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Procurement Needs CFO Attention to Improve Processes, Mitigate Risk

Finance chiefs and procurement officers must collaborate on strategic initiati

CFOs have long been charged with managing risk in their enterprises, but that typically involved activities such as performing due diligence for corporate investments and M&As. Now, those in the corporate accounting community are also turning attention to the procurement function in their organizations and how they can contribute to strategic decision making.

In the past few years, natural disasters, political turmoil, economic concerns and labor issues have all threatened to disrupt the supply chain, which can negatively impact a company's bottom line. As a result, the procurement department and the finance division will need to work together more closely.

As executive editor and contributor Jason Busch writes for Spend Matters, procurement officers will need to make a business case rooted in objective data and strategy to attract the attention of CFOs. "While CFOs like to see themselves as strategic, their training and background is almost always transactional and tactical, which is precisely why it's critical to invest the time to train and educate CFOs on the strategic aspects of procurement and the supply chain," he writes.

There is an opportunity for finance chiefs and procurement officials to collaborate on a more strategic approach to supply chain management and procurement initiatives. The two parties simply need to find a way to communicate and find a common ground.