Few CFOs view procurement affecting competitiveness

CPOs and CFOs are on the same page, but speak a different language

By Paul E. Teague -- Purchasing, 12/20/2007 12:52:00 PM

Chief financial officers universally look to their chief procurement officers to help make their companies more competitive, right? Not necessarily. Actually, less than 20% of CFOs consider the work of CPOs and their staffs as having a very positive impact on competitiveness, according to a new benchmark report by Aberdeen. The report was partly underwritten by Zycus. 

The study also revealed that of the 11.9% of average annual identified savings only 3.2% actually gets booked—a difference of 73% from identification to realization!

The communication gap between the procurement and finance departments has emerged as the single most serious challenge in purchasing’s ability to deliver savings to the enterprise, the study found.

The findings, based on a survey of over 500 finance professionals, underlines Zycus’ product vision that the finance department and top management should be stakeholders in every spend-management initiative, Zycus executives say.

“No Enterprise Spend Management initiative is complete without the partnership of the finance department and executive support,” says Aatish Dedhia, CEO, Zycus Inc. Adds Andrew Bartolini, vice president of global supply management research at Aberdeen, “finance and procurement are natural allies in the battle for bottom-line growth.” 

Other findings in the study:
· Procurement executives continue to have issues getting on the chief financial officers’ agenda, leaving procurement’s expansive transformation incomplete.
· On an average, only 46% of CFOs feel that the procurement team has contributed to enterprise growth, while just 57% feel that procurement contributes to enterprise profitability.

The research recommends that enterprises encourage improved communication between finance and procurement, beginning with the definition of a “common language” between the two groups. See http://www.aberdeen.com/link/sponsor.asp?spid=30410356&cid=4202 for a free copy of the report, compliments of Zycus.

To read how purchasing executives can learn how to speak the CFO’s language, see http://www.purchasing.com/article/CA6329338.html