Getting a board of directors on board with audit sourcing is easier said than done, given the risks involved. Yet the corollary is that if you tackle audit spend based on the board-level visibility it provides, the activity and outcome can provide such a high degree of visibility for procurement and its ability to take on the most risky and nuanced areas and deliver value-based outcomes (not just cost-based), that the overall role of the function can be elevated in a manner that few other initiatives can begin to deliver collectively let alone together (e.g., eProcurement, indirect spending, supply risk management).
One factor working in procurement's favor that Procurian does not get into in detail in their paper (linked earlier in this series) is the shift with CFOs and finance leaders to consider the more frequent and active bidding of different spending areas. Indeed, truly "sacred" ground is no longer as sacred as it once was. Moreover, once finance leaders begin to get a taste for what's possible, it's far easier to convince them to put greater and greater areas of spend on the table (including evaluating "make" vs. "buy" types of questions as well).
When it comes to audit specifically, the types of results that are possible speak for themselves. In one case, as Procurian describes, the proper tackling of the category can lead to spend and performance transparency for the first time resulting in the reduction of hours (e.g., "one company reduced US hours by 24%; Sarbanes-Oxley specific hours were reduced by 35% ... international hours were reduced by 20%." And in the area of rates, the company realized a $45 per hour rate reduction (19%) savings based on the active benchmarking of pricing.
Yet some of the soft benefits that can bring CFOs and boards of directors on board with tackling audit spend are just as important – and potential more (e.g., identifying the right strategy consultants to help with growth and M&A strategy).