Today, managing business risk is essential in the procurement industry. While for many years focus lied on cost control, contract management and early involvement in projects, the landscape has shifted significantly. Geopolitical tensions, disruptions in international supply chains, price volatility, and stricter regulations mean that organizations are facing more uncertainty than before.
At the same time, we see that procurement roles in many organizations have not evolved at the same pace as these developments. The result is a growing gap between the risks organizations face and the way procurement teams attempt to manage them. We call this the risk gap in procurement.
Procurement is responsible for a large part of risk management
In recent years, the role of procurement has clearly shifted towards risk management.
Consider, for example:
- Geopolitical tensions and trade restrictions
- Dependence on specific countries or suppliers
- Scarcity of raw materials and critical components
- Cyber risks within supply chains
- Stricter regulations around sustainability and compliance
These developments make supply chains more complex and less predictable. As a result, many organizations are realizing that their dependence on suppliers is greater than previously assumed.
For procurement, this means that risk management is increasingly becoming an integral part of sourcing decisions.
Limited visibility across the supply chain
One of the biggest challenges in modern procurement is supply chain visibility.
Many organizations have a clear view of their direct suppliers. However, once you look further into the chain – for example at Tier 2 or Tier 3 suppliers – that visibility often becomes much more limited.
It is precisely here risks can arise which may ultimately have a major impact on production, costs, or project planning. For organizations in sectors such as industry, offshore, and construction, a disruption at a supplier (even deep within the supply chain) can quickly lead to delays, delivery issues, and/or higher costs.
Why the risk gap emerges
The growing risk gap is often linked to the way procurement organizations have historically been structured.
In many cases, procurement consists of relatively small teams mainly focused on:
- Supplier selection
- Contract management
- Project support
- Day-to-day purchasing activities
However, strategic topics such as supplier risk management, category strategy, and supply chain resilience require time, expertise, and ongoing structural attention.
When procurement teams lack sufficient capacity or knowledge in these areas, a gap emerges between market risks and the extent to which organizations are able to control them.
What strong procurement organizations do differently
Organizations that actively reduce this risk gap take a strategic view of their procurement function.
We increasingly see companies investing in:
- Supplier diversification — By reducing dependence on a single supplier or region, greater flexibility is created within the supply chain.
- Category strategies — Risks, market dynamics, and supply security are structurally embedded into sourcing decisions.
- Strategic supplier management — Closer collaboration with key suppliers helps identify risks earlier and develop solutions jointly.
- Early procurement involvement — By involving procurement early in NPD/R&D projects, organizations not only drive innovation but also build a strong, future-proof supply chain.
These developments show that procurement is playing an increasingly strategic role within organizations.
The role of experienced procurement professionals
A factor that is often underestimated in this development is the importance of experienced procurement professionals.
Strategic procurement requires specific knowledge and experience, for example in the areas of:
- Developing procurement or category strategies
- International supply market expertise
- Contract strategy
- Insight into supplier risks
- Category management
- Project procurement in technical environments
At the same time, we see that experienced procurement professionals and leaders are scarce, particularly in sectors such as industry, construction, and offshore.
For organizations, it can therefore be challenging to strengthen their procurement teams with the right knowledge and experience needed to deal with the growing complexity of supply chains.
Procurement as a strategic function
We want to emphasize once again that the role of procurement will only become more strategic in the coming years. Supply chains will remain complex, and geopolitical developments will continue to impact international trade and supplier networks.
For organizations, this means that procurement is becoming a key factor in the development of risk management and overall business strategy.
Reducing the risk gap often starts with one simple question:
“Does our procurement organization have the capacity and expertise to manage today’s risks?”
Insight into the procurement labor market
At xentys, we specialize in recruiting professionals and management talent for procurement and supply chain roles within technical sectors such as industry, construction, and offshore.
By speaking with organizations and professionals every day, we gain early insight into where the biggest challenges for procurement teams are emerging.
These insights help organizations strengthen their procurement teams – whether that involves interim expertise, specialist buyers, or strategic procurement leaders.
Because in a world where risks arise faster than ever before, the right procurement expertise can make the difference between vulnerability and resilience.
