What can Finance expect of Procurement?
Well, it’s often been suggested that Finance and Procurement are at loggerheads about what is good for the organisation?
Is it savings? Is it risk reduction? Is it ensuring that sustainability a core focus, or even commercial outcomes? All of the above?
To find out we’re taking a deep dive into the results of a study Grosvenor Procurement Advisory conducted in conjunction with Michael Page.
We surveyed 91 organisations, 42 respondents were from a Procurement background and 38 were from a Finance background; including 31 CFOs and 17 CPOs.
The Finance / Procurement relationship
- In more than half of all organisation’s procurement operates independently to the company objectives – procurement’s goals aren’t aligned with those of the rest of the business.
- Finance requires cost savings as well a long-term value, where procurement would prefer to just focus on long term value.
- Our respondents say that Procurement should focus on value creation, instead of a current focus on cost reduction and risk mitigation.
- Public sector procurement teams could not be further away from focussing on what is required of them (they focus on cost and risk, instead of sustainability and improving the business).
- How closely aligned procurement is to the overall organisation is the key differentiator between mature and immature procurement functions.
- Procurement’s most important goal is the ability to improve the way in which the organisation operates.
From these key findings, the following articles will explain the ‘why’, and implications behind our survey responses.
To start, we will explore why procurement and the rest of the business are not on the same page. So stay tuned.