A study conducted by Harvard Business Review Analytic Services (HBRAS), commissioned by procure-to-pay provider Basware, highlighted that businesses worldwide lack transparency in their supply chains.

The majority of business leaders surveyed (60%) warned that poor visibility of who they do business with is a significant source of risk. Nearly a quarter (24%) admitted failing to effectively evaluate supplier business practices.

Despite placing importance on ethical considerations, the most common factors for evaluating supplier remained economic with 60% of respondents citing ‘value for money’ and 54% citing cost savings as their top criteria.

While the majority (59%) of those surveyed said they expect their finance and accounting arms to drive a culture of transparency, respondents cited technical, organisational, and cultural barriers to fully realising the benefits of that openness.

Commenting on the findings, Basware chief executive Klaus Andersen said: “That so many organisations lack the ability to effectively monitor who they do business with is a significant cause for concern.

“Chief executives are right to be worried about the reputational and commercial implications of blind-spots across their supply chain. This report finds that visibility of the flow of money, goods and services is a defining characteristic of successful businesses.

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“This means taking responsibility for not only the quality of goods and services, but also the manner in which they are produced. We define this as Visible Commerce – having full transparency which allows you to make better, more responsible decisions.”