with over 80% of procurement leaders.

Advanced analytics—recognized for its potential to drive substantial enterprise-wide efficiency—is a top investment priority for leading procurement teams. Only 40% of procurement teams in non-leading organizations use analytics beyond basic spend analysis.

In highly competitive markets, top talent is critical. About 80% of procurement leaders have proactive talent strategies, both internally and externally, compared with just 40% of other high-performing companies. Only 5% of procurement teams in non-leading organizations have established sustainable talent development programs, versus over 80% of procurement leaders.