Attending a recent summit for CFOs, it was clear that a number of items on their worry-list were the same as those of procurement chiefs and there were areas where supply chain professionals could help.
Risk, unsurprisingly, was a huge topic for discussion, with supply chain disruption, vendor failure and planning for unforeseen events among the areas for attention.
So, too, was balancing the need for compliance and risk mitigation against the need to be bold and innovative. As one CFO put it, once you’ve identified all the dangers, you must determine which you want to try to mitigate and which you’re willing to take with your eyes open. Another finance director said: “Being a growth CFO means you have to support some bold ideas. Put some boundaries around it and just go for it – at least you won’t have to regret not having tried.”
In fact, in the tips on entrepreneurship, Daniel Priestley says those that “don’t think big enough should be punished”.
Procurement is all too aware of hazards, with the recent horse meat debacle simply the latest example (see risk round-up). Like CFOs, procurement chiefs have to ensure compliance to regulations and rules or face reputational, as well as financial, damage. See the article on corporation tax, plus what to do if your company discovers bribery has occurred somewhere in its ranks.
CPOs also have to take chances – after all being innovative is to do something new. Some are doing this by showing they can make money for their companies, as well as save it. This comes in a variety of forms: from helping sales teams boost their negotiating skills and bringing in supplier innovation to actually selling to providers. In doing so, these procurement chiefs and teams are putting their own reputation, or that of their department’s, on the line to show how they can add value.
Some organisations will have done this for a while, but this new ground is an area in which more CPOs are daring to tread.
Meanwhile, life, sadly, does not appear to be imitating art in procurement. Our feature on a new business novel sees a CEO recognise the huge contribution procurement can make, while our Undercover CPO says his experience recently was quite the opposite.
Striking the balance between preventing risk and taking calculated chances that help your businesses grow should reverse this.
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