Sometimes I Don't Have a Formal Savings Target (Why That’s Okay)

I'll be honest with you: there have been multiple times in my career where I haven't had a formal savings target.

That might sound strange coming from a procurement guy. After all, isn't saving money literally the job?

What I’ve learned is that savings aren't always the most impactful way for procurement to deliver value.

That's NOT to say savings aren't important. They absolutely are. Capital is limited, and expectations for improved financials are more important than they've ever been. But I'm a believer that if procurement focuses on both the bottom and top line, we become infinitely more valuable to the business.

Procurement is not a one-size-fits-all approach. You’re setting yourself up for failure if savings is the only metric you’re prioritizing. There's a natural focus on savings, sure.

• But what about speed?
• What about risk?
• What about stakeholder experience?
• What about supplier experience?
• What about value beyond savings?

You maximize procurement’s ROI when you find an optimized recipe that meets the specific needs of the company. It's the best way I've seen to unlock true partnership with the business - where procurement isn't just tolerated as a necessary evil, but actively sought out as a strategic partner.

So let's talk about what else matters beyond the savings number, and how to build a procurement function that delivers value across multiple dimensions.

The Problem with Savings-Only Thinking

When savings become your sole North Star, something dangerous happens: your team solely optimizes for the metric instead of the outcome.

It's the end of the quarter, and your procurement team is at 11% savings against a 15% goal. Leadership is asking questions. You’re feeling the pressure. So what happens? Suddenly, you're negotiating harder than the situation warrants, you're pushing back on tools that teams desperately need, you're choosing the cheapest vendor instead of the best one, and you're measuring "savings" based on the first price a vendor quotes - which is often inflated specifically so you can negotiate it down and claim a win.

I've seen teams get creative with their savings calculations in ways that would make their CFO's eye twitch. Comparing this year's price to last year's list price instead of what you actually paid. Claiming "cost avoidance" on purchases that were never going to happen anyway. Counting the same dollar three different ways.

I recently talked to another procurement leader who told me his savings goal for next year is 15%. When I asked what it was based on, he said it was because they'd likely hit 13% this year.

"That's kind of dumb," I told him. "Possibly irresponsible."

Here's why: Savings goals disconnected from spend growth, inflation, or strategic initiatives are arbitrary. And arbitrary goals lead to bad spend decisions.

You introduce risk when savings are measured on price variance alone without considering Total Cost of Ownership. You suggest that savings are greater than value.

And worst of all, you create conditions for over-rotation - where questionable business choices start occurring, favoring short-term gains over long-term value.

I’ve seen this firsthand. Even made this mistake myself. It’s a painful lesson I talk more about here.

What Actually Matters (Besides Saving Money)

So what should you be measuring alongside savings? Here are the factors that actually drive long-term value and partnership with the business:

1. Speed and Agility

In 2025, velocity is a competitive advantage. If your procurement process takes 90 days to get someone the tools they need to do their job, you're bleeding opportunity cost (and not saving money).

Think about it: your sales team needs a new tool to close a $2M deal. Your procurement team takes six weeks to process the vendor approval because they're busy negotiating a 10% discount on a $20,000 annual contract.

You saved $1,500. You risked $2,000,000. That math doesn't work.

The fix: Implement tiered approval processes. A $5,000 SaaS tool shouldn't require the same scrutiny as a $300,000 enterprise contract. Create fast lanes for low-risk, high-urgency purchases. You can automate these workflows with an intuitive tool. Your stakeholders will love you for it, and the business will move faster.

Speed is about enabling the business to capture opportunities before they disappear.

2. Risk Management and Total Cost of Ownership

Here's a scenario that should keep every procurement leader up at night: You save 25% by switching to a cheaper vendor. Six months later, they have a data breach. Or they go out of business. Or they can't scale with your growth.

What did that savings cost you?

Total Cost of Ownership (TCO) is a framework that forces you to think beyond the sticker price. When you're evaluating vendors, you need to consider:

• Security and compliance posture: A data breach can cost millions in remediation and reputational damage
• Service reliability and uptime: Downtime has a dollar value, even if it's hard to calculate
• Scalability: Can this vendor grow with you, or will you need to rip and replace in 18 months?
• Integration costs: That "cheap" tool might require an extra $20,000 in custom development to work with your stack
• Support quality: What happens when something breaks at 2 AM?

Risk-weighted savings are real savings. Price variance alone? That's just a number on a dashboard that might be masking much larger costs down the road.

3. Stakeholder Experience

Your internal customers - the teams inside your company that need to buy things - have options. They can work with procurement, or they can go around you. And if you're too slow, too rigid, or too focused on saying "no," they'll choose option two.

I've learned this the hard way. I've discovered product teams using personal credit cards to buy tools because the procurement process was "too painful." That's not just a compliance nightmare, but it's a sign that your function has become an obstacle instead of an enabler.

When procurement becomes the department of "no," you lose influence. Teams stop coming to you proactively. They wait until the last minute, which puts you in a weaker negotiating position. Or worse, they don't come to you at all.

The fix: Make user experience a priority as you design your processes. Make it easy to do the right thing. Build an easy-to-find and simple-to-answer intake form. Communicate clearly about timelines and statuses. Proactively benchmark and source tools that may solve problems better. And when you have to say no, explain why and offer alternatives.

Procurement should feel like partnership, not punishment. When stakeholders trust that you're trying to help them succeed - not just save money - everything gets easier.

4. Supplier Relationships and Performance

Here's something that doesn't show up on a savings report: the value of having suppliers who actually want to work with you.

When you beat suppliers down to their absolute floor price every single negotiation, you're training them to give you the minimum viable service. You're last in line when they roll out new features. You're the account they quietly hope churns.

The best procurement outcomes I've achieved have come from relationships where both sides win. Where suppliers see us as a partner, not an adversary. Where they proactively bring us solutions because they're invested in our success.

What this looks like in practice:

• Negotiating for better terms, not just lower prices (flexible payment terms, better SLAs, value-added services, early access to new features)
• Paying on time (seriously, this matters more than you think)
• Providing constructive feedback that helps suppliers improve their products
• Being transparent about your needs, constraints, and growth trajectory
• Treating vendor relationships as long-term partnerships, not transactional exchanges

One of our key vendors recently gave us early access to a beta feature that solved a major pain point - not because we demanded it, but because we'd built trust over years of fair dealing. That's value you can't capture in a savings calculation, but it gave us a competitive advantage in the market.

When crisis hits (e.g. supply chain disruptions, sudden capacity needs, urgent requirements), the suppliers who see you as a partner will move mountains for you. The ones you've beaten down? They'll put you at the back of the line.

5. Value Creation and ROI

What if instead of celebrating a 5% discount, you celebrated an 80% improvement in efficiency?

This is the mindset shift that moves procurement from cost center to strategic partner.

Instead of asking "How can we pay less?" start asking "How can we get more value?"

Sometimes that means spending more with a supplier who delivers dramatically better results. I've seen companies double their spend on a tool and still come out ahead because the ROI was so strong. Better conversion rates. Faster time-to-market. Fewer support tickets. Higher customer satisfaction.

That's smart investing.

What if your goal was a combination of:

• Price optimization (leveraging data to quickly achieve pricing that's sustainable for both parties)
• Value creation (measuring increased ROI, time savings, productivity improvements)
• Improved supplier performance (better and stronger results from your vendor base)

I'd argue the top line would benefit as much as the bottom line. Suppliers would help their customers achieve a competitive advantage. The company spends more, but it's with a better-performing supplier that's delivering higher ROI.

That's actually great. And here's the thing: done right, the savings will still come and can be tracked. But not at the expense of ROI, quality, and supplier performance.

How to Actually Do This

Shifting from savings-only to value-driven procurement requires operational changes:

1. Redefine Your Metrics

Stop measuring procurement success purely on cost reduction. Build a balanced scorecard that includes:

• Price optimization (using market data to achieve fair, sustainable pricing)
• Cycle time (days from request to approval)
• Stakeholder satisfaction (yes, actually survey your internal customers)
• Supplier performance scores (quality, reliability, innovation)
• Value delivered (ROI improvements, efficiency gains, revenue enablement)
• Risk mitigation (security incidents avoided, compliance maintained, business continuity)

When you measure multiple dimensions of value, your team naturally optimizes for them. When you only measure savings, that's all you'll get—and you'll sacrifice everything else to get there.

2. Use Data, Not Gut Feel

Savings goals should be based on reality, not aspiration. Before committing to targets, conduct a comprehensive spend analysis that considers:

• Projected spend growth: If your company is scaling 50% year-over-year, your spend will grow too
• Category-specific inflation rates: Software costs don't inflate at the same rate as office supplies
• Market benchmarks: What are similar companies actually paying?
• Strategic initiatives: Are there investments the business needs to make to grow?
• Historical performance: What's actually achievable based on your track record?

Gather and analyze spend data to uncover cost-saving opportunities, identify trends, and manage suppliers more effectively. You'll get a clearer picture of how your dollars are being spent and where they're headed, which means you can set goals that are ambitious but grounded in reality.

This data-driven approach also helps you have better conversations with leadership. Instead of accepting arbitrary targets, you can say: "Based on our analysis, here's what's realistic and here's why. And here are the other ways we'll deliver value beyond that number."

3. Educate Your Stakeholders

Most people don't understand what procurement does or why it matters. They just know we sometimes slow things down, ask annoying questions, and push back on their vendor choices.

Change that narrative.

• Show them the vendor that looked cheap but had terrible security reviews
• Walk them through the market research that informed your recommendation
• Explain the total cost of ownership calculation that revealed the "expensive" option was actually cheaper long-term
• Share the success story of a supplier relationship that unlocked innovation

Make your stakeholders partners in the process, not victims of it. When they understand the value you're adding beyond just cost savings, they become advocates for procurement instead of trying to work around you.

4. Empower Your Team

If your procurement team is only rewarded for savings, guess what they'll optimize for?

Give them permission and incentives to consider the full picture:

• Celebrate the deal that closed in two days and unblocked a critical project
• Recognize the contract negotiation that avoided major security or compliance risk
• Reward the supplier relationship that gave you early access to a game-changing feature
• Acknowledge the stakeholder feedback that shows procurement is becoming a trusted partner

When your team knows that speed, risk management, relationships, and value creation matter just as much as savings, they'll make better spend decisions. They'll think strategically instead of tactically. They'll build partnerships instead of just negotiating transactions.

The Path Forward

Let me be clear: I'm not anti-savings. Cost optimization absolutely matters, especially in today's environment where every dollar counts.

But savings goals without context are actively harmful. They drive behavior that looks good on a spreadsheet but damages the business in ways that are harder to measure.

Procurement done right saves money while enabling speed, managing risk, building partnerships, and creating value that compounds over time.

That's the procurement function that gets a seat at the table.