If your organization still considers procurement “excellent” as long as materials arrive on time, prices look reasonable, and annual savings hover around 1–3%, you’re working with a tactical view. It keeps the business running, but it doesn’t drive progress.
Companies that treat procurement as a strategic function operate at a completely different standard. Their teams deliver 2x higher savings, generate 1.5–2x higher ROI, run at roughly 15–20% lower cost, and reduce process cost per order by more than 70%.
In today’s reality, “good” performance isn’t enough anymore. Many foundational tools, such as spend visibility dashboards, guided intake, and accounts payable software, have become the baseline before you can push toward anything resembling excellence. Procurement needs a wider lens and a clearer sense of where it stands.
Read on to explore fresh procurement benchmarks, the markers of high-impact teams, core pillars that define excellence today, and why your maturity level matters.
What is procurement excellence in 2026
As we mentioned earlier, excellence in procurement no longer follows the traditional model. A set of powerful trends reshaped the role and raised expectations across the board. Here is just a small part of them:
- Margin pressure and inflation. Procurement costs rose for the first time in a decade, pushing teams to look beyond unit price.
- ESG and regulation. Scope 3 and sustainability targets have moved from “initiatives” to enterprise-level requirements.
- Supply chain volatility. Recent disruptions made resilience, risk visibility, and supplier stability central to procurement strategy.
- Digital acceleration. Procurement teams lean on automation, integrated systems, and real-time data.
- GenAI adoption. AI can automate 50–80% of routine work, so teams can focus on analysis.
- Expanding scope. Procurement now manages cost, risk, ESG, innovation, and digital initiatives with little or no extra headcount.
At its core, procurement excellence is about managing change well, delivering financial and ESG value, and using data and AI thoughtfully rather than adding complexity.
The S2P maturity checklist
The first step in building a stronger procurement function is to realize where you stand now. Procurement maturity is measured in four levels, from fixing the basics to delivering strategic impact.
- At the Foundation, teams struggle with scattered data, inconsistent processes, and constant rework.
- As they progress into the Established level, procurement becomes more structured: sourcing steps repeat the same way, approvals follow clear rules, and supplier information is reliable.
- At the Leading stage, most of the process runs smoothly, supported by automation and reliable data.
- The highest level—Excellence—is where procurement acts as a value engine, contributing to margin, resilience, ESG goals, and customer satisfaction.
To understand where your team stands today, start with a quick S2P check. Go through each point and mark it as working or broken:
- One intake path for all requests
- Approvals that move on time
- Accurate supplier and contract records
- A documented sourcing approach
- POs created before invoices
- Invoices matched with minimal effort
- Accurate, usable spend data
Results:
0–2 working items → Foundation
3–4 working items → Established
5–6 working items → Leading
7 working items → Excellence
The pattern makes your next steps clear.
The four pillars of excellence
Organizations that consistently outperform in procurement don’t rely on luck. They simply know what works. Just like a well-built house, the function only stands if the foundation is solid. Procurement’s foundation rests on four core pillars that define sustainable procurement success.
Pillar 1–Spend analysis
A well-known procurement thought leader, Robert A. Rudzki, claimed, “You can’t manage what you can’t measure—and most companies don’t truly know what they spend.” It sounds obvious, right? Yet only a few organizations have truly reliable spend visibility.
Spend analysis sheds light on their actual spending habits, saving opportunities, and gaps in contract and supplier management. It also enhances forecasting and budgeting to help teams plan ahead.
Pillar 2–Sourcing
Strategic sourcing does far more than hunt for a better price. It allows the company to negotiate the best price and quality of the purchase and thus directly influences its profit margin and net income. A strong sourcing process also keeps risk in check by ensuring the company isn’t dependent on a single vendor.
Pillar 3–Contract management
Contract management is the guardrail of procurement. It sets the rules, monitors whether suppliers meet them, and resolves issues before they escalate. With clear terms and consistent oversight, organizations improve compliance and keep supplier relationships on steady ground.
Pillar 4–Supplier relationship management (SRM)
SRM emphasizes deeper collaboration and value creation with suppliers over time. It goes beyond onboarding and risk checks to focus on shared goals, open communication, and steady performance improvement. When managed well, SRM strengthens the supply base and helps the company avoid disruption while unlocking better quality and innovation.
Your next moves (if you want real progress this coming year)
Once you know your maturity level and the strength of your four pillars, you turn that insight into action.
Each move links back to a specific level and one of the four pillars:
- FOUNDATION. Clear up the basics: one intake path, faster approvals, clean supplier data, and POs created before invoices. These are the fundamentals that stop constant rework.
- ESTABLISHED. Give teams a clear sourcing and contracting path to follow so no one has to reinvent the process for each category.
- LEADING. Improve supplier oversight with clearer KPIs and early issue detection supported by modern tools.
- EXCELLENCE. Raise the bar on KPIs, collaboration, and early issue detection so risk and quality can be managed proactively.
Finally, it’s time to build a Procurement Center of Excellence (CoE)—a small expert team (often 2–5 people) that owns methodology, analytics, technology adoption, and capability building. They:
- maintain playbooks and standards;
- coach teams;
- run supplier and category analytics;
- evaluate tools, automate workflows; and
- ensure the entire function improves quarter after quarter.
CeO is the final step when procurement excellence stops being an ambition and becomes the way the organization operates.
Sum up
Reaching procurement excellence calls for steady improvement, the courage to rethink old habits, the discipline to put strong processes in place, and the ability to treat suppliers as true partners rather than transactional vendors.
The framework in this guide offers a clear path forward: know your maturity level, strengthen the four pillars, fix the basics, and build a CoE that supports continuous progress. With this structure, procurement moves beyond routine tasks and becomes a strategic driver of resilience and results.