The European Food & Beverage Market is in a state of turmoil. Increasingly regular headlines are being published around deficiencies in quality standards and growing contamination cases. The reputation and financial damage of these headlines can be critical for any business operating in an already tumultuous industry (as discussed in my previous post).
New research shows that a growing number of corporates are refocusing their procurement functions away from cost and towards strategic innovation. A sure sign that corporate management's attitudes towards procurement are shifting. (We discuss this further in our webinar). But are the smart ones just copying the companies that have always understood that this is a key source of value?
Any accountant will tell you that more businesses go bust in the recovery from a downturn than in the recession itself. A big reason for this is poor risk management – because managers think they can stop worrying. They can’t.
The Competition Commission and statutory audit – a lot of sense and sensibility – part 2
Our previous post discussed three of the seven remedies that the competition commission proposed as part of their ruling around statutory audit rotation. In this post, part two of this mini-series, Proxima's Richard James and Guy Strafford will look at the remaining four remedies and some key questions finance / procurement teams and audit committees should be asking when tendering this high profile service.
The Competition Commission and statutory audit – a lot of sense and sensibility – part 1
The verdict is in, judgement is pronounced.
The Competition Commission (CC) has delivered its final ruling on the market for statutory audit services in the UK, amending its remedies from the provisional ruling announced a couple of months back (here are our comments from July) and the reaction from the industry is generally positive.
Corporate virtualization - 100 years in the making
2013 marks 100 years since Henry Ford was faced with the dilemma of producing his latest invention, the Model T Ford, on a large scale - in an efficient, low cost way. His answer was to invent the first mass production assembly line. In doing so, Henry Ford revolutionized the world of manufacturing. Over the past 100 years, following this monumental milestone, business has changed beyond recognition.
Today's growth is fueled more by suppliers than internal staff
Today's definition of what a 'company' is varies dramatically from person to person, business to business and country to country. However, we can all agree that a company is no longer made up of just its people, its offices and its factories.
Infographic: Ever wondered about global business’ spend patterns?
Businesses around the world have been on a journey, whether deliberate or not, of cost externalization. A significant portion of any business’s revenues are now being spent outside their own organization. What was once a labor cost, is now a supplier invoice.
How suppliers have changed Dutch management practices
To better understand the implications and opportunities of our latest research into the spending habits (and subsequent management practices around these habits) of modern day Dutch businesses, we have compared labor and non-labor (supplier) costs across the Dutch AEX25 over a two year period.
So, after months of deliberation and consultation, the Competition Commission published its provisional decision on the remedies relating to the market for statutory audit services. But will this really achieve the CCs laudable objectives to improve quality and broaden the competitive market for statutory audit?
Audit tendering may not turn out as hoped without some market change
The FRC and Competition Commission are causing change in the audit market, and when combined with pressure from the corporate governance teams of the largest investors, there is now real impetus for change.
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).
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.
We recently hosted a webinar - discussing the findings of our latest research - The £10 billion profit opportunity - and their implications on business today. This post recaps the discussion and poses some thought prompters for what looks to be another turbulent 12 months ahead.
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 3): Who’s really responsible for cost management?
If you talk to a CFO about 'costs', you'll be listened to. It's clearly the CFOs area of responsibility. Yet if you talk about 'procurement' to a CFO, in most cases you will get very little air time. And yet, they're the same thing. How has this situation come about?
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.
Translating the benefits of procurement for internal stakeholders at BP (part 2)
The first part of our interview with Andrew Collopy [AC], Global Procurement Director, Downstream at BP concluded with a discussion around communicating the benefits of procurement internally and reducing stakeholder scepticism. Part two continues the internal validation conversation plus looks at how procurement can breakaway from it's typecast as a tactical buyer.
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.
Achieving higher ROI with fewer people at AXA insurance
Stephen Wills [SW], Director of Group Procurement at AXA Insurance discusses how strategic business partnering allowed AXA to achieve more savings as a ROI year-on-year, while reducing absolute head count.