Every procurement leader is under pressure to deliver savings. Negotiated deals look strong, sourcing strategies are well documented, and dashboards show progress. Yet when the numbers are reviewed at the end of the quarter, the savings aren’t showing up on the bottom line.
We heard this frustration from one retail leader:
"It doesn’t matter how much we negotiate if people still go around the system. We’re leaving money on the table."
— Director of Indirect Procurement, National Retailer
Another added:
"Tail spend is creeping up again, and invoices are coming in before a PO ever gets cut. It feels like we’re back where we started."
— Procurement VP, Global Manufacturing Firm
THE HIDDEN PROBLEM: THIS ISN’T A SAVINGS ISSUE, IT’S AN OPERATING MODEL ISSUE
The problem isn’t with the deals procurement negotiates. It’s with how the organization actually buys. Maverick spend, non compliant suppliers, and weak controls create leaks that no sourcing strategy can fully offset. In many cases, the procurement team has built the right contracts but lacks the operating model that makes compliant buying the natural way work flows.
Procurement gets unfairly blamed for missed savings when the leakage happens downstream, in purchasing and payment processes that were never designed to reinforce the negotiated strategy.
WHAT LEADING ORGANIZATIONS DO DIFFERENTLY
Organizations that stop the leaks shift their focus from negotiating savings to designing how work moves from request to payment. They build systems where the compliant path is the easy path and where evidence from the live environment shows how work is actually happening.
They begin by clarifying the rules of engagement. Purchase orders are required before invoices are paid. Catalog buying is the standard for known categories. Tail spend is monitored with transparency instead of tolerated as an unavoidable gap. These principles are then built directly into workflows so that compliance becomes a product of design, not enforcement.
In one large enterprise, more than 20 percent of spend was happening outside the contract. By redesigning requisition workflows, enforcing catalog buying, and embedding real time checks into the process, they reduced off contract spend to under 5 percent within six months.
In another example, a consumer goods company discovered that nearly 15 percent of invoices were paid without a corresponding purchase order. By implementing a “no PO, no pay” policy supported by automated validation, they cut those exceptions by more than two thirds and created a direct connection between sourcing strategy and financial outcomes.
Jamie Fiore, Senior Director of Procurement Advisory Services at RiseNow, emphasizes the shift:
"Savings are not realized in the sourcing room. They’re realized when the work of buying and paying is designed and governed in a way that makes the right actions automatic."
Brian Odle, Senior Manager at RiseNow, adds:
"When the operating model is clear, you get transparency without tension. Procurement is no longer seen as a barrier. It becomes the team that helps the business protect value and buy with confidence."
This is also where RiseAgents accelerate performance. When the operating model is clear and workflows are designed correctly, AI enabled analysts can detect leakage in real time, flag off contract activity before it becomes spend, and help teams course correct using evidence from the work itself. It creates a visible line between procurement’s intent and how the organization actually buys.
WHY THIS MATTERS
When savings continue to slip through the cracks, it erodes procurement’s credibility. Leaders begin to question whether the work procurement does translates to financial results. By treating savings leakage as an operating model challenge, organizations can finally deliver the impact they promise and build the trust that sustains long term influence.
Strong operating models do more than control costs. They position procurement as a strategic partner who protects margin, ensures compliance, and enables smarter decisions across the enterprise.
A Quick Diagnostic to See Where Value Is Lost
Leakage builds faster than most teams realize. A quick diagnostic like the Sourcing Maturity Assessment shows where it’s happening and what to fix first.
Next up in this series: what happens after go-live when consultants leave, side spreadsheets return, and teams realize they are stranded.
