Published on the 14/05/2026 | Written by Heather Wright

Risk tolerance and agile buying – or how to stop buying by spreadsheet…

Would you buy a car or motorbike by drawing up a spreadsheet of requirements and sending it to dealers to quote against – without ever sitting in it, driving it, or seeing how it actually feels on the road?

That’s the analogy Luke Ellery, a Gartner Sydney-based VP analyst, uses to describe how many organisations still purchase technology: Rigid requirements, locked in early, a process built around evaluation rather than learning with little room to adjust once the market responds.

“Risk‑tolerant leaders didn’t accept risk by default – they made better decisions.”

According to Gartner research, it’s also a pattern which comes with a high price. A Buyers Regret survey a couple of years ago found 79 percent of buyers regretted their most recent purchase – a figure Ellery says ‘blew me away’ and prompted new research to discover how to get a ‘high-quality deal’.

The answer wasn’t a better RFP or harder negotiations, but consistent use of five modern buying practices, he told attendees at Gartner’s IT Infrastructure, Operations and Cloud Strategies Conference this week. Organisations that applied all five achieved the high-quality deal nearly 60 percent of the time.

And the principles?

• Ensure the most senior-level sponsor is engaged throughout.
• Start with measurable and realistic business outcomes (and dump the detailed spreadsheet)
• Harness agile and lean procurement methods (again, dump the spreadsheet)
• Get thoughtful about risk tolerance – and this doesn’t mean being risk averse
• Build confidence in negotiating with vendors – and include some theatre where needed

Ellery acknowledges that some of the principles are already widely used. Sponsor engagement was already practiced by 75 percent of respondents. Fifty-five percent start with business outcomes, and just 30 percent use agile or risk tolerance approaches.

“But it’s about doing all of these practices consistently,” he says.

Getting agile

One of the biggest shifts Ellery called on businesses to embrace, was the move away from traditional, waterfall-style procurement, with its rigid, linear processes ad policy and compliance focus. He noted that while businesses are increasingly embracing agile business strategies, that needs to be coupled with an agile sourcing strategy.

He says the waterfall method assumes buyers already know what’s possible in the market and leaves little opportunity to adapt as insights emerge.

By contrast, agile buying approaches are framed as a learning and refining cycle. Teams start with business outcomes, engage the market to understand what solutions exist, evaluate what they learn, refine their thinking and repeat if necessary, or adopt a solution.

The car-buying analogy makes the point – you only learn what you want and what works by experiencing options and adjusting expectations.

Ellery notes that agile procurement shouldn’t be treated as a defined ‘process’. Instead, it’s a philosophy, similar to Lean, based around not being rigid.

And while many government departments believe the waterfall method is mandated, he urged them to double-check if that was truly the case. “Whenever I speak to the people who are responsible for policy, typically it is not. It’s just an interpretation. So it’s worth checking if it is the case or not,” he says.

Ellery says organisations should invest in skills and training for the procurement team to ensure they have agile approaches, then help the business with the learning and refining approach so they start getting excited about what they can learn from the market, in order to reap the 1.8x improvement in procurement seen through agile.

Risk tolerance: The biggest lever in better outcomes

If agile buying creates the room to learn, risk tolerance determines whether organisations take advantage of it.

Of the five practices highlighted in the research, risk tolerance delivered the highest impact on outcomes with a 2.1x improvement.

Crucially, Ellery stresses that risk-tolerant leaders are not those who ignore danger or accept risk by default. Instead, risk-tolerant leaders make better informed decisions by gathering more sources of information, understanding trade-offs and actively mitigating risks rather than avoiding them altogether.

Risk aversion, by contrast, can blind organisations to the opportunity. When teams avoid unfamiliar options because of uncertainty, they may miss better outcomes simply because they didn’t invest in understanding what the risks actually were.

Ellery says this mindset is reshaping organisational roles. He points to a growing trend, which began in financial services but is spreading more broadly, where IT sourcing, procurement and vendor management teams take on third-party risk management. These teams, he says, are already skilled at managing structured information and processes, making them well-placed to support better risk-informed decision-making.

Engagement, outcomes and negotiation confidence

Ensuring engaged leaders from the outset is already in use by the majority of companies and it’s a winning strategy, leading to 2x improvement for procurement. Ellery notes the outcomes depend on consistency, not symbolic involvement.

Similarly, shifting from detailed specifications to measurable business outcomes helps buyers and vendors alike focus on what success actually looks like. While 55 percent of organisations start with business outcomes, many still revert to long requirement lists that reflect today’s systems, rather than tomorrow’s needs.

He cites the example of a government entity which tried the same procurement three times, failing each time. Ellery was brought in to troubleshoot. One red flag: The organisation went to market with a spreadsheet of 2,000 requirements. When asked where it came from, the business analyst said they’d documented what the agency was doing today on the mainframe systems they were trying to replace.

“When a client sends me their user stories around what they want to achieve, I can see straight away what sort of solutions they need,” he says. “If they send detailed specifications, it’s going to be very difficult for me to work out.

“It’s easier to focus on the business outcomes and user stories, though sometimes it takes a bit of training your users, business analyst or the business owners around what a user story is – how we define it and what in a good example. But that’s a lot easier than coming up with a spreadsheet of requirements.”

Negotiation confidence also contributes, delivering a 1.4x improvement in outcomes. Here, confidence comes from preparation, knowledge and internal alignment, not from aggressive tactics or last-minute pressure.

A little theatre also won’t go amiss. Ellery trotted out a favourite story of the CFO who arrived late into a meeting with the vendor of an ERP solution they had fallen in love with but were having issues with the vendor not agreeing to three key aspects in the contract. She then walked out early when the vendor team continued with a sales pitch rather than addressing the issues. The vendor was escorted from the premises. Three days later they conceded on all points.

“It was all staged. The CFO turning up late, her walk out… Sometimes you need to use a little theatre to make sur the vendor knows your serious,” he says. (And if you want to hear more about negotiation theatre, read our story here.)

“We can all learn a bit around negotiation confidence and being better negotiators.”