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Interview with Vince Gautheron – Supply Chain Lead – Legal Services, RBS

ProcurementRecruitment
Procurement

Vince Gautheron is Supply Chain Lead at the Royal Bank of Scotland. Here, he discusses the challenges of working in Banking, ways to measure success and gives tips on how to rapidly progress your Procurement career.

 

During my years studying Politics and Economics at Manchester University, I read a paper that concluded by asking its post-graduate audience whether they would like a career in Procurement. Nobody said they would, simply because no one knew much about Procurement. People don’t go to university thinking, ‘I’m going to be a Procurement Director in 15 years.’ They usually decide to follow the Procurement path once they have met and spoken to individuals who describe it as an interesting and challenging career that pays quite well.

 

Going into Banking Procurement

Firstly, one thing to note is that there are multiple policies in banking due to it being a heavily regulated environment, which go far beyond a normal capacity. Working in Banking Procurement will expose you to bright and commercially driven individuals, providing an environment where you can interact quickly at a senior level. It’s important for those at the beginning of their career to realise that progression can be rapid - if they deliver, they will be recognised and promoted. We need more people delivering deals and making changes, which stakeholders are encouraging. The culture has seen a significant shift from what could be described as inherently “old school”. The new generation entering the market is highly qualified and willing to make a difference. Certainly there are people working in the banking industry who have been here for 30 years, it’s the same in every industry, however I think our sector is changing - in a positive way.

 

The life of a Banking Procurement professional

Working in a financial service’s institution is very fast-paced. One of the largest areas of expenditures is technology, which spans every category of our business. Whether you look at resourcing, travel or legal categories, a high percentage of what any organisation is currently buying is technology driven. It underpins everything we do and it is driving job creation in the procurement space. In FS, you need to stay close to your suppliers. You need to meet as many people as you can and understand what is happening in your competitors’ supply markets. Is the competition doing something differently? Are they working better, smarter, or more efficiently than you? Ideally there should be more emphasis on buyers going out on a weekly basis and speaking to “x” number of suppliers. People in our field should be networking just as much as sales people do.

 

An important role of any procurement professional is to be able to challenge the incumbent suppliers and have them consider new commercial models or ways of operating. Bringing in a small vendor in a tendering process can shake things up and make the incumbent organisation stop and think, which is important for the industry. In our business, it makes sense to encourage individuals to move across categories. If a legal category manager spends a year in the technology department, they will naturally have a more rounded view. To become a head of a procurement you need to be a well-rounded generalist; you must understand more than one category. Obviously the size of the organisation dictates those roles and responsibilities; the bigger the company, the more layers there are, and the more restricted you will be in your responsibilities.

 

Challenges for the field: strategy and governance

The challenges in the banking industry are very similar to those in other industries. Four pillars underlie an organization: staff, cost, location, and infrastructure. If you change one, it will impact the others.

 

As a procurement professional you need to be able to understand all 4 of these and analyse what impact a change to one of them will have on the other three.

Across every banking institution, there is a high level of governance. We face new regulations every day. Financial services require professionals to balance governance with administration. Reducing cost and improving service deliveries are key but an essential part of our role is also to mitigate any risks that our organisation could face.

 

We have to position ourselves in a way that does not appear to be transactional. It means understanding the market, benchmarking with peers, speaking to vendors, and going to visit them. As a buyer you have to be able to learn very quickly who the key suppliers are, understand the latest trends, and anticipate changes in the market. You are there to advise, challenge, and provide new ideas, but not necessarily to make the final decisions. We should see ourselves as a business support function working very closely with our stakeholders on strategic projects.

 

Complexity in deal execution

Across banks, there is a fair amount of clauses and policies that need to be included within contracts, which are bigger and far denser than before. However, we are very well- equipped by our legal department with boiler plate contractual templates so that we can sign a legal document autonomously. In general, professionals in our arena are excellent at negotiating contracts and have a full understanding of what to include.

 

Measuring success

It’s not just about the price. Everyone can agree with that. However, you can’t ignore the price or the saving. We need to be realistic about what we do. It will always look good to deliver a big project and say, ‘Based on this forecast I can impact the P&L of an organisation by “x” amount.’ You want to be seen as innovative, capable of improving efficiencies and providing a better service to the end customer but also reduce cost. In many organisations, savings is what gets you noticed and elevates you because that’s what drives your key stakeholders. This should not be seen as a negative. We are facing sales people all day who are targeted on sales well part of our roles is to deliver savings.

 

Working with investment bankers

It’s a challenge. Working with stakeholders in this industry involves reacting quickly: they want something done now. Individuals evolving in such environments know their markets inside out and are heavily focused on costs. So, we need to be a bit smarter and more agile when we interact with them offering creative initiatives that influence. However, we can’t make decisions for them. We need to very quickly be in a position to share ideas and for them to be in a position to select what would be best to encompass in their wider strategy.

 

Outsourcing and off-shoring

Banks need to focus on their core activities - taking care of customers and meeting their requirements. Questions like ‘Do we need to have that job done in this jurisdiction or could we off-shore? Who does it better, quicker or cheaper?’ will be raised by management. This is an on-going process and should be asked at the start of any project unless there is a clear reason not to. Skillsets and capabilities are ever growing and developing in other jurisdictions such as EMEA, India. Looking at having procurement or business presence in each of this location should now, more than ever, be a consideration.

 

Personal future goals

I will continue working in Procurement for the time being. My goal now is to work globally. Ideally, I would love to work closer to EMEA (Europe, Middle East and Africa) countries. I enjoy being fully immersed in a multi-cultural environment. I like travelling and discovering new things: new suppliers, novel ways of working. I find it stimulating to work in a multi-cultural team.

Irina Nagy
Posted by Irina Nagy
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