Procurement Risk - Moving Beyond Paralysis

Let’s be candid: if the goal of procurement was to eliminate all conceivable risk, we’d be in a state of commercial paralysis. No new suppliers would be onboarded, no innovative technologies adopted, and no strategic partnerships formed. Or worse, every decision would demand a repetitive, standard RFx process just to move forward, stifling agility and genuine value.

The evolution of our profession sees us moving beyond the traditional view of risk as something to be stamped out at all costs. Instead, our role is to become enablers of calculated, strategic risk-taking.

So, how do we achieve this?

Understanding the Risk Profile

First, by thoroughly understanding the risk profile. This isn’t a single data point; it’s a multi-faceted view that includes:

• The inherent risk itself – what are we truly facing?
• The residual risk – what remains after we’ve applied our controls and management strategies?
• The organisation’s appetite for that risk – the crucial, yet often overlooked, cultural and strategic element.

This leads to a vital point: an organisation’s risk appetite is rarely static. It can be highly situation-dependent. The level of risk acceptable for a minor, non-critical purchase is vastly different from that of a company-wide digital transformation project. This is why these conversations cannot happen in a silo. We must discuss risk with the people who have the authority to formally accept it.

The Question That Shifts the Dynamic

Instead of presenting risk as a simple ‘yes’ or ‘no’ proposition, a rather powerful question we can ask our stakeholders is:

“What steps do you believe we should take to make this risk acceptable?”

This question fundamentally shifts the dynamic. It moves the conversation from “if” to “how”, positioning procurement not as a gatekeeper but as a strategic partner dedicated to finding solutions and driving the business forward, safely and intelligently.