5 TOP TIPS - How to Increase Procurement Agility in Financial Services
Financial Service Institutions (FSIs) face an increasingly volatile business climate as lending profits dwindle and digital competition rises. As wellestablished institutions feel the everincreasing weight of regulation on their operations, newer banks entering the marketplace are not experiencing the same constraints. As FSI’s accelerate the adoption of technology to better serve their clients, they must improve their business agility to successfully enforce strict compliance standards. Procurement plays a key organizational role by ensuring compliance with Third Party Risk Management (TPRM) requirements, optimizing spend value, and leveraging a network of innovative suppliers. Further, to keep up with the pace of their growing business needs, procurement teams need to adopt and implement a digitized and agile FSI business model.
How can you stay agile and responsive as you navigate new sourcing and payment strategies while mitigating risk and supporting your financial institution’s longterm goals?
Agile procurement requires the right mix of technology, skills, supplier management strategy, and internal/external collaboration, especially with a constantly growing supplier base. Best-in-class FSI’s are already making significant changes to the way their procurement teams work with their organization to focus on business objectives and their stakeholders. By optimizing spend and gaining visibility and control over supplier and third-party risk, FSIs can accelerate digital business model adoption to improve agility.
So, where does your FSI fall in the procurement agility continuum?
These five scenarios and solutions illustrate how the power of an advanced procurement platform can deliver more value to improve responsiveness, speed, and agility.
Let’s see how your Source-to-Pay processes measure up and where you can improve your responsiveness and procurement agility
1 - How do you engage with innovative and forward-thinking suppliers who expect Agile Onboarding Processes?
Your Facilities Manager pitches a new supplier—a startup that will equip your retail banking branches with sensors to capture the multi-stage customer journey. The term “startup” is immediately met with apprehension as the supplier may not have completed the necessary upfront due diligence or hold specific certificate requirements.
Does your organization have an established startup onboarding process to effectively vet new suppliers that offer advanced solutions and customized capabilities? Are you able to create a digital innovation funnel for these suppliers and nurture a pool of suppliers without disrupting your business model?
TIP: Create multiple differentiated onboarding processes to work seamlessly among all types of suppliers, regions, and organizations. Establish a dedicated incubation flow for innovative suppliers, including an expedited alternative for startups.
Ivalua Solution: Supplier, Relationship Management
2 - How do you implement an Agile Contracting Process in a regulated yet continually evolving compliance environment?
A critical IT equipment provider suggests switching your current material purchasing contract to a more advanced and innovative leasing contract option. As a critical outsourcing agreement, you’re bound by stricter legal and financial constraints, creating a more complex contract modification process.
Can your current procurement process quickly compare contract options (buying/leasing) to trigger the necessary contractual validation/compliance steps?
TIP: Contract processes should evolve as regulation changes. Establish several pre-approved contract templates to easily switch between buying or leasing, and eventually negotiate and approve only specific clauses. Tie critical outsourcing agreements to specifically embedded assessment questionnaires and compliance approval flows. Ivalua Solution: Collaborative Authoring + CLM
3 - Is your ordering process keeping up with the pace of your business?
Your IT department has negotiated a competitive discount with your hardware provider —but these savings are only applicable if the order is received by the supplier before tomorrow.
Are you able to quickly mobilize resources and respond to the request, or are you burdened with a slow, manual order system? Is your order immediately linked to the agreement you negotiated or just an orphan request which will require manual reconciliation later on?
TIP: Your Procure-to-Pay process isn’t just a purchasing process, but an agile channel you can leverage to capture negotiated savings. Integrating your ordering process to your contract management system ensures contract accuracy, reduces risk, and improves business cycle time. Periodically review your business workflow efficiency to adapt to evolving business needs. Ivalua Solution: eProcurement
4 - Can your Invoice-to-Pay process strengthen your supplier relationship management?
Your IT department has engaged a skilled freelancer pool to develop and deliver a corporate credit application. Their terms require a payment within 10 days and your Accounts Payable team typically processes invoices on a deferred schedule.
Are you able to meet these expedited payment requests or will you risk losing these highly skilled experts?
TIP: Your Invoice-to-Pay process should reinforce your “customer of choice” position. Maximize invoice data capture, leverage next-day payment solutions to streamline lead times, and honor your accelerated payment commitments. Ivalua Solution: AP Automation + Next Day, Payment + Dynamic Discounting
5 - Do you have an Agile Third Party Risk Management (TPRM) system with actionable mitigation plans?
Your Marketing Director’s preferred event management supplier can’t deliver on a service that was contracted for a major corporate event. Their own supplier, which they had subcontracted the whole video systems to, is in financial distress. You’re under a critical timeline and need to find an alternative solution as soon as possible.
Are you able to anticipate direct supplier and sub-tier network supply disruption? Can your organization pivot and utilize operational mitigation plans to leverage alternate suppliers?
TIP: Mapping tier 1 supplier risk is the first step to understanding your organization’s supplier network. Secondly, it is crucial to maintain a 360-degree visibility into all the suppliers in your supply chain, including tier 2 and tier 3 suppliers. Manage your supplier portfolio with critical groups and build a repository of alternate providers for sensitive purchasing categories. To expand your alternate suppliers network connect your procurement software to an external, qualified supplier base and discover new suppliers on-demand. Ivalua Solution: Category, Management + Tealbook
Build a stronger foundation for future innovation–discover your digital financial services procurement solution with Ivalua. Ready to learn more? Contact us at ivalua.com
About Ivalua:
Ivalua is a leading provider of cloud-based Spend Management solutions. Our complete, unified platform empowers businesses to effectively manage all categories of spend and all suppliers, increasing profitability, lowering risk and improving employee productivity. Trusted by hundreds of the world’s most admired brands and recognized as a leader by Gartner and other analysts, Ivalua maintains the industry’s leading customer retention rate