The smooth flow of financial data between suppliers and buyers quietly underpins global trade. From ordering a taxi to renewing an option on wheat grain, we each have the power to change the world for better or worse with the push of a button.
Finance leads the way in achieving a culture of transparency
The finance and procurement teams we support here at Basware are on the front line of a global drive to achieve consistent corporate values right across the purchasing supply chain. In fact, 60% of the 780 organizations we surveyed for a report in partnership with Harvard Business Review Analytic Services (HBRAS) expect their finance team to lead the way in establishing a business culture of transparency.
This demand for greater visibility is being driven by company leaders wanting to understand the truth behind their transactions. For CEOs and CFOs, one clear advantage lies in the promise of significant cost savings, with a quarter of our survey respondents anticipating this as an outcome and over a third (36%) putting the cost reduction potential within their organisation at over 10%.
“Businesses really compete at the supply chain level,” says Guillaume Roels, Timken Chaired Professor of Global Technology and Innovation at INSEAD. “You need to find ways to capture the savings and to share the benefits with your supply chain partners.”
Transactional transparency is more than a cost savings tactic
Over half of businesses in the HBRAS report, “Using Transparency to Enhance Reputation and Manage Business Risk,” cite ethical and commercial considerations as key drivers of corporate investment in transactional transparency.
Those working toward total visibility of the flow of money, goods, and services are more effective, strategic decision makers, while those that have invested in improving visibility across finance and procurement benefit from greater employee engagement, improved reputation, and revenue growth.
Conversely, a lack of visibility across the supply chain (and the associated reputational risk) is recognized as a grave concern for Chief Executives and CFOs. When a change in its supply chain found Kentucky Fried Chicken (KFC) restaurants suddenly without chicken, hundreds of stores were forced to close, leading to severe loss of earnings and a dip in share price. With a clear view of its entire supply chain, KFC may have been able to spot the potential point of failure in their supply chain and mitigate the problem.
Increasingly, leaders are turning to their finance teams to explore the untapped potential of data led insights and unlock the unrealized value that a better grasp of their operations could provide. But while a third of survey respondents say they have automated finance and procurement processes to increase transparency across the business, more than 60% of respondents say that a lack of visibility into their suppliers’ practices is a significant risk management issue. And many say they lack the tools to evaluate or monitor those vendors.
Implement automation to drive transparency
The business world thrives on transparency. At a time when raw materials and components, manufacturers, and consumers are increasingly geographically dispersed, maintaining visibility throughout the supply chain is more important than ever—and more difficult. From the opportunity to simplify operations, spend smarter, and do more, automation of finance and procurement empowers businesses to move forward with confidence.
Download the HBRAS report
To learn more, download our report, “Using Transparency to Enhance Reputation and Manage Business Risk,” and get a closer look at how an elite group of financial leaders are using transparency to mitigate risk, create business value and hone their competitive edge.