In today’s digital-first economy, the relationship between Procurement and the Chief Technology Officer (CTO) is no longer a matter of operational convenience, it’s a strategic imperative.
Yet in many companies, Procurement and IT still operate in silos. Procurement focuses on cost control, compliance, and supplier management while the CTO focuses on enabling innovation, managing infrastructure, and deploying scalable technologies. This disconnect often leads to fragmented vendor ecosystems, duplicated efforts, and technology investments that fail to deliver long-term value.
A recent Gartner survey revealed that only 14% of procurement leaders feel confident their teams are equipped to meet future demands [1]. That statistic alone underscores the urgency of bridging this gap, not just to improve efficiency, but to unlock strategic potential.
NOTE: These figures are theoretical examples used to demonstrate potential outcomes. Actual results will vary depending on organisational context, maturity, and strategy.
Cloud Economics: Procurement and IT’s Shared Responsibility
As organisations shift their IT infrastructure to the cloud, cost management has become a top priority. The cloud’s variable cost model, where businesses pay for resources as they use them, offers financial flexibility and scalability. It transforms IT spending from capital expenditure (CapEx) to operating expense (OpEx), which can be a major competitive advantage [2] e.g. Agility & Scalability; Improved Cash Flow; Better Budget Predictability; Faster Time to Value.
However, this flexibility comes with complexity. Without a clear strategy, cloud expenses can quickly become unpredictable. CTOs must work closely with procurement leaders to optimise cloud spend through a mix of reserved and spot instances, right-sizing resources, and implementing storage tiering [3].
Real-time dashboards and cost allocation tools help track usage across departments, fostering accountability and transparency. FinOps frameworks, such as those outlined by Microsoft [4] and the FinOps Foundation [5], provide structured approaches to managing cloud costs collaboratively across finance, IT, and procurement.
AI, GenAI, and the Future of Procurement
Recent data shows GenAI has the potential to automate 50-80% of procurement tasks, shifting professionals from transactional roles to strategic contributors [7]. These technologies are not just tools, they’re catalysts for change.
To harness the full potential of digital transformation, organisations must invest not just in technology, but in the people who drive it. Procurement teams sit at the intersection of commercial strategy, supplier ecosystems, and operational delivery. Yet without the right skills, even the most advanced platforms and tools risk being underutilised.
This shift isn’t just technical, it’s cultural. Upskilled procurement teams become strategic partners to IT, capable of co-leading transformation initiatives, driving innovation, and ensuring that every pound spent aligns with organisational values and long-term goals.
A well-trained, aligned team is more agile, more innovative, and more likely to stay [8].
Practical Steps:
As technology becomes increasingly embedded in every aspect of business operations, the relationship between Procurement and the CTO must evolve from transactional coordination to strategic partnership. This shift is not just about improving purchasing efficiency, it’s about co-creating value, accelerating innovation, and building resilient supplier ecosystems.
To achieve this, Procurement and IT must take some practical steps:
1) Establish Joint Strategic Planning
Create shared roadmaps that align procurement goals with technology initiatives. This includes co-defining priorities around cloud investments, AI adoption, and supplier innovation. When both functions contribute to long-term planning, decisions become more agile, cost-effective, and future-ready.
2) Embed Procurement in Technology Governance
Procurement should have a seat at the table in IT governance forums, especially those related to vendor selection, licensing models, and ESG compliance. This ensures that commercial, ethical, and operational considerations are baked into every tech decision.
3) Invest in Shared Data and Analytics
Enable both teams to access unified dashboards that track supplier performance, cloud usage, contract milestones, and risk indicators. Shared visibility fosters trust and allows for proactive decision-making. Tools like FinOps platforms and AI-powered procurement suites can bridge this gap.
4) Champion Cross-Functional Culture
Encourage collaboration through joint KPIs, shared incentives, and regular touchpoints. When procurement and IT teams understand each other’s language and constraints, they can co-create solutions rather than negotiate compromises.
5) Prioritise ESG and Human-Centric Partnerships
Procurement and IT must jointly evaluate suppliers not just on cost and capability, but on sustainability, ethics, and long-term relationship potential. This is especially critical in AI and cloud ecosystems, where vendor behaviour can impact brand reputation and regulatory exposure.
Metrics That Matter
To measure the success of collaboration between IT and Procurement, organisations must track metrics that reflect shared accountability, efficiency, and strategic value. The following indicators focus on areas where both functions intersect and offer a clear view of how aligned, agile, and cost-effective the partnership truly is.
| Metric | What It Means | Why It Matters | Reference |
|---|---|---|---|
| Tech Spend Under Management | % of IT spend actively managed by procurement | Shows strategic control over software, cloud, and hardware purchases | MavenVista |
| Time to Procure IT Tools | Average time to source and approve new tech tools | Faster cycles improve agility and reduce shadow IT | Cflow |
| Cloud Cost Accuracy | How closely actual cloud spend matches forecasts | Prevents budget overruns and improves planning | Vertice |
| Contract Compliance Rate | % of IT purchases made under approved contracts | Reduces risk, improves vendor accountability, and ensures legal alignment | DocJuris |
| SaaS Utilisation Rate | % of purchased software licences that are actively used | Identifies waste and improves renewal decisions | Vertice |
| IT Supplier Risk Score | Risk rating based on vendor performance, security, and financial health | Helps avoid disruptions and ensures resilience in tech supply chains | Procurement Tactics |
| Procurement Satisfaction (IT) | IT team’s feedback on procurement’s responsiveness and supportVertice | Measures alignment and collaboration effectiveness | Harvard GPL |
Conclusion
The convergence of Procurement and IT is no longer optional, it’s essential. Procurement must evolve from cost controller to innovation enabler. The CTO must see procurement not as a gatekeeper, but as a strategic co-pilot. Together, they can shape ecosystems that are agile, ethical, and built for scale.
The organisations that thrive will be those that stop asking “how do we buy?” and start asking “how do we build together?”
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References
[1] Gartner (2023) Procurement leaders survey: Talent readiness for future needs. Gartner Research. Gartner Says Only 14% of Procurement Leaders Have Adequate Talent to Meet Future Needs of their Function
[2] IBM (2023) IT cost optimisation framework strategies. https://www.ibm.com/think/insights/it-cost-optimization-framework-strategies
[3] CloudEagle.ai (2023) 6 FinOps frameworks for smarter cost optimisation. https://www.cloudeagle.ai/blogs/6-finops-framework
[4] Microsoft Learn (2023) FinOps framework overview. Available at: https://learn.microsoft.com/en-us/cloud-computing/finops/framework/finops-framework
[5] FinOps Foundation (2023) 2025 FinOps framework. Available at: https://www.finops.org/insights/2025-finops-framework/
[6] McKinsey & Company (2023) Making the leap with generative AI in procurement. Available at: https://www.mckinsey.com/capabilities/operations/our-insights/operations-blog/making-the-leap-with-generative-ai-in-procurement
[7] KPMG (2023) How generative AI will transform procurement. Available at: https://kpmg.com/us/en/articles/2023/generative-ai-transform-procurement.html
[8] ProcureAbility (2023) How to reskill and upskill your procurement team. Available at: https://procureability.com/how-to-reskill-and-upskill-your-procurement-team/
[9] SoftCo (2025) A practical guide to ESG in procurement. Available at: https://softco.com/blog/a-practical-guide-to-esg-in-procurement-2025/
[10] MoldStud Research (2023) Strategies for CTOs to maintain strong vendor relationships. Available at: https://moldstud.com/articles/p-essential-strategies-for-ctos-to-forge-and-maintain-strong-vendor-relationships-for-business-success
[11] MavenVista (2025) 12 most important procurement KPIs to measure in 2025. Available at: https://mavenvista.com/procurement-kpis-to-measure-in-2025/
[12] Cflow (2025) 15 most important procurement KPIs to measure in 2025. Available at: https://www.cflowapps.com/procurement/procurement-kpis/
