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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.
Omer Abdullah is Chief Commercial Officer and Co-founder for The Smart Cube. He works with Procurement and Strategy leaders at global organisations, transforming their teams to become value-driven and insight-led. Omer has more than 30 years of management consulting and global corporate and industry experience across North America, Europe, and Asia. His prior roles include A.T. Kearney (North America), Warner Lambert (USA), and The Perrier Group (Asia-Pacific). Omer has an MBA from the University of Michigan at Ann Arbor, USA, and a BBA from the University of East Asia.