The Chief Financial Officer has a significant role to part in the development and implementation of a strategic procurement philosophy.
The functions that the procurement function performs – supplier management, sourcing and contract management – are often referred to as strategic procurement. However, by working in partnership with the procurement function, the CFO can better understand and leverage strategic procurement in conjunction with other spend control initiatives, to deliver positive impact on the bottom line.
The CFO role is thus;
1. work hand in hand with the senior procurement people
2. use their sphere of influence to gain organisational support for strategic procurement
3. help with the refinement and implementation of procurement policies to drive savings
4. help guide the application of enabling technology
More and more CFO are taking an active interest and it’s not uncommon for the procurement function to report directly to the CFO.
One of the key elements of success is the ability of the procurement team to drive value right to the bottom line. However, the dilution effect from close of negotiation to implementation can impact on the relationship. As such, forward thinking procurement teams are focusing on the four areas that restrict this dilution.
I’ve pulled together a short video series outlining this four steps in more detail – click on the link below to gain access.