​September 2025 - What is business partnering?

Procurement have been saying they need to 'do it better' for the past 10 years but does anyone have a winning formula?' In the latest of 1st Executive’s CPO Insight series we posed this question to our network of global procurement leaders.

🔑 What Business Partnering Means to Procurement:

• Business partnering is about building deep, strategic, and long-term relationships both internally (with business units) and externally (with suppliers).

• It moves procurement from a transactional function to a trusted business enabler and strategic advisor.

• Emphasises supplier intimacy, collaboration, and mutual value creation over simple cost savings.

• Acts as a bridge between business objectives and supply market capabilities, ensuring alignment with overall corporate strategy (e.g., sustainability, innovation, risk management).

🌟 Strands of Business Partnering:

1️⃣ Supplier Relationships & Strategic Partnerships

• Move beyond "buying" to co-creating value with suppliers.

• Regular Strategic Relationship Management (SRM) meetings, joint innovation initiatives, and risk-sharing models like "no success, no pay".

• Active participation in industry events (e.g., CPHI, DCAT, EcoVadis) to build trust and alignment.

• Embed sustainability and ethical procurement through shared goals and contractual obligations.

2️⃣ Strategic Role of Procurement

• Shift from cost-focused to value-focused (e.g., margin improvement, resilience, sustainability).

• Use outcome-based KPIs: business impact measures rather than pure savings.

• Align procurement objectives directly with business unit (BU) goals, embedding procurement into strategic decision-making.

3️⃣ Cross-Functional Integration

• Serve as a connector across R&D, Finance, Operations, and Quality, breaking silos and fostering innovation.

• Support business units as internal consultants, helping them achieve strategic objectives while protecting against risk.

• Sit on leadership teams, understand business priorities, and act as advocates for BU needs.

• Encourage 360° communication: procurement informs BUs of market opportunities and constraints, while BUs clarify strategic needs.

4️⃣ Flexible Operating Models

• No universal structure: adapt operating models by category, complexity, and geography.

• Prefer category-focused management over rigid "procurement business partner" (PBP) HR-style roles.

• Structure accountability and responsibility as close as possible to business lines (e.g., regional or site-based category managers).

5️⃣ Digital & Data-Driven Enablement

• Use technology to enable resilience, insight, and agility, not just efficiency.

• Emphasise real-time data visibility to improve decision-making and collaboration.

• AI and advanced analytics empower proactive partnering and market scouting—but require the right questions and context to be effective.

6️⃣ Global vs. Local Balance & Proximity

• Maintain in-person contact where possible to build trust and accelerate problem-solving.

• Balance global scale with local nuances through hybrid approaches.

• Develop informal networks and cross-border clarity to strengthen global supplier partnerships.

7️⃣ Leadership & Culture

• Promote inclusive, adaptive leadership that considers cultural differences and draws out diverse voices.

• Embed procurement teams within business functions, empowering them to co-develop strategy rather than simply approve transactions.

• Develop talent with a focus on commercial acumen, stakeholder engagement, and strategic thinking (not just technical procurement skills).

8️⃣ Internal and External Partner Networks

• Recognise that partnerships exist both internally (with stakeholders) and externally (with suppliers and peers).

• Build long-term, stable networks rather than constantly changing partners.

• Encourage knowledge sharing internally (e.g., playbooks, training) and externally (e.g., joint initiatives with other companies).

• Create a "platform of collaboration" internally, akin to an internal consultancy model.

9️⃣ Talent Development and Capability Building

• Provide personal development plans, continuous learning, and cross-functional exposure.

• Develop category managers as end-to-end business partners with strong commercial and communication skills.

• Move from tactical tasks to strategic impact, focusing on process improvement and value contribution.

1️⃣0️⃣ Commercial and Sustainability Alignment

• Educate and incentivise suppliers (e.g., through carbon pricing, contractual clauses) to meet sustainability and business goals.

• Institutionalise through formal KPIs, contractual obligations, and executive endorsements (e.g., supplier forums with CSOs).

✅ What Best Practice Looks Like:

• Consistent Engagement: Regular, structured communication (meetings, supplier forums, 1-1 conversations) with clear agendas and follow-ups.

• Strategic Alignment: Integrate procurement objectives fully into BU strategies and planning cycles.

• Data-Led Insights: Use spend analytics, supplier performance data, and market intelligence to support decisions and uncover opportunities.

• Proactive, Not Reactive: Address business needs before they become problems; think beyond immediate cost to long-term value.

• Embedded Presence: Sit with the business, understand their language, and be seen as an extension of their team.

• Flexible & Agile Models: Adapt structures and approaches by category and geography rather than a rigid one-size-fits-all framework.

• Culture of Collaboration & Inclusion: Build networks of champions, encourage feedback loops, and value diverse perspectives.

• Sustainability as Core: Make environmental and social goals part of commercial strategy, not a separate add-on.

• Empowered Talent: Invest in capability building, promote from within, and develop critical thinkers who can challenge the status quo professionally.

• Executive Endorsement: Secure visible support from top leadership to reinforce procurement’s strategic role and credibility.

💬 Final Thought:

Business partnering in procurement is ultimately about transforming the function from a transactional service provider to a strategic, value-driving force within the business. The goal is to become a trusted advisor—internally and externally—by embedding procurement in the heart of strategy, championing shared goals, and continuously building resilient, innovative, and sustainable supply ecosystems.