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Perspectives
Benefits of integrating procurement and finance operations
Explore the key benefits that integrating procurement and finance operations can bring to your organization. From improved cost savings and control to enhanced financial reporting and beyond, discover what’s possible through integration.
The integration challenge
The integration of procurement and finance operations refers to the alignment and coordination of activities between the procurement and finance departments within an organization. Although integration typically leads to improved overall operational efficiency, cost management, and financial control throughout the procurement process, in our experience, tight integration between procurement and finance operations is the exception rather than the norm.
Benefits of integratingmprocurement and finance operations
Why integrate procurement and finance operations?
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Organizational size and complexity
Larger organizations with diverse operations and multiple business units may find it more challenging to integrate procurement and finance operations. The complexity of managing functions across different regions, business lines, and subsidiaries can make integration impractical or less efficient.
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Organizational structure/functional ownership
Organizations may have separate departments or teams responsible for procurement and finance—with distinct reporting structures, goals, and processes. Integration would require significant restructuring, which could be challenging and disruptive.
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Functional expertise
Procurement and finance operations require different skill sets. Procurement teams typically focus on sourcing, category, vendor, and contract management, while finance teams deal with financial analysis, budgeting, and reporting. Separating these functions allows each team to specialize.
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Segregation of duties
Separating procurement and finance operations can help maintain a system of checks and balances within an organization—helping to prevent conflicts of interest, reduce risk of fraud, and ensure proper controls are in place.
Six key benefits of integration
Based on our experience and benchmarks, a more integrated, end-to-end, process-driven approach to procurement and finance operations can result in a 20% to 40% uplift in realized savings, a 10% to 30% improvement in operational efficiency/cost, and a better end-user experience. Below are six reasons to consider integration.
Ready to start the integration journey?
At Deloitte, we offer a range of support services for our clients—from finance and procurement operations services to application management services to information technology support, and more. Our business operations support services provide deep end-to-end finance and procurement process expertise, leveraging our 175+ years of experience serving clients globally. This includes source-to-pay, record-to-report, order-to-cash, tax, treasury, internal audit and controls, and more. Download our full report to learn how we can help you.
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