Transformation Magic: Key Investments for Finance and Procurement

Procurement and finance teams have more in common than one might think — after all, they are both drivers of a positive bottom line for the company.

A recent Deloitte survey of global chief procurement officers stated that 78% of procurement leaders saw cost reduction as their top business strategy. A survey by Scout RFP shows that 77% of financial respondents from companies with more than 1,000 employees said that procurement makes finance and the enterprise more effective, a clear sign that procurement and finance are a match made in heaven.

How can finance and procurement work alongside each other to drive greater business impact for the enterprise as a whole? By investing in the proper technology, teams can easily integrate sourcing into more areas of the business and at the same time increase spend under management. Technology, in turn, must add value to the overall process.

 Invest in the proper tools

When companies invest in tools that provide greater transparency and allow collaboration between people they can bridge the gap between finance and procurement teams. A solution that integrates real-time sourcing more closely with financial planning can provide better visibility into strategic projects and spend under management. In turn, finance and procurement teams can source smarter, plan better, and align business objectives. This way, businesses strategically plan for the future without ‘looking in the rear view mirror’.

Proper sourcing solutions provide complete visibility into funding for projects, execution terms, and data points on cost streams.

Proper sourcing solutions provide complete visibility into funding for projects, execution terms, and data points on cost streams. Not only will this prevent future financial surprises, but will create a clear F&A roadmap, benefiting the company’s overall cash position. When the enterprise has complete visibility into the procurement process — including the stakeholders and suppliers — it can lead to more competitive turnaround times and allow teams to deliver more benefits to the business, without losing sight of projects and timelines. Full visibility for executives allows them to understand where finance and procurement are spending — and creating greater business impact — and report alongside the overall company goals.

More importantly, teams feel more valued and part of the larger enterprise goals when business partners see the business impact generated from procurement and sourcing efforts. Collaboration is the key component that elevates the visibility needed for procurement and finance teams to drive results for the enterprise as a whole. Through collaboration, teams can communicate their goals clearly, understand benefits, conquer challenges, and truly partner with suppliers, making this a winning strategy for all parties involved.

Scale the business with more savings

Anaplan, a pioneer in Connected Planning, utilised these key e-sourcing features to scale their business. Traditionally, Anaplan’s procurement team was known as the firefighting team — constantly putting out fires to satisfy 700 employees in a dozen offices around the globe. The continuous stream of requests put the company’s ability to scale at risk and blocked legal, finance, and compliance teams from accessing critical projects they needed to evaluate. There was no visibility into the projects and a lack of collaboration across the board. With dozens of contracts in the queue at a time, the procurement team was dangerously close to losing context on key decisions.

Levi Strauss & Co. is another example of a company combining the powers of procurement and finance. Since implementing a sourcing platform, the finance and procurement teams have been able to not only see where they are saving but how they can categorise the savings to communicate better results to the business partners.

The company knew it needed to invest in the proper technology to increase the procurement team’s efficiency to support their growth and make it easy to communicate sourcing’s impact on the rest of the company. Within just one year of implementing an e-sourcing platform, Anaplan grew to more than 1,000 employees, generated more than $240 million in revenue, and has 20 offices in 13 countries supporting more than 1,000 customers. Procurement and sourcing are now connected with all functions of the organisation, including finance, risk, and planning. Anaplan now supports contracts for more than 50% of their global spend because they are able to collaboratively source for the future thanks to these new capabilities.

Levi Strauss & Co. is another example of a company combining the powers of procurement and finance. Since implementing a sourcing platform, the finance and procurement teams have been able to not only see where they are saving but how they can categorise the savings to communicate better results to the business partners.

When companies utilise comprehensive sourcing tools, they can empower procurement and finance teams to drive company performance, source smarter, plan better, and align business objectives, ultimately leading to greater business impact and financial success.

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