Optimising financial processes

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Why Procurement should be a vital focus for CEOs, CxOs . . .

CEOs spend just one percent of their time with suppliers. 

They rarely mention the work of the CPO in shareholder meetings or on earnings calls with analysts.

This should be a surprise since suppliers typically account for half the operating cost of an organization.

I got this eye-opening perspective from a Boston Consulting Group report summarized recently. You can read it below.

The procurement function is marginalized because procurement is a deeply misunderstood corporate capability.

The procurement function doesn’t just “manage spend”.

It also determines the quality and sustainability of a company’s products and services. It affects the speed of a company’s operations. It has the potential to transform (or quash) a company’s innovative spirit. And it can protect a company from as-yet-unknown risks in the supply chain. 

If leadership use their procurement capability wisely, they can do much more than simply contain costs. They can tap five mission-critical sources of competitive advantage: innovation, quality, sustainability, speed and risk reduction.

Over the past two years, companies have had to deal with volatile swings in consumer demand. The global airline industry was all but grounded. Shipping was severely disrupted with container vessels unable to unload their cargo. And the automotive industry was halted by a semiconductor “famine” in Asia.

Amid this turmoil, CEOs and their leadership teams have been expected to do the seemingly impossible: cut costs while improving the quality of their companies’ goods and services and while making their businesses faster, more innovative, and more sustainable.

If you have an interest or aspiration in strategy, product, procurement, supply chain, finance, source-to-pay, purchase-to-pay or accounts payable, this can serve as some inspiration to raise our game across the board. Our businesses depend upon it.

You can read the source article here . .

Thanks for reading