Procurement Excellence in the Banking & Insurance Industry


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With tumultuous economic times, banking and insurance companies look more into bottom line cost savings. Procure to pay optimization across key procurement spend categories can drive sustainable savings, from sourcing and contract compliance to dynamic discounting and working capital management strategies.

Attend this session to hear how banking and insurance companies have achieved procure to pay excellence.

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  •  About Union Bank. Highlight size of business. Key procurement spend categories. Spend Volume & Amount. Metrics are great! Explain how the procurement is organized (centralized, reporting to CFO etc..). Do direct and indirect procurement report under the same leadership or is it different.
  • Procurement Excellence in the Banking & Insurance Industry

    1. 1. #AribaLIVE Financial Services Industry Track – Ariba LIVE 2014 Tuesday, March 18 Yaletown 3 © 2014 Ariba – an SAP company. All rights reserved.
    2. 2. 3:00 PM – 3:15 PM Welcome – Ariba Live Financial Services Track Overview Mike Cowles, COO, Financial Services, SAP 3:15 PM – 4:15 PM Panel Discussion - Procurement Excellence in Financial Services Industry Moderated by Andy Eagle, Manager, Solution consulting, SAP Cloud James McDonald Director of Procurement Operations for ING Tony Orlando, Vice President of Accounts Payable and Procurement Operations (P2P), Union Bank Roy Anderson, Executive VP, Procurement Services, MetaProcure 4:15 PM – 4:45 PM Networking Break 4:45 PM – 5:00 PM Innovation Showcase – Financial Services Industry 5:00 PM – 6:00 PM Industry Roundtable for Financial Services 6:00 PM – 7:15PM Financial Services Networking Reception Financial Services Resources Industry Track Tuesday, March 18, Ariba LIVE 2014 © 2014 Ariba – an SAP company. All rights reserved.2
    3. 3. Introducing Financial Services Customer Panelists © 2014 Ariba – an SAP company. All rights reserved.3 James McDonald Director of Procurement Operations for ING Tony Orlando Vice President of Accounts Payable and Procurement Operations (P2P) Roy Anderson Executive Vice President
    4. 4. #AribaLIVE ING James McDonald Director of Procurement Operations for ING © 2014 Ariba – an SAP company. All rights reserved. @ariba
    5. 5. FINANCIAL SERVICES PANEL James McDonald, Director – Procurement Operations, ING U.S. © 2014 Ariba – an SAP company. All rights reserved.5
    6. 6. ING U.S. Background • Procurement/Finance structure • Centralized Procurement • Decentralized buying • Centralized Accounts Payable (AP), Atlanta, GA • Systems • Ariba Buyer (Invoicing) 9r1 • Ariba Network (330 active supplier relationships) • PeopleSoft Financials (AP, GL) 9.1 6 • Our company • Vision to be America’s Retirement Company • To become Voya Financial beginning in April 2014 (NYSE: VOYA) • 7,000 employees • $850M total spend, $500M PO spend © 2014 Ariba – an SAP company. All rights reserved.
    7. 7. Key Areas Driving Strategy Capturing controllable spend on PO Integrating PO and Invoice processes Electronic invoicing/ Straight-through- processing Establishing standardized P2P policies and processes by expense type Building governance over P2P process in decentralized buying model © 2014 Ariba – an SAP company. All rights reserved.7
    8. 8. Procurement Strategy 8 Goal Solution Solution details Establish P2P standardized processes/policy “Procurement Guide” All controllable spend requires PO • Comprehensive listing of all expense types with associated process and tool referenced • Invoices without PO for a controllable expense type were rejected and PO forced to be entered and approved prior to resubmitting invoice Capturing spend on PO Straight-through- processing Ariba Buyer - AP policy for PO invoices Ariba Invoice eInvoicing Non-PO processing • ImplementedAriba Buyer to capture all spend to begin consolidating spend onto one platform with associated workflow controls. • Greater visibility of spend both in process and reporting to assist Sourcing • Embracing the “1:many” low-maintenance integration to Ariba Network (over 330 active suppliers) • Distributed Keying via Ariba eForm © 2014 Ariba – an SAP company. All rights reserved.
    9. 9. Procurement Strategy 9 Goal Solution Solution details Build governance Procurement Operations • P2P process and technology owner ensures “somebody watching the shop” at all times • Focus is on the customers’ needs and satisfaction - #1 metric is customer satisfaction • Build compliance through education and awareness • Manage supplier enablement campaigns to increase eInvoicing and Pcard suppliers • Manage Pcard program and all Ariba enhancement requests and issues Enhance value PCard Manage compliance • $65M program, over 62K transactions/yr • Various solutions include Ariba-embedded ghost cards and single-use accounts • Drive compliance through “awareness campaigns” and active reporting © 2014 Ariba – an SAP company. All rights reserved.
    10. 10. Key Achievements • Significant FTE reduction/redeployment • Early pay discounts capability • PCard rebate revenue • Procurement policy compliance Cost Savings © 2014 Ariba – an SAP company. All rights reserved.10
    11. 11. Key Achievements Results # Electronic straight through invoices 78% Active AN-e-Invoicing suppliers 330 Invoices converted to Pcard 58% Invoices per AP FTE 15,000 • Receipt-to-approve days: automated workflow via e-procurement • Invoices per full-time staff: touch-free e-invoices Process efficiency Best Practices • Use PO and e-invoicing • Align AP with Procurement • PCard 2011 Innovation Award recipients (JPMC) 11 © 2014 Ariba – an SAP company. All rights reserved.
    12. 12. Lessons Learned/Key Insights • Ensure strategy drives efforts and resource allocation Make eInvoicing and AP automation a priority – Identify strategic goals; build into employee objectives Look to redeploy processors as automation enablers – Ariba Network enablement, PCard growth Aggressively manage compliance – Mandated training – Compliance KPIs 12 © 2014 Ariba – an SAP company. All rights reserved.
    13. 13. Future Plans • Improve reporting Data Warehouse reporting • Continue efficiency and value efforts Continue Ariba Network campaigns Implement Ariba ICS Dynamic discounting Utilize Ariba Value Realization to optimize use of Ariba 13 © 2014 Ariba – an SAP company. All rights reserved.
    14. 14. #AribaLIVE Tony Orlando Vice President of Accounts Payable and Procurement Operations (P2P), Union Bank © 2014 Ariba – an SAP company. All rights reserved. @ariba
    15. 15. • Headquartered in San Francisco, UnionBanCal Corporation is a financial holding company with assets of $105.9 billion at December 31, 2013. Its primary subsidiary, Union Bank, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. The bank operates 415 retail branches in California, Washington and Oregon. The bank operates commercial branches in Dallas, Houston, Atlanta, New York and Chicago, as well as two international offices. Union Bank, N.A., is a full-service commercial bank, providing a broad mix of financial services to businesses and individuals • Among the bank's markets are consumer, small business, middle market, real estate, corporate, correspondent, and trade finance • The bank also offers investment and financial management, trust services, private banking, insurance services, and global custody services • HighMark® Capital Management is the bank's investment management subsidiary • UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world's largest financial organizations. Customers have access to more than 600 Union Bank ATMs and 425,000 Star® and MasterCard® ATMs throughout the U.S., as well as over 1.7 million MasterCard ATMs worldwide © 2014 Ariba – an SAP company. All rights reserved.15
    16. 16. #AribaLIVE Roy Anderson Executive Vice President, Procurement Services, MetaProcure © 2014 Ariba – an SAP company. All rights reserved. @ariba
    17. 17. Internal Change Management – Lessons for Financial Services Roy Anderson
    18. 18. So little money!
    19. 19. The Transformation RoadmapLong term businessplans Decision PointSupplierRisk M anagem ent SupplierInnovation SupplierCollaboration StrategicSourcing RFP Purchase OrderInvoice 3 years 2.5 years 2 years 1.5 Years 1 year 180 days 90 days 30 days 30 days late The transactional spaceThe next generation strategic space Internal Team Focus
    20. 20. Moat Builders Moat builders 20 Not in my job description Not make here Winner take all
    21. 21. Give Credit to everyone It is amazing what you can accomplish if you do not care who gets the credit. Harry S. Truman 21 Credit you give yourself is not worth having. Irving Thalberg
    22. 22. Change Enablers Leadership Team Internal Rotation Industry Expertise Leadership Organization /Infrastructure Center led Category expertise Analytics OGSM Staffing / Personnel Development Clear Vision and Mission Individual development plans Organized internal and external training program
    23. 23. Organization, Process and Technology Organization Strategy Alignment with Corporate Strategy and Objectives Vision and Goal Setting Resource Plan with Job Descriptions Organizational Design Skills Assessment Development Plan & Training Recruiting Plan Individual Performance Metrics Processes and Tools Spend & Opportunity Assessment Toolkit Strategic Sourcing Toolkit Supplier Development Toolkit
    24. 24. Process Design What key processes will the “new” procurement organization include? Category Management Sourcing Execution Transactional Procurement Supplier & Contract Management In Source Strategic Skills Business Unit integration Out Source Transactions Technology One off transactional work Aggregation drives value *Sourcing Interest Group (SIG) Procurement Transformation on the Fast Track: Doing More with Less, February, 2010 Denali Group John Evans Managing Partner, Alpar Kamber Partner
    25. 25. Internal Team Build cross-enterprise executive relationships Current Goals and Objectives 3-year plans Integration of Supplier strategy Build spend teams to drive cross department savings Activate Procurement steering committee Supplier Relationship Management Integration with LOB goals and objectives Long-term savings development Optimization of core supplier base Dynamic Scorecarding with defined goals and objectives
    26. 26. Roy Anderson EVP Procurement Services 678-218-1627 Twitter: @procureguyvp
    27. 27. Questions for Our Panelists © 2014 Ariba – an SAP company. All rights reserved.27