What really matters to the CFO – The CFO's expectations towards the procurement function

In over 80 percent of companies, the Chief Financial Officer (CFO) represents the procurement function on the management board – more than enough reason to place the central stakeholder of procurement at the center of this study. Particularly in times of increasingly volatile economic cycles, the demands on a CFO change for the areas assigned to him. But what does this mean in concrete terms for procurement managers? How satisfied are CFOs with the current level of professionalism in procurement? What improvements are expected from digitization in procurement and what controlling information does a CFO really need?

Answering these central questions is the starting point for this year's Horváth & Partners procurement study. We looked at CFO satisfaction with the procurement department's performance from different perspectives. In addition, the study provides an assessment of the prerequisites that must be created for the digitization of procurement and the processes that have the greatest digitization potential. Furthermore, we examined which information a modern procurement reporting should contain from the CFO's point of view and in which reporting cycles these should ideally be made available. The study concludes with a look at risk management in procurement – here we evaluated which risk categories should be considered for effective risk management in the supply chain.

Overview of some of the key results:

  • In general, the CFO is satisfied with procurement (78 percent) – but progress is needed, especially regarding the role of driving innovation and meeting saving targets
  • 50 percent of CFOs are not satisfied with the status quo of procurement reporting
  • For CFOs, information on P&L-effective and non-P&L-effective savings is one of the central requirements for procurement reporting
  • 93 percent see digitization as a key lever for increasing process efficiency
  • The greatest potential for digitization is expected above all in operational procurement processes and in procurement controlling
  • From the CFO's perspective personnel reduction is not the primary goal of digitization initiatives in procurement
  • 85 percent consider logistics and inventories to be the most important risk category in procurement
  • 64 percent of risk categories in procurement are currently not sufficiently taken into account
Order Study