Why CPOs & CFOs Must Unlock AI’s Potential

The roles of Chief Procurement Officers (CPOs) and Chief Financial Officers (CFOs) are evolving rapidly. Traditionally, their focus areas differed significantly, with CPOs seeking continuous cost-cutting opportunities and CFOs aiming for strategic top- and bottom-line growth.

Today, experts describe a ‘poly-crisis’ affecting businesses. Uncertainty surrounds interest rates, inflation, and geopolitical unrest, and these factors have combined to encourage the CPO and CFO roles to converge.

The roles’ common goals now include driving profitable growth and multiplying margins. They must also proactively manage supplier risk and performance.

Joining forces to counter external pressures

Both roles are at the forefront of digital transformation, being tasked with unlocking the power of AI – and their scope is broadening to drive change, innovation, and new strategies.

These efforts aim to sustain growth and competitive advantage amidst macroeconomic uncertainties, with the challenges too complex for any single business function to overcome alone.

This is seeing CPOs and CFOs joining forces to counter external pressures – leveraging their expertise to drive profitable growth and make margins multiply amid geopolitical conflicts, energy crises. All of these factors affect daily business operations, and form the backdrop against which company leaders strive to meet sales and revenue targets.

A Coupa CFO survey reveals that 90% of CFOs and finance leaders worry about hitting these targets within 6-12 months. 60% are extremely or very concerned.

For businesses to thrive, leaders must act swiftly on data-driven decisions. Key strategic initiatives relate to cost savings and operational efficiencies. Procurement leaders must identify areas for margin improvement. They need to adapt spend strategies to changing market conditions and improve operations.

Now more than ever there is an urgent need for visibility into what is being spent, control over where and how spend occurs and also for agility, to adapt spending decisions to changing market conditions.

The focus of both roles is to break down silos across the organisation – this includes silos of different spend (direct, indirect and services) and silos across the sourcing and procurement process, including supply chain, third-party risk, sourcing, contracting, invoicing, payments, expenses and treasury.

A unified view helps procurement leaders better manage spend to overcome supply issues and optimise the buying power of goods and services. Increased spend visibility also helps finance teams better manage working capital and budgets.

Driving digital transformation and unlocking the power of AI

Procurement has long been a strategic extension of finance for certain areas of business, through tools like advanced analytics and supplier relationships which help find savings that may not appear apparent to others.

However, the rapid expansion of AI-driven insights, which now power tools such as spend analysis, risk management and predictive analysis means businesses, with the right skill sets and operations, can use the technology to quickly drive an efficiency multiplier, support business growth and scale in a cost-efficient way. While supporting more real-time, proactive decisions across the business.

AI in particular is an area where CPOs and CFOs are undertaking tasks to understand its best usage and build confidence in it. This was revealed in Coupa's CFO survey: THE STRATEGIC CFO: Rebuilding Confidence and Unlocking the Potential of AI. While there is some hesitation about how it can be implemented, 100% of finance leaders believe generative AI can provide value to their organisation. 

Many highlight areas like fraud detection and workflow optimisation as where generative AI (Gen AI) will provide a strategic advantage. The same survey highlights how CFOs are AI hungry, but hesitant. While leaders raised concerns around trust, or their ability to use the technology.

In spite of these apprehensions, many leaders in finances believe in the potential of AI to reshape their business. While nearly one in two (45%) plan to invest in AI to drive growth, 39% say their biggest obstacle will be keeping up with AI advancements. However, the dance with AI is already underway.

100% of finance leaders say they're currently using AI to cut costs and increase productivity across different business areas.

Supplier risk and performance

Technology can be a powerful tool for proactively managing supplier risk and performance.

Tools such as supplier onboarding, collaboration and management are crucial to ensuring business continuity and supply chain resilience, while ESG compliance, fraud and cybersecurity risk require constant vigilance coupled with proactive, actionable insights.

CFOs and CPOs want to anticipate shortages and disruptions to be more proactive and protect margins. Both teams want to be more strategic about suppliers and increase supplier collaboration to maximise supplier quality, performance and compliance.

Sustainability and supplier diversity are becoming increasingly important to employees, customers and regulators. Neglecting ESG considerations can lead to higher employee turnover, customer pushback, damage to the brand, fines from regulators and missed competitive advantage, so both personas are invested in onboarding the right suppliers and being able to monitor and report on their performance and risk.

AI: an aid, not a replacement

AI is everywhere, with most days, new tools and solutions being announced as the software, programme or item needed to raise your operations to the next level. But CPOs and CFOs should ask themselves if these are the right tools to implement into our daily business. Leaders should ask themselves if the AI aligns with the business strategy, supporting certain objectives, from profitability to fraud detection. It is about clearly understanding AI's role in driving growth and acting as a margin multiplier.

Does the business have the quality or quantity of data, which is correct, up-to-date and relevant in the sector the business is operating in? Without this, AI is not going to be as beneficial as it possibly could be.

Will it enhance the business? AI should assist in optimising operations, uncovering issues and automating tasks. The CPO and the CFO should consider the specific AI tools and how they will help them achieve their goals. Remember, AI is not a replacement, it is an aid.

Businesses must ensure their security is a top priority, with data protection a crucial tool in implementing best practices, such as risk assessments, multi-stakeholder reviews and regular testing.

Finally, as mentioned earlier, build trust with the technology. Speak with the team to understand and acknowledge the concerns raised, but show a path forward to overcome this. 

Then, embed the AI into everyday processes and make sure that success stories are shared across the business. Plus, use user-friendly tools that can be easily implemented and show immediate benefits, such as Coupa, which has AI at the heart of its operations.

How Coupa can help

Coupa, known for its ability to make margins multiply, uses AI tools to improve business performance and ability to be more efficient and productive.

The business has been showing off AI innovations throughout 2024, aiding companies and making it even easier for employees to do their jobs – freeing them up to work on those higher-value initiatives, helps businesses navigate complex business issues for finance, procurement and supply chain leaders.

Coupa's offerings can become valuable resources to CPOs and CFOs, such as its comprehensive AI models with vast, rich data spanning all aspects of spend management to uncover insights and patterns that solutions with a narrow focus would miss. This translates to reduced errors upstream, such as in matching purchase orders to invoices.

Domain-specific training allows Coupa's AI models to learn the nuances and complexities unique to S2P processes, leading to more accurate and relevant predictions and recommendations.

Coupa Navi, is the GenAI-based personal agent, Navi supercharges productivity, up-levelling how customers interact with the Coupa platform by finding document status and approvals faster, accelerating requests and serving as an always-available knowledge base for instant answers to questions.

Contract Intelligence: Powered by new AI enhancements, it provides users with risk-informed clause recommendations, helping reduce exposure to potential issues. New enhancements also provide GenAI-generated legal agreement summaries, giving users important context, whether from third-party contracts or negotiations.

"Today's complex and dynamic operating environment has placed enormous pressure on traditional business models and approaches," says Leagh Turner, Coupa CEO.

"CEOs and CFOs are struggling to grow their organisations efficiently and effectively and their margins are eroding at unprecedented rates.

"Coupa enables a margin multiplier effect for our customers. Our platform is powered by community-generated AI, across a network of millions of buyers and suppliers and more than six trillion dollars in transactional data. This data serves as the pulse of the global economy and helps guide our customers to make smarter decisions that create durable and sustainable growth."

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