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Ep 02 Inside Procurement: The CPO – CFO Relationship, Making it work
In this second fantastic episode of our new podcast series, we look at the relationship between the CPO and the CFO – that is, the Chief Procurement Officer and the Chief Financial Officer.
The fact is that CFOs and CPOs share a special relationship – and it’s one that has taken on much more prominence and significance over the last 2-3 decades.
CFOs today are aggressively focused on managing and improving their company’s top and bottom-line performance. While there are a range of levers they can pull to influence corporate performance, of special significance is the role Procurement plays in delivering a very direct impact to the bottom line.
At their core, these two executives and their teams have the same goal – and in many instances, simply come at them from different vantage points.
Through our analysis, we see several key success factors, which we discuss in the form of a checklist of success factors for each executive.
For the CPO:
- Cultivate an open and transparent channel of communication with the CFO
- Speak the language of Finance
- Engage with the Finance team earlier in the strategy and goal setting process
- Look for innovative solutions to upscale procurement performance
- Agree on the procurement performance scorecard
- Clarify with finance the difference and relevance of differing savings measures
For the CFO:
- Integrate the CPO in the strategic planning process
- Set a regular cadence of Financial Reviews with the CPO
- Support and sponsor investments in solutions that enable procurement across the enterprise
- Collaborate with the CPO to develop a balanced approach to evaluate the procurement department’s performance
It is a great listen and offers real practical advice – I hope you find it useful.
If you’d like to hear our first podcast on the top 5 trends for Procurement in 2018 please click here