Across private equity portfolios, leadership teams are under increasing pressure to improve performance, reduce operational friction, and create tighter alignment with value creation plans. Yet many portfolio companies, particularly those in the lower and middle market, face a structural challenge. They must modernize their procurement operations to gain control over spend, reduce leakage, and improve efficiency, but they lack the internal capacity to build large procurement teams or implement complex enterprise systems.
Historically, procurement modernization has been associated with multi-year transformations, major technology investments, and large global teams. For lean organizations focused on growth, these traditional models were neither feasible nor attractive. As a result, procurement often remained fragmented, manual, and reactive.
Today that paradigm is changing. The emergence of digital procurement platforms designed for instant deployment and minimal overhead is enabling portfolio companies to access capabilities that were once available only to large enterprises. These platforms create a new operating model where procurement can be modernized quickly, without building internal infrastructure or hiring specialist teams.
This shift is reshaping how private equity firms think about value creation and operational improvement. It is giving portfolio companies the ability to scale procurement maturity in months rather than years. Most importantly, it allows lean operating models to remain lean while still capturing the advantages of enterprise-grade procurement.
Why Procurement Modernization Matters for Portfolio Companies
Procurement is one of the most direct influencers of EBITDA, working capital, and operational stability. Yet in many portfolio companies, procurement is not recognized as a strategic lever. Instead, purchasing is often decentralized. Teams place orders through email, WhatsApp, or direct supplier communication. Catalogs are inconsistent, price lists are outdated, and approvals depend on individual managers rather than structured workflows.
This creates several challenges:
1. Limited visibility into spend
Without digital workflows, leadership teams cannot access real-time insights into purchasing behavior.
2. Higher costs from inconsistent pricing
Without consolidated catalogs or negotiated agreements, portfolio companies often pay more than they should.
3. Process inefficiencies that absorb valuable time
Manual purchasing takes team members away from operational roles and introduces avoidable delays.
4. Limited ability to scale
As companies grow, manual processes create bottlenecks and risk operational breakdowns.
5. Poor financial discipline
Invoice mismatches, duplicate orders, and approval gaps reduce financial control.
These issues do not arise from a lack of capability or competence. They arise because most portfolio companies were not designed with scaled procurement in mind. Their focus is growth, operations, and customers. Procurement has historically been treated as an administrative necessity rather than a strategic function.
Modernization changes this dynamic by giving companies the tools and structure required to strengthen operations without adding organizational complexity.
The Changing Landscape: Procurement Without the Overhead
Modern procurement platforms are enabling portfolio companies to adopt advanced procurement capabilities without the traditional burden of large systems or teams.
The innovation lies in the simplicity of deployment and the integration of three essential capabilities:
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Digital catalogs with negotiated pricing
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Automated workflows for approvals and purchasing
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Integrated payments that ensure compliance and spend control
This model allows companies to modernize procurement through a unified environment that drives consistent purchasing behavior while reducing manual effort.
Platforms such as Mulberri’s eGPO showcase how this approach can deliver enterprise-grade capability with minimal onboarding effort. While each business chooses its own path, the conceptual model remains the same: provide organizations with instant procurement capability without expecting them to build it.
This shift creates a new operating reality for portfolio companies.
How Portfolio Companies Can Modernize Procurement Without Building Teams
Modernization begins with addressing the constraints that have traditionally limited procurement development. By replacing manual workflows with automated, catalog-driven purchasing, portfolio companies can achieve higher levels of efficiency and control.
Below are the core components of this new approach.
1. Leverage Digital Catalog Content Instead of Manual Supplier Management
In a traditional procurement environment, each department maintains its own relationships, price lists, and vendors. This creates inconsistency and increases spend leakage.
Digital catalog content standardizes purchasing by providing:
- Pre-negotiated supplier pricing
- Updated product catalogs
- Approved categories and items
- Clear visibility into purchasing options
Employees no longer search external websites or negotiate individually. They access a centralized catalog that ensures the right products are purchased at the right price.
Digital catalogs eliminate the need for a dedicated procurement team to maintain pricing and supplier relationships. The platform handles this administratively, allowing the business to focus on execution rather than maintenance.
2. Use Automated Purchase Workflows to Reduce Operational Effort
Automation elevates procurement maturity in a way that manual processes never could.
Automated workflows handle:
- Purchase order creation
- Approval routing
- Order processing
- Invoice matching
This shifts responsibility away from individuals and toward the system. It allows leadership teams to maintain control without adding layers of oversight.
Automation ensures:
- Faster purchasing
- Fewer errors
- Reduced administrative burden
- Stronger compliance
- Accurate audit trails
This is particularly valuable for portfolio companies that operate with lean finance teams or minimal procurement oversight.
3. Integrate Payments to Close the Loop
Digitizing payments is essential for maintaining control. Integrated payment systems ensure that spend flows through approved channels, enabling clear reporting and real-time visibility.
This benefits portfolio companies by:
- Eliminating off-book spending
- Improving cash control
- Reducing invoice reconciliation effort
- Strengthening financial discipline
When catalogs, workflows, and payments work together, procurement becomes seamless. Companies modernize without building new departments or implementing heavy technology.
Why This Model Works for Portfolio Companies
The reason this model is so effective lies in its alignment with the realities of portfolio operations.
1. It avoids organizational bloat
Portfolio companies do not need large procurement functions to adopt modern purchasing methods.
2. It eliminates the need for traditional enterprise systems
Legacy procurement systems are expensive, slow to implement, and maintenance-heavy. The new model offers capabilities without the complexity.
3. It supports rapid integration into value creation plans
PE firms are often required to demonstrate operational progress within the first 100 days. This model allows procurement modernization to be implemented quickly and visibly.
4. It standardizes purchasing while respecting autonomy
Portfolio companies can leverage centralized procurement intelligence while retaining decision-making flexibility.
5. It improves performance across all levels of the business
Even companies with limited procurement maturity gain access to structure and control.
This is where solutions such as Mulberri’s eGPO conceptually demonstrate how the right platform transforms purchasing from a manual process into a strategic advantage. But the guiding principle is universal: procurement modernization no longer requires scale.
The Strategic Impact on Value Creation
Procurement modernization directly influences the metrics that matter most to private equity firms and portfolio company leadership.
1. EBITDA impact
Consistent pricing reduces cost variance and improves margins across categories.
2. Working capital improvement
Payment and approval controls reduce excess inventory and improve cash flow.
3. Operational risk reduction
Automated workflows minimize errors, compliance issues, and supplier inconsistencies.
4. Scalability and post-acquisition integration
Newly acquired companies can be integrated into a modern procurement system quickly.
5. Stronger supplier partnerships
Digital catalogs and structured payments strengthen supplier trust and accountability.
These outcomes collectively increase enterprise value while reducing operational complexity.
The Future of Procurement for Portfolio Companies
Procurement modernization is no longer reserved for large enterprises. Digital platforms make it possible for even the leanest organizations to adopt best practices without the overhead of building teams or complex systems.
For portfolio companies, this represents both an immediate opportunity and a long-term competitive advantage. The ability to scale procurement maturity without scaling headcount allows organizations to grow faster and more efficiently. It ensures that purchasing contributes directly to value creation rather than becoming a bottleneck.
The companies that adopt this model will be better positioned to thrive in environments where cost pressure, supply chain volatility, and operational expectations continue to increase.
To learn how procurement modernization can be implemented quickly and effectively across your portfolio companies, explore the guided walkthrough of Mulberri’s eGPO capabilities
