The 15–25% Opportunity Hiding in Your Spend
There is 15–25% of addressable spend sitting on your table right now. Not because anything went wrong. Because at your scale, no one has yet had the mandate to work it. That makes it the largest unworked lever on your P&L.
I have spent 20+ years inside procurement: BCG, Accenture, Ariba, and as an acting CPO. The pattern is the same almost everywhere I look across small and mid-sized companies.
The gap between what these companies pay suppliers and what they should pay typically runs at 15–25% of addressable spend. Not in one bad category. Across the base.
Here is why it exists, and why it is good news.
It is structural, not a failing.
In most growing companies, procurement grew up inside finance or operations, and at a smaller scale that was exactly the right call. The company grew; the spend base grew with it; the maths changed. As you scale, the price you pay suppliers becomes a full-time lever in its own right. The 15–25% gap is simply what a spend base looks like before anyone has had the mandate to work it.
It hides in plain sight.
The spend is split across hundreds of suppliers and dozens of cost lines. No single invoice looks scandalous. The leakage is structural, not dramatic. That is exactly why it survives audit after audit.
The fixes are known.
This is not exotic. Supplier consolidation. Competitive tension where there has been none for years. Specifications no one has had reason to revisit since they were written. Contracts that auto-renewed three times. Every one of these is a solved problem, the moment someone is given the mandate to solve them.
Run the arithmetic on your own company. Most growing businesses carry meaningful procurement-addressable spend, and 15–25% of that is real money. For most CFOs I talk to, capturing even the conservative end of that range is one of the largest single EBITDA moves available to them this year. Larger than most growth initiatives. Faster, too. Giving someone that mandate is the fastest EBITDA decision most CFOs will make this year.
And here is the part that makes it urgent: your suppliers can see whether the lever is being worked. They price accordingly. The day someone on your side starts watching, the pricing conversation changes.
The first step is not a sourcing project. It is visibility. You cannot capture a gap you have not measured. A proper spend analysis covering what you buy, from whom, at what concentration, and against what market turns “we probably overpay” into a ranked list of opportunities with numbers attached.
Then you decide. With data, not instinct.