It's not my fault. It wasnt me. Sound familiar? These are common excuses weve used since childhood. And while they may pass in many circumstances of private life, they dont often fly in the corporate world. Pointing the finger usually doesnt protect shareholder value nor avert corporate reputational damage.
With so much activity going on outside the direct control of an organization, it is in hindsight no surprise that there has been a reduction in the level of transparency of spending behaviors, and an increase in potential risks (both reputational and financial).
Ladbrokes Chief Procurement Officer bets on stakeholder management
Supplier relationships are obviously vital to a sound procurement strategy. But for Clive Rees, Chief Procurement Officer at betting giant Ladbrokes, keeping internal stakeholders close is just as important.
There are some strict rules about the scope and execution of statutory audit. Things undoubtedly got tougher for the profession in the wake of the Enron scandal that brought down its auditor, Andersen. But interestingly, while there are now stricter rules around auditor independence from management and limits on non-audit services an auditor can provide, many of the issues that scarred audit then still linger.
The world of audit is in a state of flux. For a start, the long-standing grumbles about the Big Four (Deloitte, E&Y, KPMG and PwC) dominance in the world of corporate auditing has resulted in debates about regulatory reform domestically and in Europe. Even the Competition Commission is getting in on the act.
"If you always do what you always did, you will always get what you always got" - Albert Einstein. Time and time again organizations launch into programs with the aim of reducing costs from the supplier base. It's a perfectly rational thing to do. Who wouldn't want to get the cost base in a fitter state?
Regulatory forces are the most obvious driver of change in financial services. There is no doubt that the Mortgage Market Review, Basel III, the Independent Commission on Banking, the Retail Distribution Review and other regulatory factors have added substantial cost and complexity to running bank operations.
Global myths of procurement outsourcing: Myth 4 - PO results in a loss of control and increased risk
This is often cited as a reason why people are reluctant to even consider procurement outsourcing. Yet it's an unfounded fear. As any CFO that has outsourced will tell you: control goes up. Risk comes down.
The changing nature of business (pt 5): Introducing the Profit Enhancement Index
We've already seen how non-labor costs are 4.8 times higher than labor costs. But our analysis of FTSE 350 data also reveals the potential enhancement to profitability that can be brought about by proportionally lower reductions to the non-labor cost base.
The changing nature of business (pt 4): Sources of profitability
Our research shows that in the FTSE-350, labour consumed on average 12.9% of revenue in 2011. In contrast, non-labour costs consumed 68.3% of revenue. The difference between these two percentages suggests that bringing non-labour and third-party costs under greater control represents an opportunity for leaders to make more meaningful improvements to their profits than the traditional focus on labour cost.
I've had numerous conversations with CPOs in my time who have said they are very proud of achieving a 10x, 20x, or even 30x ROI on their team cost. And research has claimed that world class procurement functions achieve a ROI twice as high as the average. But both of these measures are not only far too simplistic, they are misleading and are forcing the wrong behaviors in our business leaders. And here's why...
ING Direct: Refocusing on the core - a CFO perspective
Feike Brouwers (FB), former Chief Financial Officer for ING Direct discusses his role in bringing the distressed UK business back afloat during the financial crisis, Barclay's acquisition of ING Direct and how cost management is a top priority for all involved in financial services.
Surrounded by business closures, law suits and a plethora of compliance / regulations, many C-level executives have reprioritized risk mitigation and aversion tactics much higher up their agendas. Increasingly, given that virtually anyone in an organisation can purchase something, there is a growing need for procurement to get involved in big ticket items as well as educating stakeholders about the impact of risk on business objectives.