Member Question:

I'm establishing my own suggested goals for a company performance-based bonus based on my work as the Procurement Manager for a manufacturing division; we're running Epicor Vantage ERP software to manage the business.

Houston, Texas

My Answer:

The following is an excerpt from an article I wrote on January 31, 2008 that should serve has a cautionary beacon to any purchasing professional contemplating the establishment of performance metrics.

Bridging the Communications Gap Between Finance and Purchasing

A May 4th, 2006 article titled How to Speak Like a CFO stressed that "Too often, finance executives in Corporate America simply don't believe that purchasing departments are really bringing in the savings they claim. That may be because finance and purchasing don't speak the same language."

For example, the finance department isn't interested in cost avoidance. They are interested in hard cost savings. This is perhaps one of the main reasons why a recent study revealed that ...

A May 4th, 2006 article titled How to Speak Like a CFO, stressed that "Too often, finance executives in Corporate America simply don't believe that purchasing departments are really bringing in the savings they claim. That may be because finance and purchasing don't speak the same language."

A December 20, 2007 article shows that very little has changed as "Procurement executives continue to have issues getting on the Chief Financial Officer's agenda, leaving procurement's expansive transformation incomplete."

The Finacial Forum has been created within the CATA Supply (Chain) Practices Hub as a means of bridging this "communication gap."

And since the "language" of finance is the dialect of business, this forum will empower procurement professionals in a way that will open the doors to greater understanding, and opportunity.

In this inaugural post, we will highlight the five financial terms listed in the December 2007 article, with which purchasing executives should become familiar.

In the days ...