The 4 stages of procurement maturity: where does your company stand?

At some point, every procurement manager gets this question from leadership: "where do we actually stand on procurement?" And often the answer is not simple, because no one ever decided, in a meeting, what the process should look like. It simply grew along with the company.

The process that worked perfectly when the company had 20 people is still running, unchanged, now that it has 120. Not because it is good, but because no one stopped to rebuild it. The right question is not "do we have a good process or a bad one?", but "what maturity stage are we at, and what does the next one look like?".

Below are the four stages the procurement function usually goes through. Read them and place your company. You will most likely recognize yourself very clearly in one of them.

Stage 1: Uncoordinated. "Everyone buys however they can"

At this stage there is, in practice, no process. Each department, and sometimes each person, buys on their own. Requests travel by email, phone and hallway conversations. Approval means "the boss told me it is ok". There is no single place to see what was ordered and from whom.

Who is here: young or small companies, growing fast, where speed mattered more than order. Often, procurement is no one's explicit responsibility. Whoever has time does it.

What it costs you: duplicate orders, different prices from the same supplier because several people negotiate separately, expenses you only discover in the accounting books. No one can answer "how much did we spend with supplier X this year?".

The signal you have outgrown it: you no longer know who ordered something, or with what approval. The chaos is no longer occasional, it is the normal state.

Stage 2: Formalized, but manual. "We have a process, but it lives in spreadsheets"

Here a process already exists. There is a requisition form, the approvals follow a defined order, there may even be a procurement person or team. On paper, everything is defined. The problem is that the process lives in emails, spreadsheets and shared folders. Nothing enforces it, everything depends on people's discipline.

Who is here: most mid-size companies in Romania. They have moved past the chaos, they have set rules, but they do not have a system that holds them. The rules exist in procedures, not in software.

What it costs you: the process is slow, because every approval means catching a person. The budget is checked after the money is spent, not before. Traceability exists, but it is scattered across inboxes, so at audit time reconstructing the history becomes a project in itself.

The signal you have outgrown it: you spend more time chasing the process than running it. Questions like "which budget was this on, and who approved it?" no longer have a quick answer.

Stage 3: Digitalized. "The process lives in a system, not in inboxes"

At this stage, the process no longer depends on anyone's memory or discipline. Requests start from a standard form. The approval flow is built automatically, based on value, department and hierarchy. The budget is checked at the moment of the request, not a month later. Every request has a complete history, available at any time.

Who is here: companies that have decided the procurement process deserves its own tool, just like invoicing or accounting. They usually made the jump because stage 2 had simply become too expensive.

What you gain: decisions are made with the information in front of you. Approvals no longer get lost. Month-end close no longer brings surprises, and audit becomes a non-event, because everything is already documented.

The signal you are ready for the next one: you have control, but you start wanting to use the data you collect, not just look at it.

Stage 4: Strategic. "Procurement creates value, it does not just process requests"

The last stage is no longer about control, control is already a solved problem. It is about what you do with the information. Spend data gets analyzed: who you spend the most with, where you can consolidate, where you can renegotiate. Procurement is part of the conversation when budgets are planned, not only when they are spent.

Who is here: large companies, with a mature procurement function, where the procurement director sits at the same table as the CFO.

What you gain: procurement contributes directly to margin. Suppliers are chosen on data, not on habit. Future spending can be anticipated, not just observed after the fact.

The jump that matters most

If you recognized yourself in stage 2, you are in the company of most mid-size firms in Romania. And that is also where the biggest jump is to be made, because moving from stage 2 to stage 3 is the only one that fundamentally changes the way you work. Stage 1 to 2 means writing down some rules. Stage 3 to 4 means refining something that already works. But 2 to 3 means moving the process out of people's heads and out of inboxes, into a system that holds it on its own.

The good news is that this jump does not require a revolution. You do not change the way your company works, only the place where the process lives.

How to move up a stage, without turning everything upside down

The Procure-to-Pay module in Latitude App is built precisely for the jump from stage 2 to stage 3. It takes the process you already have defined on paper, with request, approval, budget control and order, and places it in a single system, with rules configured to match your reality: your approval hierarchies, your value thresholds, your analytical structures across projects and departments.

People fill in the same requests. Approvers approve the same things. The difference is that, this time, the process no longer depends on who remembers to forward an email.

Built in Romania, for companies here

Latitude App is a 100% Romanian company, and Procure-to-Pay is a product designed and written here, from scratch, not software imported and translated for the local market. We built it starting from how companies here actually move from one stage to the next: with real analytical structures, with approval thresholds that differ from one company to another, with multiple currencies and VAT rates that do not stand still.

We do it because a company in Romania deserves a tool just as good as any other in Europe, built by people who know its reality.

Frequently asked questions

Can we be at different stages depending on the department?

Yes, and it is very common. The IT department may have a clear process, while administrative purchasing still runs on email. Place your company by the area where the most money is spent, or where the pain is greatest. That is where a stage jump is felt the fastest.

Do we have to go through every stage in order?

Not necessarily. A small company at stage 1 can jump straight to stage 3, because it has no complicated manual process to "undo" first. The stages describe maturity, not a mandatory step-by-step path.

How do I know it is time to make the jump from stage 2 to stage 3?

The clearest signal is simple: if questions about a spend ("who approved it, on which budget, when") no longer have a quick answer, your process has already outgrown what a spreadsheet can carry. It is not a matter of company size, but of how often you hit that wall.