Voice your opinion!
Voice your opinion!
To join the conversation, and become an exclusive member of IndustryWeek, create an account today!
Sponsored
Sponsored
At least in theory, a manufacturer's finance and procurement departments should be natural allies, sharing many of the same goals and challenges and working in an aligned, coordinated fashion. In a perfect world, maybe. But according to a recent survey conducted by analyst firm Aberdeen Group, less than 20% of chief financial officers consider the work of chief procurement officers (CPOs) and their staff as having a very positive impact on competitiveness.
The sentiment actually illustrates a long-standing obstacle that many companies face -- a fundamental breakdown in communication between the two departments. Earlier last year, Aberdeen reported that procurement, by its own admission, fails to implement 21% of the savings identified from its sourcing efforts. And by the time finance enters the equation to account for the booked savings, the number drops to 3.2% -- or only 27% of what procurement and sourcing teams initially identified.
While some traditional views place blame solely on procurement, the new report contends that the drop from implemented to booked savings is a larger issue than one party's failure -- but rather an underlying issue that needs to be addressed. A fix-all solution is easier said than done, but a step in the right direction has CPOs working with their CFOs to redefine their collective measures of success.
Aberdeen Group offers the following tips to help improve the lines of communication.
See Also