If you have been working under the assumption that digital transformation will solve all of your problems and catapult your company into leadership status, consider this: an email with an invoice attached to it is “digital.” That invoice still has to be manually sent, received and entered into another system for approval and payment. Despite being digital, this invoicing process is labor intensive, risky and inefficient. Hardly transformative, is it?
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Procurement and supply chain professionals understand the importance of establishing and maintaining strategic supplier relationships. These critical partnerships form the basis for innovation, competitive advantage and customer retention, but they may also play a role in supply chain risk management.
A company’s ability to effectively manage risk has always been affected by how they perceive it. Seeing risk as all bad - as something to be feared - will lead to higher costs and lost opportunities. Too much tolerance of risk, on the other hand, can prevent growth, jeopardize customer/shareholder value and lead to brand damage. Striking the right balance requires procurement to combine the unique advantages of human intellect and technology.
That brings us to the story of “MC robotics”, a fictional, multi-national engineering company that produces robots for automating discrete and process manufacturing. By spending a typical day with their procurement and supply chain team, we see how risk management and supplier relationship management go hand in hand.
In a continuation of our discussion with Corcentric EVP and CFO Mark Joyce, we leave our focus on how the CFO role has changed in the digital age and we pick up the very popular topic of how finance and procurement can work together better.
While procurement is accustomed to thinking of finance as something of a brick wall, there is nothing to be defensive about in this CFO conversation. With data and analytics at the foundation of most corporate roles today, all corporate functions have a lot more in common than they realize, including a shared desire to impact as many parts of the organization as possible.
In Mark’s own words…
"Regardless of where procurement reports, their objective should be the same, which is to ensure the goods and/or services an organization is investing in or acquiring meet their requirements. In a collaborative organization, it shouldn’t matter where procurement reports, because everybody should be involved at the appropriate level and share ideas and work towards common objectives.”
In addition to the fact that, as CFO, Mark characterizes most spend as “investment”, in other words, of strategic importance to the enterprise, he discusses an interesting perspective on total cost of ownership that is not to be missed: what does it cost the company to make a change – whether in response to positive or negative conditions.
In the second part of our discussion with Mark, he addresses:
- How the prevalence of “as-a-service” contracts has changed the way companies measure the value of their contracts.
- How procurement’s role and priorities may be different in long term planning situations v. more straightforward, shorter term decisions.
- The importance of making sure a company is prepared to act upon what they have set out as their chosen strategy.
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In a recently released article and podcast about the evolving role of the CFO, McKinsey & Co. partner Ankur Agrawal and consultant Priyanka Prakash shine an interesting light on enterprise-wide change management in the digital age — from the perspective of finance. Of particular note are the number and range of corporate functions reporting into finance today, and how that shifting scope of responsibilities can stress a CFO’s bandwidth while also increasing their net impact.
To gain perspective on these changes, we spoke with Corcentric EVP and Chief Finance Officer (CFO) Mark Joyce. He has been in his current position for nearly 13 years, and in that time he has had ample opportunities to observe the changing expectations of the CFO role. At the same time, he has been supporting the company’s growth journey while acting upon his unique vision for the future of finance.
Today’s strategic CFOs aren’t nearly as focused on “the pennies” as they used to be. Instead, their time is spent analytically leveraging the company’s data resources, learning from people at all levels of the organization, and ensuring that the operational focus of the enterprise is aligned with the opportunities that exist in the marketplace.
In this discussion, Mark will answer questions such as:
- How is the role of the CFO changing, and what impact is that change having on the rest of the C-suite?
- How can a CFO bring their personal vision to bear on finance and on the enterprise while also ensuring that finance as a whole delivers what is needed of them?
- Given the increased role of long term strategy and planning in finance, where can CFOs go to nurture and develop innovative ideas?
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