Sanjay Mehta, vice president, mobile infrastructure strategic sourcing, at Nokia, puts to rest the narrow vision of procurement as “someone who comes in and talks about cost.” In a discussion with McKinsey partner Riccardo Drentin, Mehta explains how, in the last decade, persistent market uncertainties have evolved procurement from a back-end function focused solely on cost balance to playing an important role in enterprise decision-making through also managing risk and collaborating inside and outside the organization.
This interview has been edited for length and clarity.
The new role of procurement
Riccardo Drentin: Sanjay, thank you very much for joining us today. Procurement has always been a key part and key function of Nokia, so I wanted to get your insights, your view of how procurement in these 30 years has played a role and how this role has evolved.
Sanjay Mehta: If we go back in history, procurement was considered to be a back-end function. But in the last decade, we have seen procurement come to the forefront where, from a cost point of view, it has played an extremely important role. The uncertainties in the market—related to COVID, the geopolitical situation, war impacts, the semiconductor shortage, and so on—have brought procurement to the table along with supply chain, sales, and R&D, where it now plays an important role in decision-making.
Riccardo Drentin: How have the capabilities of the procurement organization evolved?
Sanjay Mehta: Procurement is generally seen as someone who comes in and talks about cost. While cost balance is extremely important, the way procurement has evolved in terms of new capabilities is risk management. Risk management is one of the key things where getting market intelligence—picking up the signals from the market, and planning and reacting based on those signals—is critical.
The other angle that has evolved in importance is collaboration, both internally within the organization with cross-functional teams, and externally with suppliers and partners. Today we need to collaborate very closely with our supplier base to make sure that it results in a win-win situation for both supplier and ourselves.
Riccardo Drentin: I think the procurement role is one of the most complete roles in a company. When you go and scout people for your team, what do you look for?
Sanjay Mehta: Procurement is all about attitude of the person, interpersonal skills—how you can collaborate internally and externally. Cost balance is one thing, but you also need to have communication skills by which you can achieve that win-win scenario and build trust with your suppliers and your stakeholders.
AI: Hype or lasting transformation?
Riccardo Drentin: Do you think AI is hype for the procurement function, or is it here to stay?
Sanjay Mehta: I think it’s here to stay. Using AI, you can get more, and very quick, market intelligence. You can use AI for contract management, to get inputs related to your category strategy, and so on. That journey has started, but I would say we are still at the beginning of it, with a long way to go.
Riccardo Drentin: In the past, adoption of digital solutions has always been the key turning point for procurement organizations. Do you think adoption will be an issue with AI also, or because AI is more user-friendly than past solutions, it will be less of an issue now?
Sanjay Mehta: There is always resistance to change. I think that is human nature. One of the key things people fear is that AI will take over their jobs. My response to that is no, AI will not take over our jobs. I think AI will bring value to procurement in terms of decision-making, being more efficient, and helping build the category strategies. So it is the right time now to jump on the AI train and be part of that journey.
Riccardo Drentin: Do you see AI bot versus AI bot negotiation coming up in the next three to five years? Would you still sit at the table with your key suppliers, Sanjay, or will you be replaced by a bot?
Sanjay Mehta: I still feel it is very difficult to take out the human angle from that. The final decision has to come from the human angle.
Riccardo Drentin: You provide service procurement in dozens of countries, with dozens of suppliers. Do you think AI will allow you to completely make a shift in your category strategies?
Sanjay Mehta: I think it has the capability to do that. Long-tail suppliers are a pain for every procurement organization, no doubt about that. I think there are a lot of actions already happening through the digitalization platforms in the market today. But this creation of supervendors and the like through AI will probably help a lot in terms of consolidation and in making things more cost-effective. There might be a premium you have to pay as a result of this exercise, but still, in the overall scheme of things in terms of TCO [total cost of ownership], quality, and managing risk, that is the way to go.
What keeps a CPO awake at night?
Riccardo Drentin: What are the two or three challenges that are top of your agenda at the moment in 2026?
Sanjay Mehta: Risk management is one of the key things. We are living in a very uncertain world. Things are changing very fast for many reasons. The AI supercycle is driving demand very high. There is currently a big demand-supply gap in the market in many categories.
Another challenge is geopolitics. There are many things driven by geopolitics that cause uncertainty. Risk management and picking up the signals early enough so you don’t miss anything is very important so you can react and take actions to mitigate the risk.
Riccardo Drentin: How do you try to stay ahead in terms of risk and getting these signals? Is it constant communication with suppliers?
Sanjay Mehta: There is no better way than to get these signals from your relationship and your communication with suppliers at the ground level. That’s where the first signals come from. And using AI to get the market intelligence is important as well.
One thing we have learned the hard way is that you also need to have visibility of the upstream. The intelligence doesn’t end at your first-year supplier base; it goes beyond that. Who is the supplier of your supplier, and so on?
Category managers play a very important role here. They are the ones interacting with the suppliers on a daily basis. They are our eyes and ears on the ground.
The next generation of procurement leaders
Riccardo Drentin: This last question is to a younger self or a fresh-out-of-university professional who joins procurement. What would your recommendations be for them to succeed in the role?
Sanjay Mehta: For a procurement function, cost balance is very important. That’s not going anywhere. Apart from cost, another piece of advice to the younger generation or someone coming in new to procurement would be risk management. Keep your eyes and ears open, talk to your suppliers, get those signals from the market, and take actions based on those signals early enough to mitigate the risk.
The other recommendation I have for procurement’s new generation is collaboration: Collaboration internally across your organization with the stakeholders and different functions, and even more critical, collaboration with your suppliers, are extremely important.
Riccardo Drentin: I agree, especially about the collaboration. With the latest technology, more and more people are working in their own bubble and delivering the assignment, but spending less time building personal relationships. I think that balance of working with the new technology, but working in a new way, is absolutely key for us in procurement. Thank you, Sanjay.
