As mentioned yesterday, today marks a new direction for Whitepaper Wednesday as I introduce two new authors. Today’s installment is written by Jeff Dean, SPSM. Please help me welcome Jeff as a new contributor to the Purchasing Certification Blog!
Welcome to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I will be reviewing a whitepaper entitled “Profiles in Expense Management: The right balance between control and empowerment at mid-size companies” from cfo.com.
This is a large whitepaper that discusses many key points relative to purchasing and finance such as economic prospects, cost controls, tracking and analyzing spend patterns (and the difficulties associated with) and employee compliance with procedures relating to these subjects to name a few.
The most interesting thing about this whitepaper is that it was published in March 2006 after extensive research from CFO Research Services with companies like Pepsi Americas, Cigna and Massachusetts Institute of Technology (MIT). The 353 individual survey respondents were mostly CFO’s, but also included Controllers, VP of finance and CEO’s as well as a mix of finance executives (CEO, EVP or SVP of finance, and directors of finance). Fifty-two percent of surveyed companies revenues were under $250 million. It is interesting to look back on what items these folks thought were going to be a focus and where the focus shifted after the major economy upheaval of the last few years happened.
The first part of this whitepaper goes into detail about the research program and parameters and the “sustained economic optimism” for businesses. Interestingly, at the time of this report “94% of respondents in the construction and real estate industries foresee economic growth, as do more than three-quarters of their peers in the retail and wholesale industries.” The whitepaper continues on how the finance department will take an even more substantial role in running today’s businesses, great news for those of us in the purchasing field!
Another one of the other interesting points that are made is that these companies will be “focused on keeping their workforces productive and engaged, not on cutting back on headcount and benefits.” From my perspective, we have actually seen the exact opposite. In my position and that of some of my close peers, we are expected to do more and expand our job duties and cutback on headcount.
The paper then shifts to indirect spend and brings up some very important topics for purchasing and finance folks. Tracking and analyzing spend patterns was ranked as “very or extremely important” to those surveyed. As we learn through our experience and certifications, we need to track and analyze many different sources of spend (depending on what kind of business we work for) to not only prove the value of the purchasing department, but to also look at where our leaks are, and how to fix them.
The next subject, compliance, is very near and dear to me. It discusses how important compliance is in reference to policies and procedures for your company. In the companies surveyed, 87% agree that employees are “complying with policies mandated for spending” but do require constant oversight by the finance department. I don’t want to ruin the read for you, but there are very interesting details in this section, if, like me, compliance is important to you and your organization.
In conclusion, I thought that this report was lengthy, but worth the read. It is interesting to look back at a report of how we thought things would have been, how they ended up and how some things stay important no matter the economic conditions. Here is a link for the article and it may require you to sign up to the site: http://www.cfo.com/whitepapers/index.cfm/download/10339483.
– Jeff Dean, SPSM