How Procurement Can Bridge the Gap Between Finance and the Rest of the Business

Having worked in procurement for years, I’ve seen firsthand how decisions from finance—often made with the best of intentions—can ripple out and create unintended challenges for the business. When finance calls the shots in isolation, particularly in large-scale projects like ERP implementations, it can lead to inefficiencies, frustration, and even roadblocks that affect every department. But here’s where procurement can step up as a mediator, bridging the gap and ensuring that the business’s needs are met right alongside finance’s goals.

In this post, I’ll share how procurement can become an advocate for the business when working with finance, ensuring that both sides are aligned and that the company’s broader objectives are achieved.

Why Finance-Only Decisions Impact the Entire Business

Photo by Tima Miroshnichenko

It’s no secret that finance holds significant influence over company decisions. Their focus on budgeting, cost-saving, and compliance is crucial, but these goals don’t always align with the daily needs of other departments. Take ERP implementations, for example. While finance might prioritize a system based on budget constraints, that same decision can lead to a less flexible, less functional solution for other teams.

As procurement professionals, we see the impacts of these decisions across various departments:

• Procurement Teams: We often have to balance finance’s need to cut costs with our own focus on supplier quality and reliability. Cost-saving alone shouldn’t undermine supplier relationships, but finance sometimes prioritizes savings over long-term value.

• Operations and Supply Chain: Finance may cut budgets in ways that disrupt operational flow. In procurement, we understand that these restrictions can lead to bottlenecks, impacting everything from production timelines to customer deliveries.

• IT and Data Management: Finance may choose ERP systems with lower licensing fees, but without understanding the system requirements of IT, this often results in underpowered solutions that IT struggles to maintain.

• End Users Across Departments: From sales to customer service, teams can feel the effects of finance-first ERP implementations that don’t fully support user needs, resulting in workarounds and reduced productivity.

How Procurement Can Step In as an Advocate

Procurement has a unique advantage here: we’re used to seeing the business as our client, and we approach finance with the bigger picture in mind. Our work isn’t just about cutting costs; it’s about adding value, building relationships, and creating efficiencies that benefit the entire organization. Here’s how we, as procurement professionals, can help steer finance toward outcomes that support the whole business:

1. Bring Cross-Departmental Perspectives to the Table Early
   When finance leads ERP implementations or other large initiatives, procurement should be involved early to advocate for the needs of operations, IT, HR, and other stakeholders. By acting as a mediator, we can ensure that the chosen solution is balanced—meeting finance’s budget while supporting the workflow requirements of each department.

2. Highlight the Business Benefits of Holistic ERP Systems
   Procurement professionals understand that ERPs shouldn’t just be about financial tracking; they’re tools that should enhance productivity and streamline operations across the business. We can advocate for systems that support user efficiency and seamless integration. According to research, ERP projects that incorporate input from multiple departments see 30% greater system utilization, which translates into long-term ROI.

3. Use Data to Drive Balanced Decisions
   Procurement often uses a mix of financial and operational data to make decisions. We can encourage finance to look at metrics beyond dollars—such as operational KPIs and employee satisfaction scores—to ensure ERP decisions have a positive impact on the entire organization. This approach not only drives efficiency but also helps finance see the value in aligning their goals with those of the business.

4. Support Flexible Budgeting
   Procurement can introduce finance to budgeting approaches that allow for more agility, such as rolling forecasts or zero-based budgeting. This flexibility helps other departments adapt to changing needs and gives procurement room to negotiate with suppliers in ways that create longer-term value, not just immediate cost savings.

Why This Approach Benefits Everyone

Photo by Kindel Media

When finance takes procurement’s input seriously, it benefits the entire organization. Here’s why:

• Improved Operational Efficiency: Cross-functional input leads to more efficient ERP systems and procurement strategies that streamline processes for everyone, not just finance.

• Better Supplier Relationships: Procurement can balance cost savings with the need for quality, helping finance understand the value of strategic partnerships that support long-term success.

• Higher Employee Satisfaction: When employees feel that their needs are considered in company-wide decisions, they’re more likely to engage fully with the ERP system, which reduces workarounds and boosts productivity.

• Stronger Cross-Departmental Collaboration: By involving various stakeholders, finance creates a collaborative culture that reinforces trust and aligns everyone toward the company’s broader goals.

Conclusion: Building a Finance-Procurement Partnership for Success

As procurement professionals, we have an important role to play in ensuring that finance’s decisions are aligned with the needs of the broader business. By stepping up as advocates for our colleagues in operations, IT, HR, and beyond, we can help finance make decisions that benefit the entire organization. The result? ERP systems, procurement policies, and budgeting decisions create efficiencies, foster collaboration, and support sustainable growth for everyone.

We’d love to hear from you! Have you worked with finance on projects like ERP implementations, or felt the impact of finance-driven decisions on your team? If you’re in finance, were there any insights here that could help in creating a more collaborative approach with other departments? 

Share your experiences or any questions in the comments below—your perspective might just inspire others in similar roles! Let’s start a conversation on how we can build a more inclusive, effective decision-making process across departments.