How do you explain the importance of Procurement to a CFO or CEO?

O’er on Spend Matters UK, the public defender does a great job of figuring out how we would explain Procurement to a (hyper-intelligent) alien race who has no concept of what it is or why it is needed in his post on back to procurement basics – explaining to an alien, which is a must read, but I don’t think that would ever be a problem.

Any alien race smart enough to build and pilot spaceships that can exceed the speed of light and traverse vast distances to get from where they are to where we are in a lifespan would obviously be smart enough to understand why beings of lesser intellect have to specialize to do well, and that these beings of lesser intellect would have to work together, and come up with a system (the corporate world) to allow that, as flawed as it may be. They’d get it.

Our real problem is explaining the importance of Procurement to an old-school CEO who still thinks success is all about sales (and marketing to pave the way) and a CFO who thinks success is all about cost control, especially internal, and trying to pay peanuts rather than wages and rates that would incentivize someone to success.

I challenge the public defender to come up with an explanation that an average old-school CEO who only ever studied operations and came up through (Sales or Marketing) Management or traditional Finance would not only understand, but understand to the point that he (let’s face reality, these narrow-minded CEOs are usually male) would embrace Procurement and the value-based vision we run off of.

Bonus points if it changes the viewpoint of someone who graduated Trump University.

One thought on “How do you explain the importance of Procurement to a CFO or CEO?

  1. Serge Milman

    There is an easy way to demonstrate importance of Procurement — show it.

    Let Procurement prove that it can deliver bottom-line value; not just in ‘paper’ savings but savings that are realized on the P&L.

    Let Procurement show that it can add material value — savings in excess of 15% vendor spend.

    Let Procurement show that it can deliver by encouraging spend compliance, collaboratively working to support innovation within business units, proactively ensuring vendor compliance, among other factors.

    Reply

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