Why Procurement Gets Handed to the Office Manager — and What It Costs You

There's a pattern that plays out in almost every business between 20 and 200 people. At some point — usually when the company has outgrown the founder doing everything — someone needs to sort out the office supplies, manage the IT contract, and chase the insurance renewal. That job lands on the office manager. Or the EA. Or whoever happened to be nearest when the question was asked.

It's not a bad decision. In fact, it's entirely rational. Procurement at that scale doesn't justify a dedicated hire. A CIPS-qualified procurement professional costs an average of £54,576 in salary alone — before employer NI, pension, benefits, and the time to hire. For a business spending £200,000 a year on indirect categories, the cost of a dedicated resource would consume a significant portion of any saving they could generate.

So procurement becomes a task rather than a function. And tasks, by definition, don't get managed strategically. They get done when they become urgent.

The structural problem with task-based procurement

When procurement is managed by someone for whom it's not a core responsibility, three things happen reliably.

1. Contracts auto-renew unreviewed

Most commercial contracts have a 30–90 day notice window for cancellation or renegotiation, buried somewhere in clause 14. An office manager managing 15 other priorities is not tracking those dates. The contract rolls. The price increases by RPI or CPI, often automatically, often with a brief email that never gets escalated. Multiply this across four or five key contracts and you're looking at a compound cost increase of 3–6% annually on already-above-market rates.

2. The first quote gets accepted

When someone needs a new supplier and has no benchmarks, no category knowledge, and no time, they do the rational thing: they get one or two quotes, pick the one that seems reasonable, and move on. Competitive tension — the mechanism that drives pricing down — never materialises. The supplier knows this. Pricing to an uncontested market is rational supplier behaviour, not exploitation.

Research by the Chartered Institute of Procurement and Supply consistently shows that businesses that run structured competitive processes achieve 12–18% savings on comparable spend versus those that accept the first reasonable quote. On a £500,000 indirect spend base, that's £60,000–£90,000 per year.

3. Specification quality is low

A well-written procurement specification does three things: it forces the buyer to clarify what they actually need, it prevents suppliers from proposing solutions the buyer doesn't want, and it creates a clear standard against which delivery can be measured. Most task-based procurement produces specifications that are two or three sentences long. The result is proposals that are impossible to compare, contracts that are impossible to enforce, and disputes that are impossible to resolve.

Why this is rational behaviour and a structural failure simultaneously

The decision to handle procurement as a task rather than a function is rational at each individual moment. A 30-person business spending £150,000 on indirect categories genuinely cannot justify a dedicated procurement hire at £54,576 plus costs. The ROI case is marginal at best.

But the structural failure is that the alternative — doing nothing structured — isn't actually cheaper. It just moves the cost from visible (salary) to invisible (overspend). The overspend is real, measurable in hindsight, and in most businesses significantly exceeds what a properly resourced procurement function would cost.

McKinsey's research across 1,900 organisations over 18 years found that top-quartile procurement functions add 5 percentage points of EBITDA compared to bottom-quartile performers. For a business with £2M revenue and a 15% EBITDA margin, the difference between bottom-quartile and top-quartile procurement is £100,000 per year. That's not theoretical — it's the cost of doing it badly versus doing it well.

The categories where the gap is largest

Not all categories are equally affected by task-based procurement. The categories where the cost of poor procurement is highest are those with the most supplier pricing flexibility — which tends to correlate with complexity, low buyer knowledge, and infrequent purchase cycles.

What changes when procurement is taken seriously

The businesses that get procurement right — at SME scale — don't necessarily have large teams. They have structured processes applied consistently to their significant spend categories. The process doesn't need to be complex. It needs to be disciplined.

A structured SME procurement process covers five things: knowing what you're spending (spend visibility), knowing what the market rate is (benchmarking), running a competitive process for significant contracts (tendering), documenting what was agreed (contracting), and reviewing contracts before they auto-renew (calendar management). None of these require a specialist. All of them require time that task-based procurement never has.

The question is not whether to invest in procurement

The question is how. Historically the options were: hire a procurement professional (expensive, hard to find, often over-qualified for the category breadth required), outsource to a consultancy (project-based, expensive, relationship doesn't compound), or continue with task-based procurement and accept the overspend.

The emergence of procurement-as-a-service as a model changes this calculus. On-demand procurement capability — applied to specific requirements when needed, without retainer or headcount — makes the ROI case achievable for businesses that previously couldn't justify the investment. The question is no longer whether procurement is worth taking seriously at SME scale. The data has always been clear on that. The question is whether the mechanism to take it seriously now exists at an accessible price point.

For most UK businesses between 10 and 500 people, it does.