Procurecon takes a look at procurement in Financial Services

Procurement in the Financial Services sector really took off in the 1990s. The de-regulation that opened up the industry and created a more dynamic and competitive landscape also brought a greater focus on cost, and procurement began to be taken seriously. High profile leaders were appointed – Stuart Humby and Les Mosco at NatWest, Toby Broome at Barclays, Ian Taylor at Halifax.

I did my stint in the industry at NatWest from 1997 up till 2000, when we were bought by RBS. But I’ve observed the industry with interest ever since, watching the fluctuations as procurement would become stronger, then be knocked back again ,usually when the good times in the sector took the focus off cost control for a year or two!

Recent events haven’t been good for anyone in banking certainly – I suspect some of my old friends and colleagues, despite the fact they’re in procurement not investment banking, probably keep fairly quiet about their job when they’re down the pub.  But in some ways, while the current environment is challenging, it brings opportunities for the procurement the function to take further steps to being seen as truly important and strategic in the sector.

So ProcureCon’s decision to hold their first ever Financial Services event in September looks to be very timely indeed.  ProcureCon have been around some time as a conference producer, but they seem to be on a bit of a roll at the moment, branching out into new sectors like their successful Pharma event earlier this year, and I have heard good reports of their recent events from my US colleagues.

The conference is being held in London on September 26th / 27th and you can get more details about it here.   Duncan Brock, now CIPS Customer Relationship Director, but at one stage in his career CPO of Royal Sun Alliance, the insurance firm, is chairing the event.  Looking at the agenda, there are good, senior level practitioners speaking - some names I recognise, some I don’t, but all appear to be genuinely senior people, which is a good sign.

There’s a strong focus on IT, which is not surprising as it is THE most important spend area for most financial services organisations. You only have to look at the recent problems in NatWest to see just why technology is so critical – it is the foundation these days for most financial services businesses. And if we look at the real innovators in the sector over the last 20 years – First Direct, Direct Line, Hargreaves Lansdowne – technology has been at the heart of their innovative customer offerings.

So making the right procurement contribution in this category is vital. But, in many Financial Services organisations,  procurement doesn’t operate with a very strong mandate. The function and individuals within it have to prove and demonstrate their worth to internal stakeholders. That means  showing that they can really add value, whether in market analysis, negotiation and contracting, or contract and supplier management (an increasingly key area). The ProcureCon agenda looks like there will be some interesting experiences shared that should help practitioners in the sector gain and maintain that internal credibility.

We’ll come back in part 2 and take a look at some other particular areas of interest for Financial Services procurement shortly.

 

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