How Strategic Procurement Transforms Fast-Growing Businesses
In the rush to scale, fast-growing companies often shine in product development and sales, but stumble in one area that could dramatically boost profitability: procurement. As Simon Whatson, procurement expert and Vice President at Efficio, explains, procurement isn’t just about keeping the shelves stocked. It’s one of the most powerful yet underutilized levers for creating business value. Especially in the eyes of private equity.
Here’s what Simon had to say about why procurement deserves a front-row seat at the strategic table, and how executives can stop leaving millions on the table.
What Private Equity Sees That Others Don’t
Private equity firms have become highly attuned to the value procurement can deliver. When acquiring mid-market companies, they often encounter procurement functions that are purely tactical, focused on maintaining operations rather than optimizing spend. That’s when they step in and elevate procurement to a strategic role. Why? Because every dollar saved through better supplier terms or smarter spend management drops straight to the bottom line and multiplies in enterprise value.
Simon estimates that this kind of transformation can add up to 30% more profit. And in a PE context, that uplift isn’t just operational. It can equate to 10x returns when it’s time to exit. Yet, many growing companies only realize this potential after being acquired, missing a massive opportunity to improve performance while still independent.
Procurement Isn’t a Cost Center, It’s a Growth Catalyst
One of Simon’s most powerful insights is that procurement is actually one of the easiest levers to pull for value creation. It doesn’t require reorganizing teams, laying people off, or entering new markets. It’s about third-party spend; an area ripe for optimization with the right leadership and support.
Unfortunately, many procurement leads are stuck in firefighting mode, working alone or in small teams without strategic support. They're often reactive, under-resourced, and excluded from executive decision-making. The result? Massive missed opportunities.
Executive Blind Spots: Why Procurement Gets Overlooked
According to Simon, this oversight often comes down to two issues:
Lack of understanding at the executive level of what procurement can truly deliver.
Inability to articulate the business case for investment in procurement capabilities.
Building that business case requires visibility into current and future spend, alignment with business goals, and the courage to present bold initiatives, often with big dollar signs attached. Simon notes that many execs focus on revenue growth while ignoring the cost side of the equation, even though procurement savings are often more immediate and impactful.
What Makes a Great Procurement Leader?
Simon highlights that the best procurement directors do more than manage suppliers. They challenge their peers. They hold their own in conversations with heads of technology, engineering, and sales. They advocate for smarter decisions, push for change, and build commercial strategies that support broader business goals.
On the flip side, when procurement leaders can’t credibly engage at the executive level, procurement remains marginalized, excluded from transformation programs and left without a clear mandate or measurable targets.
3 Questions Every Executive Should Ask Themselves
If you're in a leadership role, Simon suggests looking in the mirror and asking:
Does my procurement function have clear strategic goals?
Are they truly involved in shaping major initiatives, or just invited to meetings?
Has our supplier base evolved in the last 5–10 years, or are we stuck with the status quo?
A static supplier base, unclear role definition, or weak procurement influence are all red flags. They suggest untapped value and potential risk.
Making the Case for Change: It’s Easier Than You Think
Simon’s final message is clear: you don’t need to wait for a private equity acquisition to unlock procurement’s value. Whether you’re a procurement leader or an executive team member, the first step is understanding what’s possible.
With the right support, often through expert advisors who can map spend, identify quick wins, and build a compelling business case, companies can elevate procurement from a transactional function to a strategic growth engine. And often, the ROI is so obvious, it begs the question: “Why didn’t we do this sooner?”
Transform Procurement Before It Becomes a Missed Opportunity
Strategic procurement is about increasing agility, reducing risk, and growing enterprise value. If your business is scaling fast but hasn’t yet invested in transforming its procurement function, now is the time. Because the companies that win tomorrow are already optimizing today.