This ‘challenger bank’ is one of the largest, with a fast-growing customer base and complexities driven principally by growth.
Challenge
The CPO was new in post and announced a wide-ranging commercial transformation to the executive team. The program would focus on modernizing the approach to procurement and supplier management, looking into all aspects of the operation.
The existing supplier management model was outdated, and the discipline itself was undervalued within the business. While a program existed, it was highly risk-centric, focussing on ~300 suppliers with little or no differentiation applied to the different types of suppliers and the services they provided. Compliance with standards was low and open to interpretation at a Business Unit level, creating a highly manual and fragmented approach and no enterprise-wide visibility.
Approach
As a leading procurement consultancy, we worked hard to offer our specialist advice. First off, we worked closely with the head of the Assurance function to conduct a rapid diagnostic to assess the pre-existing Supplier Management Framework (SMF) and understand future aspirations. We then looked into internal and external compliance, processes, reporting, and data. This gave us strong insights into the current situation and likely challenges to delivering and operationalizing a new fit-for-purpose SMF.
Following the assessment, our procurement consultants designed a new SMF, supporting tools, operating model design, and change plan supporting our client from design through implementation.
Results
The new SMF was designed around best practices in Financial Services. By using the Proxima toolkit, we were able to work closely and quickly with the leadership, creating a tailored set of activities for the bank and an easy-to-use segmentation tool for assessing new or pre-existing suppliers. The segmentation would enable Sourcing or Supplier Management to quickly understand the supplier classification and the in-life management approach and effort.
In designing the SMF around risk, performance, and value, we were able to create a more balanced and thoughtful approach to different types of suppliers. Moving from a pure risk-focused model allowed the bank to also identify and manage suppliers according to critical delivery commitments and the potential to collaborate and innovate.
Finally, we designed a set of enterprise-level dashboards that would report key supplier data, and highlight noncompliance to the SMF either internally or externally. The data collection was technology-enabled, allowing suppliers and stakeholders to input data into a central system with real-time calculations calibrating outcomes. This automated approach supported the creation of a lean operating model.
- > 1k suppliers in the program scope and > 300 segmented
- 32 business controls identified and deployed through segmentation
- 30 executive-level dashboard reports selected and deployed