Following up on the topic of how and to what extent finance and procurement could or should co-operate. There is also a LinkedIn-thread which I link to below, you might have to become a member to read it.
Key findings after numerous comments on the topic:
Procurement is still misunderstood in many businesses. So it has got to educate both Finance and the wider business about what the value it can and should be bringing. And it needs to do this on an on-going basis.
* Procurement should be viewed as a profit center, not a cost center. After all, money saved = profit (as long as it’s captured, of course)
* Procurement needs to be able to understand and speak Finance’s language. And it also has to be able to speak the language of all its stakeholders – that’s a tall ask
* Finance and Procurement need to be in constant communication. With face-to-face communication and meetings being very important
* Savings need to be going to the bottom line, and to be measured and reported as such. This should be a key KPI for Procurement
* Procurement’s targets need to be aligned to Finance’s aims
* Finance and Procurement should be working together to manage and reduce risk
* Cross-functional working is essential – Procurement and Finance work horizontally across functions, and as Finance’s agent of change, Procurement has to be an expert at making change happen.
I’d welcome other’s views on how Procurement and Finance should be working together.
Linked to that discussion is also this article >>Nearly three-quarters of CFOs believe procurement is more strategic
Discussion in the group Procurement Executives at LinkedIn >>LinkedIn discussion