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20 April 2012 | Adam Leach
Almost three-quarters of CFOs think procurement has become more strategic over the past three years, citing increased supplier collaboration and the negotiation of improved discounts and rebates.
Reaching New Heights: The Dividends of Collaboration between Finance and Procurement, published by CFO Research Services and Ariba, found that of the 263 senior finance executives surveyed, 24 per cent saw procurement as much more strategic than three years ago. In addition, 49 per cent saw it as somewhat more strategic and 23 per cent said it was unchanged. Just three per cent said it was somewhat less strategic, while one per cent said it was much less so.
Sam Knox, senior vice-president and director of research at CFO Research Services, said in a statement: “Procurement has traditionally been recognised and rewarded solely on the basis of its cost-cutting ability. But through the productive use of automated systems, the function has been able to move beyond simply meeting savings targets to help address larger, more complex issues such as managing cash and capital, managing risks to business performance, and expanding into new markets or business lines.”
Unsurprisingly, the most important contribution by procurement identified by respondents was the improvement of process efficiencies (52 per cent). But the function’s contribution in a range of areas was cited, such as improving collaboration with suppliers (40 per cent), improving discount and rebate capture (40 per cent), increasing automation in the procurement process (39 per cent), detecting and mitigating risk (37 per cent) and strengthening the working relationship with finance (36 per cent).