It may not be obvious from the outside how procurement in the financial services sector innovates, but, when you get a panel of some of the industry’s leading procurement chiefs together, it quickly becomes clear that they are pushing the boundaries.
At Procurement Leaders’ Financial Services Executive Briefing in Boston, Michael Lofgren, CPO at BMO Harris Bank, Meghan Truchan, director of procurement at Bain Capital, Kenny Cheung, CPO at The World Bank, and Steve Hrubala, global head of procurement and strategic sourcing at The Carlyle Group talked about how they are innovating in each of their own ways in organisations that have long been considered traditional.
For Bain Capital’s Megan Truchan it has been about taking lessons from previous roles and adapting them to Bain. This has included setting up lunch and learn sessions for the team headed up by experts in different fields, such as bitcoin and other cryptocurrencies, in order for them to learn about new trends and how they will impact the function.
Truchan also explained how she is bringing suppliers into strategic conversations earlier than ever before in order to extract as much knowledge from them as possible.
“Our suppliers supply other companies in the industry,” she said.
“That knowledge and insight is really valuable.”
This idea came from time she spent at Boeing where she said suppliers would come in and more or less “live” with the company for a number of years.
But, she warned, they have to be the right suppliers. The supply base has to be segmented in the right way and only strategic suppliers be engaged with.
For BMO Harris Bank’s Michael Lofgren innovation only really happens when “things are interesting”. Interesting things happen in procurement, he said, and so he is trying to reinforce that across the business and engage with other functions to help find solutions to challenges.
He knew he was on the right track when his CIO said to him that procurement was both “important and interesting”.
For Cheung at The World Bank meanwhile, it has been about innovating in terms of risk, a lesson he took from his time as executive director and global co-chief procurement officer at Goldman Sachs. He explained that by focusing on minimising risk, it has allowed business leaders to focus their attention on other areas and not have to worry about it.
This, he said, has helped move the conversation away from cost savings and has highlighted just what the function can do.
The financial services sector may not be well known for its innovation, but clearly it is now thinking differently and showcasing exactly what the function can do and the value it can add outside of simple cost savings.
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This article is a piece of independent writing by a member of Procurement Leaders’ content team.