Next week sees the coming together of minds from the financial services sector with discussions set to focus on risk, technology and talent.
Procurement in the financial services sector is facing some serious challenges. Leading minds are meeting next week in New York to discuss these and share their thoughts on how best to overcome them.
Boosting their influence, keeping a lid on risk and bringing the right talent into the function are just some of those challenges and here we begin the discussion with some initial thoughts.
Getting a seat at the table
Procurement functions in the financial services sector are on average at least half the size of those in other industries, according to a recent Procurement Leaders study. Clearly, this creates an immediate barrier to achieving influence in the business, before you even get to talking about strategic direction and value, on which – according to the same research – financial services teams fall behind, also.
For Steve Hrubala, global head of procurement & strategic sourcing at private equity firm The Carlyle Group, it’s a question of talent. "Stakeholders aren’t used to engaging with sourcing and procurement. The onus is on us as a function to show them the value," he explained.
For this, he said, "talented multi-taskers, with a diverse background and aptitude for strategic management" are the answer.
Supplier risk & outsourcing
Maintaining a tight grip on supplier risk has always been something that will be top of mind for procurement executives in financial services sector and it will be no different going forward.
"Regulators are placing a greater focus on the subcontracting space. They are asking who our vendors are doing business with and, specifically, whether those vendors are touching customer data or intellectual property," explained Michael Beck, VP, head of procurement and vendor management at Hudson City Savings Bank, in an interview with Procurement Leaders.
For Beck, though, the real challenge is keeping a handle on risk, but doing so at the same time as ensuring you’re partnering with the right firm for the business. "You have to balance it", he said. "We don’t keep the risk stuff separate from the innovation and the satisfaction stuff...when [suppliers] do business with us, we’re going to take a holistic approach to the relationship." He explained that this has meant combining risk, performance, financial health and innovation measures into a single data set.
The team at Singapore bank DBS are taking this challenge head on by adopting tactics used in the BBC show, Dragon’s Den. CPO Donna Trowbridge explained the innovative process: "Potential suppliers are required to provide details of their background, their organisation and the products they offer.
"Once we have all of that information, if we believe the product or service is of interest, they then have 15 minutes to convince us. It cuts through so much sales stuff that you don’t need to listen to. Without wasting time, we make sure that we don’t miss out on that one gem of an idea that could transform our business."
Technology
Leveraging disruptive technologies for efficiency gains: quite a big nut to crack, but one no-less worthy of the endeavour. Big data has given buyers the tools to develop a deeper understanding of the markets in which they’re active, but properly harnessing that data doesn’t simply mean having it – you have to integrate it in a way that develops understanding, insight and intelligence that’s relevant to the function and ultimately the wider business.
Communicating that insight is the next problem. As much as those accessing the data need the technical ability to be able to gather and analyse it, CPOs again need talented professionals on their side with the ability to engage with stakeholders in a way that’s meaningful to them. This, as well as ensuring alignment with risk, innovation and revenue considerations, is what successful use of technology looks like.
The Industry Intelligence Channel for financial services is a new intelligence and collaboration service dedicated to your unique, sector-specific procurement challenges. This new channel provides deep category and strategy expertise, market intelligence and analysis designed to inform planning and best practice for those in the FS sector.
For existing Procurement Leaders members interested in this service, contact Joanna Nightingale at: j.nightingale@procurementleaders.com
For non-Procurement Leaders members, contact Andrew Deakin at:a.deakin@procurementleaders.com
This article is a piece of independent writing by a member of Procurement Leaders’ content team.
from Procurement Leaders Blog http://ift.tt/1dOknvI
This content was assembled for you by the YQ Matrix platform
The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.
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