With the increasing adoption of automation and digital systems in procurement, organizations are placing greater emphasis on technology investments to improve critical processes—from analytics and sourcing to contracting, purchasing, payment, and management and control. These solutions enable organizations to optimize procurement operations while helping protect the value procurement promises to deliver.

Value-Enhancing Activities

Procurement leaders often face decisions on when and how to use systems, processes, organizational structures, governance models, and more. However, if they don’t start with a data-driven approach, they may find themselves buried in tactical automation processes that have the greatest potential business and EBITDA impact. For example, in strategic sourcing, procurement leaders risk opting for simple purchases from the lowest-cost supplier rather than the highest-value provider—ultimately affecting multiple departments across the organization, not just procurement.

How can you develop an environment with clear visibility to achieve sourcing savings and ensure value delivery? How can you ensure that cost savings are not only achieved but sustained?

Procurement can deliver up to 70% more value by applying the following three strategies:

1. Develop a Global Data Strategy

Although starting with spend analysis and leveraging spend data is a proven best practice, it is often taken for granted among procurement leaders.

Procurement cannot save on what it cannot see. Until an organization achieves clear visibility into non-salary spend, it’s difficult to claim that procurement has taken the first step toward optimization. Poor data makes it challenging to create comprehensive plans, and early delays may require other stakeholders to fill the gaps rather than enabling procurement to expand its influence where it can create the most value. A new CPO should position themselves to prioritize the areas where procurement can drive the highest impact, with spend visibility being a critical foundational element. No procurement function can claim global status—or even average efficiency—without this foundational capability.

2. Use Data to Inform Strategy

With clear enterprise-wide spend visibility, teams can leverage insights to understand factors such as:

– Key current spending and simple metrics like total addressable spend and the percentage of spend under management.
– Functional categories requiring strategic focus for future priorities.
– Opportunities for strategic sourcing and compliance management.

Spend visibility allows procurement executives to develop detailed strategies, defining the optimal path for the organization to achieve the best prices and services within each category. Before strategic sourcing activities engage suppliers, there should be clarity on how savings will be tracked and measured once sourcing occurs. This strategy should clearly define how procurement’s efforts will impact the business—typically targeting an additional 3–5% savings per category annually. The strategy should always return to foundational data, clearly defining its source and management team, so each department can measure the resulting impact.

3. Drive Data-Driven Sourcing Strategy

In many organizations—particularly those where procurement is still maturing—one of the first questions for a CPO is the organization’s annual savings target. Without it, procurement faces significant risk. However, even with a target, if there is no clear visibility into categorized spend aligned with supply infrastructure, poor data can lead to over- or under-estimation of spend. This can result in unachievable supplier commitments or lost negotiating leverage.

True strategic processes leverage fact- and logic-driven methods to generate business demand, helping buyers understand organizational needs before going to market for each category. Category-based strategies give buyers confidence in sourcing each category and enable them to engage the market holistically with better insights.

To protect procurement’s value, organizations must become more data-driven and spend wisely to align with broader business needs. While these concepts are familiar to procurement management, strategies often fail without enterprise-wide spend visibility. Procurement owners and stakeholders must start by enabling visibility, then empower departments to use data to manage their work in alignment with business objectives.