Why Some Procurement Transformations Fail

Throughout my career in procurement across manufacturing, utilities, infrastructure, technology, and government sectors, I’ve witnessed numerous transformation attempts – some wildly successful, others that never reached their potential. Let’s explore why these well-intentioned efforts often fall short and how to avoid these common pitfalls.

The Hard Truth About Procurement Transformation

Research relating to organisational change suggests that about one third of change programs are successful while about half are considered a complete failure. Insights and anecdotal evidence suggest that these figures are probably about right for procurement transformations also.

Why? Because genuine transformation requires more than new systems or restructuring – it demands a fundamental shift in how the procurement capability is positioned within the organisation.

What’s crucial here is matching capability growth to your organisation’s specific needs rather than blindly pursuing “best practices” that may not fit your context. I’ve seen too many transformations fail because they attempted to implement textbook models that were misaligned with their business realities. The most successful transformations scale procurement capability to the actual requirements of the organisation, rather than forcing a square peg into a round hole.

6 Key Reasons Procurement Transformations Fail

1. Missing Executive Support

Without genuine C-suite championship, transformation initiatives inevitably stall. I’ve seen beautifully designed programs wither because they lacked authentic executive backing.

Executive support is critical for maintaining momentum throughout the transformation journey, particularly when challenges arise or resistance emerges. When procurement teams encounter barriers – whether they’re resource constraints, conflicting priorities, or territorial disputes – having a senior champion provides a vital escalation path to resolve issues that might otherwise derail progress.

Real-world example: At a utility company I worked with, our transformation gained momentum only after we secured the CFO’s active participation – not just verbal approval. The difference was having an executive who would remove barriers and challenge other leaders when our team’s role was minimised.

2. Treating It as a Technology Project

Digital tools are crucial enablers, but transformation isn’t primarily about technology. Organisations frequently invest in sophisticated systems without addressing the underlying operating model.

The temptation to view procurement transformation through a technological lens is understandable. New systems promise streamlined processes, enhanced visibility, and improved control. However, I’ve observed numerous organisations implement expensive procurement platforms only to find adoption rates disappointingly low and promised benefits unrealised.

Reality check: No enterprise system can fix misaligned processes or poor supplier relationships. Technology amplifies good practices but can’t replace them.

3. Focusing Solely on Cost Reduction

While cost matters, transformations that only target savings create a one-dimensional function that struggles to demonstrate broader value.

Procurement has long been stereotyped as the “cost police” – the department that slows things down, restricts choice, and prioritises price above all else. When transformation efforts reinforce this stereotype by emphasising savings above all else, they miss the opportunity to reposition procurement as a true value creator.

During my career, I led a sourcing initiative that delivered significant savings for one part of a business. However, these savings were so substantial that they unexpectedly reduced revenue in another division because of how their sell price was calculated. This experience taught me that it is important to understand key drivers beyond cost.

4. Insufficient Stakeholder Engagement

Procurement transformations require behavioural changes across the organisation. When we fail to involve stakeholders meaningfully, resistance becomes inevitable.

I’ve found that the most successful transformations start with extensive stakeholder mapping, taking time to understand each group’s objectives and pain points. This means having genuine conversations rather than making assumptions. Often, what procurement sees as a problem might not even register as an issue for our stakeholders, while what keeps them up at night might be something we’ve overlooked entirely.

Tip from experience: Map your stakeholders before designing your transformation. Understand their challenges, priorities, and perspectives. Ensure your transformation addresses their needs, not just your team’s.

5. Capability Gaps

Many organisations underestimate the new skills required for growth in procurement capability. Data analysis, stakeholder influence, commercial innovation, and digital fluency demand capabilities that traditional purchasing teams may not possess.

Addressing capability needs requires honesty about where your team stands today versus where it needs to be tomorrow. I’ve witnessed transformations stall because teams couldn’t execute the new vision – not from lack of willingness, but from lack of proper development support.

6. Failing to Preserve What Already Works

A critical mistake I’ve witnessed firsthand is the failure to identify and maintain elements that are already working well before transformation begins.

I was part of an organisation that underwent a procurement transformation that resulted in lower stakeholder satisfaction and mass resignations from procurement staff. One of the biggest issues was not preserving what worked well pre-transformation. By ignoring the existing strengths, it created significant pain for stakeholders who suddenly lost valuable services and relationships they had come to rely on.

Lesson learned: Before embarking on transformation, conduct a thorough assessment of current strengths. Design your new approach to enhance these strengths rather than replacing everything wholesale.

Building a Transformation That Sticks

Based on my experience implementing strategies across sectors, here’s what actually works:

1. Start with clear business outcomes – not purchasing metrics. How will this transformation help the wider organisation achieve its strategic objectives?
2. Build a robust change management approach. Communication plans, training strategies, and role modelling from leaders are non-negotiable.
3. Demonstrate value early. Select high-impact pilots that showcase your team’s strategic potential while building credibility.
4. Sequence your initiatives thoughtfully. Not everything can or should change at once. Create a roadmap that builds momentum through visible wins.
5. Measure what matters. Beyond savings, track metrics that demonstrate business impact: innovation contribution, risk reduction, improved time-to-market.

Avoiding the Implementation Valley

The most dangerous period for any transformation is the middle phase – what I call the “implementation valley.” Initial enthusiasm has waned, but breakthrough results haven’t yet materialised.

Surviving this phase requires persistence, regular communication of progress, and celebration of small wins. I’ve found that creating a visible transformation dashboard helps maintain momentum when progress feels slow.

Final Thoughts

Procurement transformation isn’t just about changing how we buy; it’s about fundamentally shifting how the organisation creates value through its external relationships. When we approach transformation with this perspective, the conversation shifts from “reducing costs” to “creating competitive advantage.”