See how leading builders have transformed procurement.
Discover why procurement and project management are better together.
Learn how a leading builder revolutionised operations with modern procurement.
Project margin doesn't disappear all at once.
Imagine your procurement process is a pipeline. In that pipeline, there are many small cracks: slow approvals, unclear scopes, and pricing decisions made without data. From each of those cracks drips a tiny amount of your project margin. You might not notice at the time, but before long, you'll be knee deep in missed opportunity.
If you have ever looked at a project P&L and thought, 'We delivered on time, but where did the profit go?', this is for you.
Every outdated spreadsheet, missed scope item, or manual contract process chips away at your bottom line. These are not one-off issues, they're structural inefficiencies (for insights on enhancing your procurement efficiency, explore "buying smarter" strategies).
This article breaks down the root causes of margin erosion in procurement and what high-performing teams are doing differently.
Old procurement systems were not built to protect your margin. They were designed to get the job done, typically by someone under pressure and out of time.
That means they are full of hidden overheads. Manual data entry, duplicated effort, and inconsistent workflows eat into profit long before a subcontractor steps on site. For a broader understanding, check out our insights on managing risk in procurement.
Most teams still rely on Excel, Word, Outlook, and PDF to manage procurement. These tools don't talk to each other. People waste hours chasing updates, rechecking emails, and manually stitching together information to get a contract out the door.
The problems don't stop there.
This is not just inefficient — it is expensive. Research shows procurement inefficiencies alone can inflate transaction costs by 15–20% (source: NBER study). That excludes the cost of variations, delays, or disputes.
Margins erode because the entire system is reactive. Problems are noticed too late, decisions happen without full context, and negotiation opportunities vanish in the scramble. For more on the risks involved, read our article on the risks of procurement.
The biggest risk? These losses are invisible. They don't show up as a line item — they show up when your expected margin quietly shrinks week after week.
Traditional procurement is not just slow — it is expensive. The cost is buried in tasks, delays, and errors that repeat project after project.
Every extra step adds cost, even when it is invisible. Managing procurement with Word, Outlook, Excel, and PDF means someone is always chasing something: building tender lists, re-sending emails, or reformatting approvals. The admin becomes its own job — and no one budgets for that role.
Labour-intensive procurement does not, it stalls.
Say a quantity surveyor gets six subcontractor quotes, each formatted differently. One has exclusions buried in an attachment. Another missed drawings. The QS builds a manual comparison matrix, follows up individually, and reworks the recommendation when the price changes. That is hours lost to repetition. None of it adds value to the project.
When scopes are copied from old projects or rushed under deadline, key items can be missed. We have seen a joinery scope exclude fire-rated doors because it was lifted from a previous job that did not require them. That omission became a £28,000 variation. Learn more about avoiding these pitfalls with our scope library.
'It is almost criminal that we sometimes have scope gaps,' says Scott Wadsworth, director of Summit Commercial Ltd.
Incomplete scopes trigger disputes, rework, and margin leakage. They are avoidable — if the tools make it easy to get them right.
Subbies sometimes win packages they shouldn't because nobody spots the risk.
If a subcontractor underperformed on your last two jobs, but that info lives in someone’s inbox or memory, it rarely surfaces in time. The same goes for capacity. If a subbie is already stretched across four sites, that is a delay waiting to happen.
Vendor oversight is not optional. It is how you avoid repeating mistakes. Consider enhancing your procurement process with our performance strategies.
Procurement bottlenecks don't usually start with the subcontractor — they start internally.
A contract administrator sends a recommendation for sign-off, which disappears into an overflowing inbox. They follow up. It gets bounced from commercial manager to director with questions and no context. Meanwhile, the subcontractor’s price expires or they pull out.
Delays push start dates, disrupt programmes, and drive up cost risk. All because the process relied on PDFs and patience.
Procurement decisions shape margin from day one. Here are two questions we often hear from commercial managers and quantity surveyors trying to preserve profit.
Measure the difference between your projected profit and what you actually made. Start with your original budget, add change orders, delays, and overhead, then subtract the final cost from the forecasted revenue. That gap is your margin impact.
Large contracts come with fixed milestones, narrow delivery windows, and layered risk. A 1% slip on a £30 million job can erase £300,000 in expected profit. That shortfall ripples through cash flow, resourcing, and future tendering capacity.
The Old Way of procurement burns time in places you cannot invoice — redrafting scopes, chasing approvals, fixing manual errors, and reworking contracts. Margin does not just disappear in big moments. It leaks through daily inefficiencies that nobody tracks.
The New Way connects everything. Procurement status updates itself. Tender returns are structured. Scopes are templated. Contracts go from draft to signature without printing a single page. You move from searching for answers to having them at your fingertips — all in one system.
You don't need another spreadsheet. You need visibility you can act on.
Book a demo now and see how structured procurement turns margin risks into margin control.
James Metcalfe
