Indirect procurement covers non-resale goods and services such as IT, facilities, and professional services and remains a largely under-exploited source of value. Its share of spending varies by sector, but typically represents a 2–4% revenue opportunity that can be redirected to growth. Value leakage persists due to four challenges: lack of leadership focus, limited strategic procurement skills, low digitization, and weak cross-functional collaboration. As a result, procurement operates tactically, with fragmented spend, higher risk, manual processes, and increased costs, negatively impacting profitability and cash flow.

To unlock value, organizations must elevate indirect procurement as a strategic function aligned with enterprise goals. This requires a strong CPO mandate, advanced procurement capabilities such as spend transparency, strategic sourcing, compliance and risk management, supplier performance governance, and zero-based budgeting. End-to-end digitization using flexible, AI-enabled platforms can automate processes, improve insights, and enhance user experience. Finally, closer collaboration with internal stakeholders and external partners ensures sustained value creation, risk mitigation, and procurement-enabled business performance.