A Sector in Turmoil? Procurement in the Financial Services Industry Face a Range of Challenges
Categories: Procurement Commentary, Procurement Financials, Procurement Strategy & Planning | Tags: Sourcing and Categories
Remember to register for our webinar tomorrow titled A Sector in Turmoil? Challenges for Procurement in the Financial Services Industry, sponsored by the procurement software and solutions provider SciQuest. That’s this Thursday, May 8 from 9 to 10 am CDT (mid-afternoon of those of you in Western Europe). Along with SciQuest’s Lindsay Sloan, I’ll be looking at the issues and challenges for procurement in the sector and proposing some steps procurement professionals might want to consider.
As I was putting together the slides for this webinar and talking to friends who still worked in the sector, one thing that struck me was the sheer breadth of the challenges facing procurement.
At one extreme, parts of the industry are moving as fast as any business sector anywhere, with the emergence of digital, mobile, and social media technologies revolutionizing much of the financial service industry. Think of payday loan firms, where technology has legitimized what used to be a very niche element of the market. Or price comparison apps, or peer-to-peer lending propositions … Or even PayPal!
So how does procurement respond to that, when colleagues in business areas desperately want to work with small, innovative, dynamic suppliers or partners – often through non-traditional commercial vehicles? A six-month tendering process followed by the organization’s standard contract just isn’t going to cut the mustard.
Then, on the other hand, we have a legacy, more “utility” aspect to some of the financial services world, where regulation is strong and cost management is likely to be key. Here, procurement people may be faced with a different challenge – that of major, even monopoly suppliers, who may be tempted to treat them and the industry as cash cows. So smart procurement operators understand that this divergence of market situations means very different procurement strategies are needed in order to succeed in the sector.
I’ll be talking more on this and other interesting topics tomorrow. Hope to see some of you then!