Two steps to elevate procurement from tactical to strategic
We know that Procurement is no longer just just a tactical function focused on savings by purchasing goods and services at the lowest cost. A very common CPO objective for 2025 is to evolve Procurement from being tactical to becoming a strategic driver of value creation.
By transitioning from a transactional, cost-focused function to a strategic sourcing partner, procurement teams can elevate their role in achieving broader organizational goals. The key to that lies in two basic – but not so simple – elements: embracing cross-functional procurement collaboration, and reinforcing supplier innovation using SRM.
Here are the issues involved:
- How cross-functional procurement collaboration drives strategic value
The first step in transforming your tactical Procurement team into a strategic value-driving function is fostering collaboration across all business units – and really mean it. Procurement teams must break out of their silos by actively engaging with departments such as Finance, Marketing, R&D, and Operations in order to not only understand those functions better, but gain a better understanding of Procurement’s impact on them. Has your Procurement team ever attempted to spend a day sitting next to an internal stakeholder in order to get insight into their daily operations to understand the issues?
Cross-functional collaboration also empowers Procurement to address supply chain risk management more effectively. For example, Procurement can proactively collaborate with the Legal team to negotiate contracts that protect the organization against supply chain disruptions, or work closely with the R&D team to identify innovative suppliers early in the product development process.
By doing so, organizations can reduce time-to-market while ensuring the products meet cost, quality, and sustainability objectives. Similarly, working with the Finance team helps Procurement better understand cash flow constraints and align purchasing strategies with broader financial metrics.
This collaborative approach not only mitigates risks but also builds stronger internal relationships, positioning Procurement as a valued strategic business partner in achieving organizational success and demonstrating that procurement strategies align with broader goals.
- How supplier relationship management (SRM) fuels procurement innovation and competitive edge
Do not underestimate the potential of a solid SRM strategy. Suppliers are no longer just mere vendors; they are strategic partners that can help drive innovation, sustainability, and competitive advantage. However, unlocking this potential requires a robust SRM program that goes beyond managing transactions in order to foster deep, trust-based relationships.
Effective supplier relationship management enables procurement teams to identify and nurture suppliers that align with the organization’s strategic procurement priorities. Regular performance reviews, joint innovation workshops, and open communication channels create an environment where suppliers feel valued and motivated to bring innovative to the table. After all, trust is most definitely a tangible asset.
For example, a leading consumer goods company leveraged its SRM program to co-develop sustainable packaging solutions with its suppliers, reducing environmental impact while meeting consumer demand for eco-friendly products. This collaborative approach not only enhanced the company’s brand image but also generated cost savings through material cost optimization.
SRM also plays a critical role in maintaining supply chain resilience. Building strong relationships with key suppliers ensures procurement teams have access to critical materials during disruptions, such as global pandemics or geopolitical crises.
Redefining Procurement’s future
One of the definitions of “strategic” is: Carefully designed or planned to serve a particular purpose or advantage. So ask yourself, if that is the mindset, how can I as the company’s procurement proxy be more strategically supporting a need?
The transition from a tactical to a strategic procurement function is no longer optional; it is a necessity for organizations aiming to thrive in today’s complex business landscape.
That being the case, a lot of effort should be put into moving Procurement from tactical to strategic because, ultimately, this shift transforms the function from a cost center into a value-creating powerhouse. One that drives operational efficiency and competitive advantage, and positions the organization for long-term success.
By becoming cross-functional collaborators and reinforcing supplier innovation through SRM, procurement teams can unlock new levels of efficiency, resilience, and innovation.
Now is the time for procurement leaders to seize this opportunity and elevate their function to a strategic value-driving role.
Let’s make procurement the most strategic seat at the table
If your team’s still checking boxes and chasing price cuts, you’re missing the real value. Procurement today is about insight, influence, and innovation. At Corcentric, we leverage industry-leading solutions and expertise to partner with forward-thinking leaders and help turn tactical spend management into strategic impact.
Want to stop playing defense and start driving value? Get in touch with us today and let’s talk about how.