How do you know if your finance organization stuck in the past? If you hear mutters of “what contract?” and “wrong version!” as your team and your procurement organization slogs through spreadsheets and emails, that’s a pretty good sign it’s time to modernize your processes.
Despite gaining greater visibility and control of sales while improving precision in managing revenue models, many finance organizations are still largely stuck in the 1990s when it comes to day-to-day procurement operations. Most of the enterprise has changed significantly along with the drumbeat of digital transformation (see: CRM systems for Sales or HCM tools for HR), but finance’s back office often remains left behind. Traditional ERPs are seen as “good enough,” and procurement needs are an afterthought, if addressed at all.
Forward-Thinking Business Impact Strategies of the Modern CFO
Today’s transformational CFO is turning that perception on its head and elevating procurement (and especially sourcing) as true drivers of impact for the bottom line. Recently, Ventana Research published a new report, Bottom-Line Impact: How the Modern CFO Leverages Sourcing and Procurement, in which they found that nine out of 10 organizations believe their finance organizations should play a more strategic role in the company.
In order to accomplish this, the entirety of the Finance team (which includes procurement) must be armed with the right technology to masterfully do their jobs. Digital transformation is about working more effectively and efficiently, but it is also about increasing agility, collaboration, and transparency throughout the business. According to the Ventana report, “Any transformation process begins with a critical gap analysis: what does sourcing and procurement do now versus what it should be doing?”
Finance and Procurement’s Roadmap for Digital Transformation in 2020
Earlier versions of sourcing and procurement were tactical. They focused on processing orders and establishing a rudimentary level of controls. Today, with automated software supporting sourcing and supplier engagement, in particular, the function can become vastly more effective and efficient by adding clarity, accountability, collaboration, accumulated knowledge and fast, streamlined workflows.
Such a transformation not only makes procurement faster and more responsive, it changes the way procurement is done. Rather than acting as gatekeepers and fulfillment managers, procurement easily collaborates with stakeholders and suppliers to realize deeper value and cultivate strategic relationships that result in better products, services, faster production, enhanced support, and even wholly new ideas for offerings.
According to the Ventana report, “Digitally transformed sourcing and procurement departments can play a more active, productive role across the entire company.” Additionally, attaining a new model for goal-driven cost savings creates a tangible benefit that goes directly to a company’s bottom line.
It’s Time for Finance and Procurement to Step Up
As other parts of the enterprise become more proactive, responsive, and agile, finance cannot afford to be left behind. The Ventana report clearly shows that finance has an opportunity to elevate its position and contribute substantially more to the company. Starting with appropriate software for procurement and sourcing, finance can begin a phased approach to digital transformation that will produce significant beneficial impact to the bottom line.
Ready to hit the ground running? Get started by reading Ventana’s Bottom-Line Impact: How the Modern CFO Leverages Sourcing and Procurement report. The report clearly outlines some key areas for initial focus. Add it to your summer reading list to gain more insight and kickstart a movement to propel finance from the 1990s into today’s era of business that is fast, nimble and innovative.