A practical look at the gap between savings targets, decision rights and delivery responsibility in modern indirect procurement.
Why accountability without authority is not really accountability at all.
A practitioner’s view of the gap between procurement targets, decision rights and the investment needed to deliver change.
A few years ago, I found myself responsible for a substantial spend portfolio, a significant savings target and a long list of supplier-related risks.
On paper, it looked like a serious commercial leadership role.
In reality, many of the decisions that determined whether those savings would ever be realised sat elsewhere.
The business could decide what it wanted to buy. Technology teams could decide which platforms they preferred. Budget owners could decide whether to fund the changes needed to realise the savings. Procurement remained responsible for the target.
If Procurement is accountable for the outcome, does it actually control the decisions that determine the outcome?
The Wrong Debate
Discussions about Procurement often become polarised.
One side argues that Procurement should have much greater authority and control. The other argues that Procurement is a support function whose role is to advise rather than decide.
I think both positions miss the point.
The question is not whether Procurement should control every business decision. It should not. Business leaders should decide what outcomes they require. Technology leaders should determine whether a solution is technically appropriate. Operations leaders should own implementation and adoption. Finance should retain financial oversight.
The real issue is far simpler: does accountability match authority?
If it does not, organisations create a situation in which Procurement is accountable for results it cannot entirely influence.
What Procurement Is Actually Supposed to Do
Many people still think Procurement exists primarily to negotiate contracts and reduce costs. That description is no longer adequate.
Modern indirect procurement covers technology, professional services, facilities, marketing, HR services and many other categories that keep an organisation operating every day.
A capable function should understand demand before suppliers are selected, challenge unnecessary expenditure, identify duplication, assess supplier risk, evaluate commercial alternatives, negotiate terms, support supplier performance management, plan renewals and exits, and bring legal, financial, operational and commercial considerations together.
That is much broader than negotiating discounts. It also explains why authority matters. Procurement cannot reasonably be expected to reduce cost, improve supplier performance and manage risk if it is only invited into the conversation after the important choices have already been made.
The Microsoft Renewal Problem
Consider a familiar scenario. Procurement negotiates a major Microsoft renewal. The negotiated commercial outcome is excellent: discounts improve, terms improve and flexibility improves.
At the same time, licence numbers increase, additional products are added, old services remain in place and overlapping tools are not retired. The total spend goes up. The savings target is missed.
Who failed?
The answer is not necessarily Procurement. Nor is it necessarily the business. It may simply be that the commercial result and the operational result depend on different decisions being taken by different people.
A larger discount does not automatically produce a lower cost. Equally, a lower unit cost does not automatically generate a realised budget saving. Someone still has to implement the change, remove redundant cost and make the difficult organisational decisions.
Too often, those responsibilities are blurred.
The Difference Between Negotiation and Delivery
One of the most common misconceptions in procurement is the belief that negotiated savings automatically become realised savings. They do not.
Imagine a supplier-consolidation programme. The commercial opportunity may look attractive: fewer suppliers, lower prices, better leverage and simpler governance.
Unfortunately, the organisation may also require system changes, data migration, retraining, contract exit costs and additional project resource. Without investment, none of those things happens. Without implementation, much of the saving remains theoretical.
A spreadsheet does not deliver savings. People do.
That raises another important question: who owns implementation? If nobody owns it, the savings can remain permanently trapped in presentation slides.
Procurement’s Uncomfortable Habit
To be fair, Procurement has occasionally contributed to its own problem.
For years the profession argued, quite reasonably, that it deserved greater strategic influence. Spend under management became an important metric. The size of the portfolio became a measure of significance.
The difficulty is that “managing spend” can mean very different things. Seeing expenditure is not the same as controlling it. Negotiating a contract is not the same as choosing a supplier. Approving a commercial process is not the same as controlling demand. Owning a savings target is certainly not the same as owning every decision required to achieve it.
Some organisations have quietly drifted into a model where Procurement appears responsible for everything while actually controlling only part of the process.
That is not strategic influence. It is strategic accountability without strategic authority.
What Good Looks Like
Good governance separates responsibilities clearly.
The business owner remains accountable for requirements and operational outcomes. Procurement owns and assures the commercial process. Finance validates benefits. Legal, security and other specialists provide defined approvals. Contracts have named owners after signature.
That separation is healthy. The business decides what it needs. Procurement challenges how it is obtained. Finance verifies the financial result. Specialists manage the questions within their remit.
No single function should carry responsibility for outcomes it cannot materially influence. The lesson is not that Procurement should become all-powerful. The lesson is that responsibilities should be explicit.
Earlier Is Better Than Stronger
Many discussions about Procurement authority focus on contract approval rights. Should Procurement have a veto? Should Procurement sign contracts? Should Procurement approve exceptions?
Those questions matter, but they are not the most important ones.
By the time a contract reaches final approval, many significant decisions may already have been made. The supplier may have been chosen. The programme may have been designed. The launch date may have been announced. Changing course becomes progressively harder.
The most valuable authority often exists much earlier, when Procurement can challenge requirements, question assumptions, identify alternative suppliers, examine total cost and assess implementation consequences.
Once those choices disappear, the remaining room for commercial improvement narrows dramatically.
Accountability Needs Resources Too
Authority is only part of the story. Resources matter just as much.
Suppose Procurement identifies a compelling opportunity involving lower costs, reduced risk and improved supplier performance. The opportunity requires six months of implementation effort, but no team is allocated, no budget is approved and no project resource exists.
Should Procurement still be accountable for delivery?
I would argue no. Procurement should remain accountable for the quality of its analysis and commercial recommendation. But implementation depends upon organisational commitment.
A large target does not magically create implementation capacity.
The Most Important Board Question
Boards often ask: “Are we getting enough value from Procurement?” It is a reasonable question, but another question should come first:
Have we aligned accountability, authority and resources?
If those three things are disconnected, performance discussions become confusing very quickly. Before criticising Procurement performance, leaders should ask who controlled supplier selection, who controlled demand, who owned implementation, who approved funding and who accepted the underlying risks.
If the answers point in different directions, the issue may be organisational design rather than individual capability.
A More Honest Mandate
I am not arguing for Procurement supremacy. Procurement should not own every decision, and every contract should not require endless approvals and bureaucracy.
Good governance is not about slowing organisations down. It is about making accountability visible.
A sensible model is remarkably straightforward:
- The business owns requirements and operational outcomes.
- Procurement owns and assures the commercial process.
- Finance validates benefits and agreed baselines.
- Specialists retain their defined approvals.
- Implementation has a named owner and a credible route to funding.
- Exceptions are visible, recorded and owned by an authorised decision-maker.
When those conditions exist, performance discussions become far more productive. People know what they own, what they do not own, and where a decision must be escalated.
Final Thought
Over the years I have become increasingly sceptical of simple explanations for performance problems.
Sometimes a procurement leader genuinely underperforms. Sometimes a business leader makes poor decisions. Sometimes a supplier fails.
But I have also seen situations where talented people inherit targets that were never realistically aligned with the authority and resources available to them.
Replacing the individual may change the name on the organisation chart. It does not necessarily solve the underlying problem.
Before setting the next savings target, redesigning the function or recruiting the next procurement leader, I would suggest one simple test:
Does the person being held accountable actually control the decisions that determine success?
If the answer is unclear, that may be where the investigation should begin.
Five Questions for Boards and Executive Teams
- Who actually controlled the supplier and solution decision?
- Who controlled demand, volumes and specification?
- Who owned implementation and the removal of existing cost?
- Who had authority to fund the change?
- How were negotiated benefits converted into verified, realised outcomes?
What Do You Think?
Where should accountability sit when commercial value depends on decisions across Procurement, Finance, Technology and the business?
Have you seen a model that successfully aligns targets, decision rights and implementation responsibility?
Leave a comment below. I would be particularly interested in practical examples of what has worked — and what has not.