2. THE CIO, CPO AND CFO
How digital transformation leads to better procurement strategies and
financial results for the organization
3. THE CIO AND THE CPO
▫ If the CIO is to lead digital transformation across the organization, it must involve knowledge of the
strategies of every business unit, long-term business strategies of the organization.
▫ Optimization of the supply chain, organizational spend and sourcing strategies requires data visibility,
possible only through the CIO-CPO collaboration. Deloitte’s Global Chief Procurement Officer
Survey highlights 75% of CPOs believe in an increased role of procurement in delivering future
digital strategies.
▫ The CPO operates via a deep understanding of the needs of both customers and suppliers and guides
the sourcing of products to reduce costs and generate revenue. The CIO provides the technological
infrastructure to do so. The CPO understands what to source, from where and from who, for who. The
CIO fulfills the how.
▫ Digitalization of the organization paves way to use of advanced analytics in procurement, which
allows CPOs to provide data insights to facilitate more digital change. Spend management frees up
resources for investments in innovation and R&D.
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4. THE CIO AND THE CFO
▫ The 2019 CIO survey by Grant Thornton and the Technology Business Management (TBM) Council
explored the shift of the CIO’s role from “cost center” to a trust center, powering strategic initiatives
and driving financial performance.
▫ Delivering an innovative digital-led business strategy is no longer just the role of the CIO, but
involves the entire C-Suite.
▫ Grant Thornton reports that finance is one of the top challenges cited by CIO’s. Priority solutions to
transform the organization and mitigate risk range from investment in automation software to
cybersecurity technologies. The value addition to the organization from the IT spend especially
involves the CFO.
▫ EY’s report ‘How Private Company CFOs Can Use Data To Make A Difference’, the C-Suite has an
insatiable appetite for data insights from advanced analytics and the CFO is often charged with the
change. Synergies between the CIO-CFO can significantly improve the company’s strategic direction
with clear KPIs.
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5. THE CPO AND THE CFO
▫ Both the procurement and finance function are integrally connected by the mutual goal of cost savings
and revenue generation. The CPO’s influence over sourcing and the supply chain allows long-term
sustainable business strategies that deliver financial performance.
▫ Differences arise over performance measurement metrics. Procurement savings involve different
stages (identified, negotatiated/contracted and realised savings) while CFOs recognise only realised
savings, which can be reflected on the profit and loss statement. Using supplier invoices can resolve
the issue
▫ Spend analytics can give CPOs better visibility into all tiers of their supply chains and make informed
decisions resulting in lower disruption and compliance costs and sustainable sourcing. Spend analytics
also give CFOs a clear picture into spend and savings and help minimize unnecessary spending.
According to an article ‘CFO vs CPO: Bridging the Gap’, 5% -20% savings can be realised for each
pound brought under spend management, impacting EPS, operating profit and working capital.
▫ Tail spend management reduces risk from smaller unregulated suppliers and helps contribute to the
P&L by regulating the numerous trifle expenditures that add up to a large amount.
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6. BRINGING IT TOGETHER: CPO, CIO AND THE CFO
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All roads lead to profits: Financial growth can be optimized through greater synergies between the roles.