How companies are bucking the trends.

• Author: Heffes, Ellen M.
• Position: RISK MANAGEMENT - Survey

Cost cutting has become the preeminent concern of chief financial officers worldwide--to such an extent that they are ignoring key risks in the supply chain and putting basic goals--such as increasing profitability--on the back burner.

These insights were uncovered in The Cost of Control, the result of a recent study of 550 CFOs worldwide by purchase-to-pay software provider Baseware in conjunction with the Kelley School of Business in Indianapolis.

According to the survey, there are critical areas of vulnerability that CFOs need to address.

Among the other key findings:

* CFOs say that cost cutting is the absolute priority 64 percent), while other critical goals are being ignored, including mitigating risk (39 percent), increasing profitability (37 percent) and following environmental practices (24 percent).

* There is a disconnect between the procurement and finance departments, with only 46 percent of CFOs viewing their procurement and finance functions as being integrated effectively.

* Despite cost-cutting concerns, 58 percent of indirect spending is still not being captured.

* Lack of automation. With only half of purchasing processes being automated, there is little visibility and room for human error.

Additionally, CFOs are underestimating the strategic value of purchasing and the supply chain to business performance.

Though approximately half of the CFOs consider that procurement is becoming more strategic, 36 percent still believe it's a largely administrative function and only about a quarter believe that it has a positive effect on profitability.

While the CFOs consider spend information...