Procurement Collaboration, Resilience, Technology, and Sustainability

How can your organisation be ready for the future of procure-to-pay (P2P)? In a recent Nordic Leaders Circle discussion, procurement and finance leaders from all the Nordic countries, and from various industries and backgrounds, discussed automation, analytics, sustainability, and the strategic role of procurement. Read for a quick recap and then head on over to view the session on-demand.

Finance and procurement leaders from Finland, Sweden, Norway, Denmark and Iceland all joined virtually to discuss the evolution of collaboration between finance and procurement; procurement’s main contribution to their businesses; and how to leverage technology to create resilience, ensue sustainability and improve agility.

Speakers included:

  • Frida Oddsdottir, Director of Procurement & QA, Nordic Choice Hotels

  • Wilbert Baerwaldt, Director of Procurement and Value Chain, Duni Group

  • Christian Homen, CFO, Ahsell

  • Allan Jensen, VP Global Procurement,

  • Yaron Nadbornik, Group CPO (VP of Sourcing as a Service), Realia Group

  • Magnus Bergfors, Global Business Director, Basware

  • Peter Nyman, Journalist and TV host

Evolution of Collaboration between Finance & Procurement

First the group discussed how they experience the collaboration between the Finance and Procurement roles at their organisations. Here are the key takeaways:

  • Procurement has gone from a back-office task to a strategic contributor.

  • Collaboration can only be done successfully if there is a teamwork mentality established with Finance. 

  • The pandemic has impacted the collaboration journey and has actually accelerated it

  • Ongoing dialogue between Finance and Procurement is critical, especially since over the last 12 months, prices have risen tremendously across supply chains due to supplier inconsistencies and disruption in general.

  • Finance and procurement should be seen as twins, not as a parent-child relationship.

  • Though both departments have different functions, different purposes, and different processes, they very often link in many ways and help each other strategically in the long run.

  • Securing supplies is the number one priority for many right now. It's very much about a “supply and stabilise” mentality with supply chain for the time being.

  • All material prices have increased by 20-30% which eats into the  margins dramatically. So, of course, there is a high interest from both procurement and finance just to understand where we are heading, what the future looks like, and how to ensure success.

  • Practicing poor procurement doesn’t just mean that you're not accumulating cost savings, it also means you're bringing a lot of work to the entire organisation and getting a lot of unhappy customers. So, it  really need to be a fine-tuned relationship and procurement can be a very strategic initiative for any company that wants to look into the future.

Finance and Procurement and the impact of COVID

As felt around the world (even still today) COVID sent shockwaves through all organisations in all geographies and industries. So, we wanted to see how these Finance and Procurement executives are dealing with the repercussions of the virus’ impact. Here’s a few notable takeaways from this part of the discussion:

  • Risk evaluations will definitely be more top of mind.

  • Supplier evaluation will be an absolute necessity going forward. And it won’t just be about cost and value, it will focus on risk assessment, locality, competitors, etc.

  • There will then be a need to better train teams to take part and effectively screen suppliers without overdoing the risk evaluation for the sake of maintaining positive supplier relations.

Leveraging technology to raise the stakes

Technology has been advancing at a colossal scale. But some people aren’t as willing to adopt it as others are. But when it comes to growing your business, increasing efficiency across the organisation, and keeping up with competitors and peers, the best way to do that is by investing and adopting business technologies. Here’s some thoughts from the panel:

  • Leveraging technology allows both procurement and finance to raise the game.

  • It’s not about replacing people, it’s about automating basic, recurring tasks to free up time to allow teams to focus on more collaborative aspects.

  • Technology increases visibility by providing the data to drive better analytics which inform growth strategies and decision-making.

  • Technologies make it to where you’re more prepared if your business is hit with something unexpected (for example, a global pandemic.)

  • Technology provides companies the ability to improve procurement practices by analysing historic data and powering forecasting tools.

  • For many, it’s a mindset problem – major pushbacks come from those who are uncomfortable with change.

Sustainability – Top of mind for all businesses

Notably in the Nordics, sustainability is top of mind. And why shouldn’t it be? Why throw something away that could have  been recycled? Why use a textile or product that is incapable of breaking down naturally? The panel had the following to say about this hot topic:

  • There is a lot of legislatures around sustainability that varies from country to country. So, it’s a challenging hunt for strategic procurement to find the right suppliers while also supporting the right and legal legislature.

  • Product managers are forever (?) under scrupulous watch to create sustainable products.

  • The average payback time when it comes to a sustainability initiative within your business is 2-3 years.

  • Sustainability and procurement are a match made in heaven.

  • “Change” comes in again here as people are afraid of adopting processes and technologies which eliminate paper and therefore contribute to decreased CO2 emissions. They may think “We’ve always done it this way.” But that doesn’t mean the old way is best, nor does it mean it’s helping the environment in any way.

  • Processes must improve to contribute positively to sustainability.

  • If your business can automate some of the basic tasks, have better analytics, and locate more sustainable suppliers (all which automation help with), then you’ll not only have better financing, but also a better brand image. And in the end, when a consumer feels good about what they’re buying, that improves your sales.

Hear the full discussion!

To hear to the full discussion, listen to the full round-table discussion on demand here.