Procurement: What Separates Good Category Strategies from Mediocre Ones

Why procurement strategies fail when they chase speed - and succeed when they chase insight

The comfort of the template

In most organisations, the phrase “category strategy” triggers a familiar mental image. A one-page document. A standard template. A handful of boxes to fill in before the next sourcing event. Spend profile, supplier landscape, risk rating, savings target, procurement approach. Tick, flick, submit, archive.

Everyone involved knows the ritual. The procurement team produces the document because the governance process requires it. The business signs it off because it looks sensible enough. And nothing fundamentally changes as a result. The same suppliers are invited. The same scope is tendered. The same assumptions are carried forward. The same outcomes emerge, usually with modest price movement and a sense that “we’ve done procurement properly”.

This is not a failure of intent. Most category strategies start with good intentions. The problem is that the artefact has replaced the thinking. The document exists, but the hard questions were never seriously confronted. And without confronting those questions, a category strategy is just an administrative step, not a strategic one.

A good category strategy is not defined by how neatly it fits on a page. It is defined by whether it changes decisions. It should materially alter what you buy, how you buy it, who you buy it from, and how much value the organisation captures over time. If it does not do that, it is not a strategy. It is paperwork.

What problem is a category strategy meant to solve?

To understand what a good category strategy actually looks like, it helps to step back and ask what problem it is meant to solve in the first place.

At its core, procurement exists to convert organisational demand into outcomes at the best possible combination of cost, risk, performance, and flexibility. A category strategy is the mechanism that shapes how that conversion happens for a specific area of spend. Done well, it creates clarity where there is habit. Done poorly, it formalises existing behaviour and locks it in.

This distinction matters. When a strategy simply codifies the status quo, it gives a false sense of control. The organisation feels disciplined, but it is not necessarily being deliberate. The future ends up looking suspiciously like the past, just renegotiated.

The difference between those two outcomes lies entirely in the quality of thinking that sits behind the strategy.

Moving from “what we buy” to “what outcome we need”

The first question a meaningful category strategy must answer is deceptively simple: what are we actually buying?

In many organisations, this question is answered far too quickly. We buy cleaning services. We buy IT support. We buy professional services. We buy maintenance. We buy logistics. These labels feel precise, but they are usually superficial. They describe the contract, not the outcome.

When you push harder, you often discover that the organisation is not really buying a service at all. It is buying uptime. Or compliance. Or availability. Or responsiveness. Or peace of mind. Or speed. Or optionality. Or the ability to scale without adding headcount. Or the ability to transfer risk.

This distinction is more than semantic. Once you start framing the category around outcomes rather than labels, new possibilities emerge. If the outcome is uptime, is a traditional maintenance contract the only way to achieve it? If the outcome is access to capability, is an external provider always the right answer? If the outcome is compliance, is the current service model actually the lowest-risk approach, or simply the most familiar?

This reframing is uncomfortable because it destabilises long-held assumptions. People are attached to the idea that “this is how we buy this category”. A good category strategy deliberately challenges that idea. It treats the current model not as a default, but as one option among many.

Challenging the default buying model

Once the outcome is clear, the next question becomes unavoidable: is there a better way to achieve it?

Better does not automatically mean cheaper. It can mean more resilient, more scalable, easier to manage, or less exposed to supplier risk. In some cases, the answer is to move work in-house that has historically been outsourced. In others, the answer is the opposite. Internal teams that grew organically may no longer be the most effective way to deliver the outcome at scale.

Sometimes the right move is to consolidate multiple fragmented services under a single supplier to gain simplicity and economies of scale. In other cases, the right move is to deliberately split a monolithic contract into smaller components to introduce competition and reduce dependency.

There is no universal best practice here. Anyone offering one is selling comfort, not insight. The right answer depends on context: the organisation’s capabilities, its risk appetite, the maturity of the supply market, the volatility of demand, and the strategic importance of the outcome being delivered.

This is where category strategies most often fail. Rather than exploring these alternatives seriously, teams default to the current structure and focus on negotiating harder within it. The strategy becomes an optimisation exercise rather than a design exercise. Marginal gains are pursued, while structural opportunities are ignored.

Rethinking who the “best” supplier really is

Once alternative ways of buying the outcome are on the table, the question of suppliers becomes much more interesting. Who is actually best placed to deliver what we need?

This is not the same as asking who the incumbent is, who has the strongest brand, or who is most familiar to stakeholders. It is about fit. Fit to the outcome. Fit to the organisation’s scale and complexity. Fit to its appetite for innovation and change.

In some categories, the best supplier may not even be a traditional supplier. It might be a strategic partner. It might be a consortium. It might be an internal capability that is strengthened and reconfigured. It might be a deliberately designed mix of providers, each responsible for a clearly defined part of the outcome.

Arriving at this answer requires stepping outside the usual procurement comfort zone. It means engaging the market earlier and more openly. It means talking to suppliers not just about price, but about how they would solve the problem if they were starting from a blank sheet. It means being willing to hear answers that do not fit neatly into existing templates.

From relative prices to real value

This naturally leads to one of the most sensitive questions in any category strategy: what is the right price to pay?

Too often, price is treated as a relative concept. Lower than last time. Lower than budget. Lower than the benchmark. These comparisons are easy to make and easy to defend, but they do not tell you whether the organisation is capturing real value.

A good category strategy treats price as an absolute question. What should this outcome cost, given the way we choose to deliver it? What are the underlying cost drivers? What is the supplier’s economic reality? Where is value genuinely being created, and where is it simply being transferred?

Answering this properly is hard work. It requires building bottom-up views of cost and value, testing assumptions, and being honest about trade-offs. It often exposes uncomfortable truths, such as the fact that a low headline price may be accompanied by hidden risk, poor performance, or rigidity that destroys value elsewhere in the organisation.

This is one of the reasons many category strategies avoid going deep on value quantification. It is much easier to label options as high or low cost, high or low risk, strategic or non-strategic. But these labels obscure more than they reveal. A meaningful strategy should be able to articulate the value of different options in real financial terms, even if those numbers are imperfect. Directionally right and transparent beats precise and misleading every time.

Designing the commercial and contractual settings

Price, of course, is only one part of the equation. A category strategy that focuses solely on rates and discounts is incomplete.

Terms and conditions define how risk is allocated, how performance is measured, how change is managed, and how disputes are resolved. They determine whether a contract is rigid or flexible, adversarial or collaborative. Getting these settings right can unlock enormous value over time, particularly in categories where demand is uncertain or evolving.

A good category strategy is explicit about which commercial levers really matter and why. It does not treat contracts as legal boilerplate. It recognises that commercial structure is itself a strategic choice, and it designs it deliberately to support the desired outcomes.

The work behind the thinking

Reaching this level of clarity does not happen through desk-based analysis alone. It requires several reinforcing streams of work.

Internal analysis provides the foundation. Historical spend data, demand patterns, contract performance, and stakeholder behaviour all reveal how the category actually operates today, as opposed to how it is described in policy documents. This analysis often surfaces inefficiencies, inconsistencies, and hidden drivers of cost and risk.

External analysis adds perspective. Understanding the supply market, its structure, its economics, and its direction helps distinguish between constraints that are real and those that are self-imposed. Markets evolve, often faster than procurement assumptions do.

Market engagement connects theory to reality. Conversations with suppliers reveal how they think, where they see opportunity, and how different sourcing models would change their behaviour. When done early, this engagement shapes the strategy rather than simply validating it.

Expert input rounds out the picture. This may come from advisors, peers in other organisations, or internal experts who have navigated similar challenges elsewhere. Learning from others’ experience reduces blind spots and accelerates insight.

Why the best category strategies take time

All of this takes time. And that is not a flaw in the process. It is the point.

A good category strategy is not built in the final weeks before a contract expires. It is developed early, when there is space to think, explore, test, and challenge assumptions. It prioritises depth over speed and robustness over optics.

Once established, the strategy should not be treated as static. Markets shift. Organisational priorities change. What was optimal two years ago may no longer be optimal today. The real power of a category strategy lies in its ability to evolve. By revisiting assumptions and updating insights, the organisation ensures that when the next procurement event arrives, decisions are made from a position of intent rather than urgency.

In that sense, a category strategy is not really a document at all. It is a capability. It reflects how seriously an organisation is willing to think about how it spends money and why.

When procurement teams embrace this mindset, the impact is profound. Conversations move from price to value. From suppliers to solutions. From process to purpose. The strategy stops being something done to satisfy governance and starts becoming something that shapes the organisation’s future.

That is what a good category strategy looks like. Not neat. Not fast. But genuinely strategic.