Procurement Professional is the official publication of CIPS Australasia

CFO-CPO relationship still 'work in progress'

11 Dec 2009

Source: SupplyManagement.com, 10 December 2009

Finance chiefs have a narrow view of what procurement departments can achieve, research by Aberdeen Group found.

A survey of 176 global finance professionals and buyers revealed that purchasing departments are measured only on how much they can save. CFOs said their four main key performance indicators for procurement cover price-reduction achievements and the cost-effectiveness of running the department.

“Despite an ability to drive value and execute against a wide range of business objectives, deviations on savings measurements are basically the only metrics used by the CFO to measure the performance of the CPO,” the report said.

It added that there was a “save first, ask questions later” attitude among finance executives, which meant that 32 per cent of those questioned do not formally measure the accuracy of procurement savings.

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