Creating An Alliance Between Procurement & Finance

Written by EO Executives on Oct 12, 2016

The Finance and Procurement relationship is arguably one of the most controversial  within any organisation, as it is one of the most integrated and yet most distant. Executives Online recently surveyed over 300 senior industry leaders finding that only 20% of CPOs and CFOs felt the two functions were aligned on key business initiatives. 

To understand this interesting relationship further our team reached out to our strong network of senior leaders and invited them to participate in our thought leadership webinar

The webinar proved to be a great platform for insightful discussion around how Procurement and Finance can get better aligned. Specifically focusing on aligning on people, processes, technology and communication. 


It is interesting to understand where Procurement sits within many organisational structures and where many individuals think it should. The survey showed that only 36% of CPO's report into Finance within their business but 76% of CFO's feel Procurement should report into them.

Depending on the organisation, the reporting structure will vary but it is still important for both functions to meet on a regular basis. Juliet Sotnick, CPO at Babcock, outlined that reporting into the CEO provides a platform for clear alignment. Meeting on a regular basis and working closely with Finance ensures business requirements are taken on board, and allows for good overall engagement with Finance.

Our guest panelists also stressed that alignment is fundamental for having a common set of shared objectives. So, if the current reporting structure isn't right, businesses need to make that change to ensure alignment throughout all functions.              


What became clear was how important it is for both functions to outline key strategic objectives and establish a 'baseline' before any process starts. CFO,Raymond Leclercq, expressed that implementing a shared goal and set of objectives is critical. After all, misalignment often occurs when people have a different perspective of what the starting point is. 

However, for the two functions to really align they must truly understand each other, and so it is essential for all parties to understand the benefits of educating one another on their function. As Juliet Sotnick stated, Finance can be Procurements closest ally. 


Technology can unite Finance and Procurement on a number of business initiatives. For example, it can be used to create a central database for both functions to analyse data, and have the same baseline understanding. Sharing a central contract database can also create alignment on terms and conditions, so both functions can understand when contracts are up for renewal. 


In any situation communication is a given but how well individuals communicate can be the make or break. If communication isn't clear and objectives aren't outlined then it is inevitable that desired outcomes are not going to be achieved. 

For Finance and Procurement to really align on communication, meeting on a regular basis to review key objectives is highly beneficial. Holding regular meetings provides a valuable opportunity for both functions to understand priorities and diminish any initial uncertainty. In many cases misalignment is caused when problems are not communicated up-front, emails are sent back and forth and assumptions are made. 

The simplest way to align through communication is by making a conscious effort to talk and build relationships based on social interactions, rather than emails. 

Raymond Leclercq- " It is better to over communicate than under communicate."

What Next?

The webinar has shown there are many factors that contribute to successful Finance and Procurement alignment. If the current reporting structure isn't working, then businesses need to make that change and move the relationship forward. If we take away one thing, I think it is crucial to remember the importance of communication. Remember to take a pro-active approach and address issues and misunderstandings upfront. 

If you're looking to establish a culture of alignment in your business, why not listen to the webinar for some detailed discussion on getting better aligned?

Alternatively, drop me an email at. or if you would like a confidential discussion call me on 01962 89331. 


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