Proactive vs. Reactive: Moving Beyond the Price Increase Letter

Belum

31 Dec 2025 — 1 min read

The most successful procurement teams do not just react well to price increase letters; they build systems that make those letters irrelevant. Managing indirect categories requires a shift from spot-buying to long-term category strategy.

1. Build "Should-Cost" Models

Do you know what it should cost to maintain your HVAC system or license your CRM? By building internal cost models based on market averages, you can spot an unfair price increase long before the supplier sends the notification.

2. Contractual Safeguards

Stop signing standard vendor contracts. Ensure every indirect agreement includes:

Price Caps: These limit annual increases to a maximum percentage (the lesser of CPI or 3%, for example).
Notice Periods: Require at least 90 days' notice for any price change, giving you time to find an alternative.
Right to Terminate: This provides the ability to walk away if an increase exceeds a certain threshold.

3. Consolidate the Tail

Indirect spend is often littered with dozens to thousands of small vendors. By consolidating small spend vendors with your larger vendors that offer similar features, you increase your spend with your preferred suppliers, making you a preferred customer and giving you the leverage to demand multi-year price freezes.

From Firefighting to Strategy

Reactive procurement is exhausted by price increases. Proactive procurement uses tools and data to anticipate them. By moving your indirect categories into a managed framework, you transform procurement from a back-office function into a strategic value-driver.

The SourceSight Advantage: Gain visibility instantly and visualize your entire spend landscape, identifying consolidation opportunities and flagging risky contracts before they impact your bottom line.

Don’t Just Say No: A 4-Step Framework to Vet Supplier Price Increases

When a supplier sends a price increase letter citing "market conditions," your first response should not be a flat rejection; it should be a demand for transparency. If your organization is currently accepting increases without data-backed pushback, use this four-step framework to regain control. 1. The Justification Audit

The Invisible Margin Killer: Why Indirect Price Increases Go Unnoticed

In many organizations, direct spend (which includes raw materials and production goods) is guarded like a fortress. However, indirect spend, comprising the software, facilities, and services that keep the lights on, often has an open gate policy. When a price increase letter for a SaaS platform or an office cleaning

AI ROI: A Practical Path Forward

After publishing the first two parts of this series, I heard the same sentiment from leaders across industries: “We use AI and it’s very useful, but we can’t scale the results.” The good news is that most organizations are not far behind their peers. The bad news is

Where Procurement Roles Should Focus

(2026 and Beyond) Let’s be real. Layoffs and market shake-ups have everyone asking: “What’s next for procurement careers?” Here’s the good news, roles aren’t disappearing, they’re transforming. And if you want to stay ahead, here’s where to put your energy. Embrace Digital Skills Forget