Rising costs, geopolitical shocks, and persistent supply fragility have left many companies hesitant to commit to long-term plans. Nearly 40% of chief operating officers (COOs) expect tariffs alone to increase product costs by more than 10%, yet only a fraction of companies are prepared to absorb the impact, according to a recent Bain study.
Leaders are turning to procurement to help their organizations stay ahead of change, navigate disruptions, and improve performance. These companies view the chief procurement officer as a strategic partner in their effort to build value—a role that goes far beyond traditional cost control. Managing costs is still essential—especially as inflation, tariffs, and resource scarcity squeeze margins. But leaders enlist procurement to support critical investments, respond faster to market shifts, boost innovation, and digitize supply chains.
To ensure that procurement teams can take on a more strategic role, companies need three key capabilities: integrated enterprise planning; value creation beyond savings; and AI and digital tools.
Integrated enterprise planning. Companies that bring procurement into enterprise planning at an early stage are better positioned to make fast, informed decisions. They can adjust sourcing in step with demand shifts, inventory signals, and geopolitical shifts. This level of integration requires more than coordination; it’s a new approach to planning. In these organizations, procurement isn’t the last to know; it’s there at the beginning.
Integrated planning improves risk management. More companies are establishing cross-functional digital nerve centers to monitor threats in real time and coordinate responses. These teams bring together procurement, finance, and supply chain to act quickly when needed. It’s a simple structure with vital impact—namely, better visibility, faster decisions, and a unified approach across the organization.
Best-in-class companies also integrate suppliers in forecast and demand planning. Instead of keeping vendors at arm’s length, they are building deeper, more transparent partnerships. Some are sharing forecasts to improve accuracy and trust. Others are working jointly on contingency plans or involving suppliers earlier in product development. The goal isn’t just to reduce risk; it’s to create value.
Value creation beyond savings. Leading organizations understand how vital a contribution procurement can make in supporting the strategic value agenda. The list is long. Procurement teams can promote innovation, for example, by identifying the appropriate suppliers and supporting agile development with R&D. They can enhance collaboration across R&D, marketing, supply chain, and external partners. And they can be a partner on strategic growth initiatives, supporting margin expansion, complexity reduction, and digital transformation.
To succeed in these new roles, procurement teams need enhanced commercial skills beyond cost-cutting. Teams that understand the priorities of different departments and functions across the organization will make better decisions and create value beyond savings.
AI and digital tools. Successful companies are developing ambitious procurement digital roadmaps that meet multiple new challenges. If properly deployed, AI and digital tools can enhance category intelligence, increase the number of sourcing events a buyer can run each month, and identify supplier risks, among other uses. This approach generates additional savings, reduces risk, and improves supplier and contract compliance. It also increases business collaboration, accelerates innovation, optimizes working capital, and strengthens supply chain resilience.
Procurement can help change the entire business, influencing how organizations launch new products and develop new capabilities. By bridging the divides among R&D, marketing, and operations, procurement teams are helping bring better ideas to market faster. In some companies, they’re also crucial contributors to M&A decisions.
Companies with best-in-class procurement invest in new capabilities and tools, reach across departments, and reimagine the entire function. There’s no end in sight to market uncertainty and disruption. But leadership teams that give procurement a strategic role increase their competitive edge as they navigate the changes ahead.
Read the full article by Diego Barillà, Kalit Jain, and Edward Winterschladen / Bain & Company
