How can CFOs help realise global cost savings from the procure to pay process?
In this series of blogs we examine the role of the procure to pay process within an organisation’s cost control initiatives and take a look at best practice techniques and technologies that can help increase the chances of success.
Increasingly competitive global markets combined with the economic uncertainty have impacted the profitability of businesses everywhere, so the need for on-going cost reduction has never been greater. Whatever type of business you’re in, and whatever its size or location, you’ll probably be familiar with the mantra of ‘doing more with less’.
However, in trying to do more with less, it is often the CFO and the finance team who bear the brunt of inconsistent and sometimes ill-considered cost saving initiatives. They face a battery of operational challenges:
- How to best manage cost reduction initiatives.
- How to discover hidden spend.
- How to correct budget overruns.
Couple these with fragmented IT systems, inconsistent reporting infrastructures, and disconnected data silos it’s not hard to see how these issues can lead to a scenario where a CFO, unable to get a consistent, accurate view of global costs, risks making critical decisions based on inaccurate or incomplete information.
Creating a global culture that embraces visible cost control can give a CFO the vision to see where the business can make and maintain significant cost savings. And one of the key tools used by organisations today to keep these costs visible and under control is an effective procure to pay system. After payroll, the purchase of goods and services that support business operations is often the biggest source of costs in organisations today. And it is usually one of the hardest to control.
Whilst the finance team may not be directly responsible for global procurement processes, we’d argue that they ought to be intimately involved. After all, it is the CFO and his or her finance team who carry ultimate responsibility for prudent cost control and financial insight. Crucially, they also ‘own’ the core finance system – often the lynchpin of any successful business operation.
In this series of blogs we’ll be sharing ideas on how the CFO and the finance team help to improve cost control via implementing a standardised global procure to pay process. We’ll also take a look at the Invenio’s Procure to Pay solution – designed with this purpose in mind. Built on SAP technology, it enables finance teams to incorporate the entire global P2P process within a corporate SAP finance system. There are many advantages in this approach – and we’ll examine all of these, one by one, so that you can understand why, and how, a fully integrated P2P solution, driven by finance, will help you do more with less.
In our next blog we’ll take a closer look at the challenges that arise for the finance team through having multiple processes and software systems in a global procurement function. We’ll also take a look at how these can be simply and easily addressed by implementing a corporate standard solution across all offices worldwide – and the kinds of savings this will enable you to make.