The new, interconnected nature of CPOs and CFOs

Historically, CFOs and chief procurement officers (CPOs) tended to talk in different terms. Finance chiefs would focus on P&Ls, while procurement leaders would tout multi-year value creation. But today, they may be speaking the same language—from rethinking supply chains to delivering on ESG commitments.

According to the Deloitte 2023 Global Chief Procurement Officer Survey, top-performing procurement teams excel at being “orchestrators of value.” Such functions succeed by ensuring all partners and suppliers are playing off the same “score”—especially given the unprecedented levels of supply chain disruption, increasing challenge of growing revenue, and constant mitigation of inflation and risk.

But connecting with the business on more than a tactical level has been a longtime goal for many procurement leaders. Some CPOs are working to measure and communicate their function’s value proposition to finance, demonstrating how the team supports the organization’s strategic aims. How can procurement be recognized as a value-generating internal function instead of a cost center? Well, CPOs may be able to find common ground with CFOs by reinforcing how procurement can help the company outperform its competitors.

And if procurement can enable finance executives to make better-informed decisions, it can not only elevate the function but also demonstrate its higher-value impact.

Typically, procurement officers only communicate with their finance chiefs about how to quantify the value delivered from strategic sourcing. However, there are compelling reasons for CPOs and CFOs to meet more regularly. Bringing together the perspectives of finance and procurement can allow both parties to address issues like implementing AI, and analyzing supply base synergies associated with possible M&A deals. As more of the two function’s priorities overlap, CFOs and CPOs will need to make sure they get—and stay—aligned on what constitutes savings and monitoring initiatives.

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