How can finance and procurement better collaborate to improve supply and spend management? Well, Pierre Mitchell, chief research officer, has already giving us a number of ways this can be accomplished in his Chief Procurement Officer series "17 Ways Finance Can Help Procurement." The series is based off a recent snap poll Spend Matters and the Institute for Supply Management conducted on the alignment between finance and procurement organizations. Each new post checks another number off our list.
In the last week, Pierre has checked off Nos. 12 and 11 – you can read the full articles below:
No. 12, Pierre explains why procurement wants more insight on contract, saving and spend visibility, and how finance can make that happen. Procurement wants to prove how valuable it can be by effectively showing CFOs accurate and useful spending and savings data. Working together is also beneficial for both finance and procurement. Pierre writes:
"You’d think every CFO would want a report detailing how much money could be saved by reducing duplicate payments, overpaying for contracted items with risky suppliers and so on. Similarly, you might think CFOs would want similar visibility into contracts and associated financial obligations, or the ability to fast track negotiated cost reductions and other factors – such as volume variances, currency and spec changes – to a resultant impact on planned and actual budgets. Yet when it comes to investing, such rational thinking falls by the wayside relative to other priorities."
In No. 11 of the series, Pierre tackles the supplier master data management system, calling attention to the need that there needs for one MDM process that works for both procurement and finance. The Spend Matters and ISM poll found that procurement wants such a process so suppliers can be managed "strategically and in a more tailored way based on the nature of the spending with them..."
Make sure to read the full articles for details on the study and on Pierre's analysis of the results. And, stay tuned to CPO as we count down to the No. 1 way finance can better aid procurement.