Information is abundant on the impact of supply chain finance (SCF) on all stakeholders: buyers, suppliers, finance providers, and intermediaries. The source of such documentation is normally the "supply" side (i.e., banks, software vendors, and consulting firms). Very little is known directly from the mouth of the "demand" side (i.e., the companies, either buyers or suppliers) about what supply chain finance means to them. New research from Aite Group in its report, Supply Chain Finance: The Corporate Perspective, addresses this and determines what companies need when it comes to SCF and what financiers and other market players can do to meet this need.
Aite Group found that the majority of companies in Asia and Europe do not yet have a standard definition for SCF. Yet, despite the lack of a standard definition, the vast majority of companies do have a SCF strategy in place. In addition, finance departments remain the "usual suspects" to bolster SCF programs.
It was also evident that SCF mitigates risk for a company by ensuring the necessary business continuity with suppliers that are financially supported. This financial support comes from banks which act as the essential resource for corporate SCF, though they must break internal organizational barriers to fully deliver value to their corporate clients.
IT is also known to be a necessary support to well-run SCF programs, but adoption of IT solutions is equally split between those who have already implemented an IT solution and those still reluctant or undecided.
"We've seen that for SCF to succeed, it must not be a treasury-only initiative," says Enrico Camerinelli, senior analyst in Wholesale Banking at Aite Group. "Other departments—namely logistics, IT, and procurement—must be involved. Companies must aim to implement SCF programs, not only to optimize their working capital and operations efficiency, but also to offer trade partners financial relief or better payment conditions."
Aite Group
Aite Group found that the majority of companies in Asia and Europe do not yet have a standard definition for SCF. Yet, despite the lack of a standard definition, the vast majority of companies do have a SCF strategy in place. In addition, finance departments remain the "usual suspects" to bolster SCF programs.
It was also evident that SCF mitigates risk for a company by ensuring the necessary business continuity with suppliers that are financially supported. This financial support comes from banks which act as the essential resource for corporate SCF, though they must break internal organizational barriers to fully deliver value to their corporate clients.
IT is also known to be a necessary support to well-run SCF programs, but adoption of IT solutions is equally split between those who have already implemented an IT solution and those still reluctant or undecided.
"We've seen that for SCF to succeed, it must not be a treasury-only initiative," says Enrico Camerinelli, senior analyst in Wholesale Banking at Aite Group. "Other departments—namely logistics, IT, and procurement—must be involved. Companies must aim to implement SCF programs, not only to optimize their working capital and operations efficiency, but also to offer trade partners financial relief or better payment conditions."
Aite Group
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