Organizations need to continually innovate with new products and services, but the siloed business processes of the procurement, finance, and operations functions can undermine those efforts.
Here’s how a typical siloed process operates: An investment to support growth and enhance service often begins with operations, which is tasked with building a case that the investment will yield a sufficient return. However, operations will typically submit their funding request without full insight into the pressures on the procurement and finance functions.
If operations succeeds in justifying the investment, it moves to finance, which must consider the broader implications of the business decision and weigh the likely return from this project against others vying for funding. Finance relies on the pitch from operations regarding the need for this product or service, and the legwork of finding a source/vendor typically falls outside the finance function and with procurement.
Once the project gets the green light from finance, the next stop is procurement, which is tasked with finding the right vendor and the right price.
- The challenges of siloed decision-making, including purchases that meet the requirements of an RFP but fail to consider things such as the need for additional support/training or the varying requirements of different locations.
- The importance of CFOs in leading the charge to get all three departments working together to save the organization money, drive efficiency, and communicate the big picture.
- The benefits of breaking down the silos and encouraging collaboration among operations, finance, and procurement, including more agile decision-making driving a greater ROI.
- The role of technology in developing an unsiloed approach to business that provides a better return on any investment.
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