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.

“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.”