Can I Sign Pennsylvania Banking RFP

Can i industry sign banking pennsylvania rfp

[Applause] [Music] we're gonna talk a lot about the CP o2 CFO conversations sometimes we think we're speaking from two different languages when we're talking with the CFO to the CP OC po2 CFO trying to talk about our initiatives this is gonna be talking about how do we bridge the gap and so we have a fabulous panel that's gonna talk about it and then I have least accelerator who's going to facilitate this and while people think Lisa's oh my god that's so boring let me tell you you don't know what you don't know and you better pay attention because a lot of stuff is going on and us as cpos and procurement professionals need to know this stuff it's really really important and we can either make ourselves look good or make ourselves look really bad by not paying attention so where I spend a little bit of time on the Lisa's then we're gonna just talk about how do we bridge the gap so I want to invite up our facilitator today it's Steve Kuiper vice president marketing for least accelerator over 20 years of experience and procurement supply chain and financial sectors at various technology companies and now he's with lease accelerator and I'm so excited cuz he's passionate about the subjects I'm right hand it off to you thanks Don so I am a seahorse this is my first time it's sig I actually have been in the supply chain in procurement space for about 20 years now but first time to attend a sig event so it's great to be here I'm based in the Washington DC area and on my flight out here is actually thinking about what drew me to get into the space originally and I was thinking back to 1999 when I first started doing some of this stuff and it was really a lot of the technology and innovation and disruption that attracted to me to it at the time for those of you that can remember that far back you think back to late 1999 it was a pretty interesting time to be in this space right we had commerce won and arriba running around taking over the world convinced and everyone to buy their first a procurement suite and we had all these online marketplaces like free markets and trans aura and code ascent and 1600 online marketplaces that were bringing buyers and suppliers together as a new electronically with reverse auctions and ER FPS and promising to change the world and procurement forever and as I went to sessions yesterday I don't think I went to one where the topic of Technology didn't come up a IRP a blockchain which isn't really a surprise to us these days right because technology is so pervasive in our everyday lives and so pervasive in every different dimension of business that we almost expect it to come up in every conversation we expect the technology companies to be the dominant ones driving the world forward but 20 years ago that wasn't necessarily the case back in 1999 even though the internet was really taking off back then here's a trivia question for you every year there's a lot of these big magazine publications like Forbes and fortune and Fast Company they do these studies where they ask companies you know who are the most innovative companies in the world who do you think held Fortune magazine's most innovative company the world title in 1999 I'll give you a hint this same company had that title for six years in a row from 1996 through 2001 now most of you are probably thinking well that was back and the.com bubble so it had to be eBay or Amazon or maybe a more established company the time like Dell or Microsoft or Cisco but it actually wasn't a tech company so they had to be doing something pretty special to have that crown for six years with all the innovation and disruption that was going on now it turns out that this particular company I'm referring to was doing something very innovative and creative and it but it wasn't in the area of product development it was in the area of accounting this company was Enron and they had managed to pull off one of the largest financial accounting frauds in history and that led to some pretty big changes in regulations so after and Ron collapsed WorldCom and a number of other companies had to restate their financial results Congress got involved there are all kinds of shenanigans going on Enron declared bankruptcy shortly thereafter a few months later their executives were paraded in front of Congress and eventually sentenced to prison terms the company was systematically dismantled all the assets were sold off to different groups and cron got started a pretty heavy research effort into what had gone wrong with public accounting and looking into how things could improve and so there were all kinds of fun new regulations like sarbanes-oxley they came out and all kinds of new government agencies that were created but one of the things that didn't get a lot of attention in the media and you guys probably haven't heard as much about is the accounting boards actually went back and looked and did some analysis and how did Enron and world come and all these things sort of come to be and what were the loopholes and the strategies that they were using and how could we close those so that this sort of thing wouldn't happen again one of the techniques that Enron had been using was they had taken a lot of the liabilities and ugly stuff in their financial statements and managed to push it off into these special purpose entities as they called them which were offshore companies largely that they wouldn't have to include in their financial statements they shared with Wall Street and investors and as it turned out when the SEC and Congress did their investigation they found that there was another category of off-balance sheet liabilities that was in the trillions of dollars and that was the area of leases now it was perfectly legitimate and acceptable to not put leases on the balance sheet according to the accounting rules but the SEC and others thought well it's a little bit misleading given that there's this much sort of debt out there and it's not front and center on the balance sheet it's typically reported in a footnote but most people don't scroll down to page 143 or 151 of your annual report when they're making investment decisions if anybody's ready an SEC filing we all know it's not the most interesting reading so they said about to try to close this loophole and make some changes in the way that leases were accounted for it took them 17 years to get these new accounting policies in place and they took effect on January 1st of this year 2019 for the first time we started seeing public companies start to report leases on their balance sheet for the first time and over the past 10 months we've seen a couple trillion dollars worth of Lisa's come on to corporate balance sheets in what many people would call the biggest accounting change that has ever occurred now most of you in the room have probably not given a lot of thought to what do you lease or how it's accounted for and what you lease probably depends a lot about your credit rating and how you think about cash flow and also to some extent what industry you're in those of you that are in the retail space or hospitality your professional services you're probably leasing a lot of real estate land buildings things of that nature there are more acid asset intensive industry like telecom or transportation or utilities or oil and gas or discrete or process manufacturing you probably have a more diverse mix of things that you might lease which might include fleets of vehicles rail cars trucks marine vessels that you're using to move raw materials and finished goods around your supply chain maybe you lease a little bit of mighty equipment office equipment things like the photo copiers in the break room maybe even the furniture desk the table that you're sitting at every day and you think about your business and all the assets that are used to run it on a day to day basis a better question might not be what to lease but what do you actually own when you think about business process functions that are out sourced and the number of service contracts that you have with various different vendors that are using assets that are critical to your business but don't necessarily you don't necessarily hold the title or own how many of you in the room actually own these servers that your ERP system is running on I bet a lot of companies are running them in the cloud how many people have a perpetual license to the source and and procurement software that your team's used to run their day-to-day operations again I've done a lot of people are switching or have switched to software as a service models and there's 10,000 engineers that are a couple hours north they here in Silicon Valley that are on a mission to turn every product into a service because Sand Hill Road and Wall Street has fallen in love with recurring revenue models they don't want you to buy anything they want to rent it and pay them a subscription fee in perpetuity so we might be sitting here in 20 years talking about the good old days when procurement organizations used to be able to buy stuff because by then we may be forced to rent or subscribe or buy it or consuming as a service right now I could see some skepticism and the front couple rows here people are kind of scratching their head going but yeah when I use the cloud or I buy software as a subscription that's not really a lease is it and that's a great question because that's where this accounting change gets really interesting there are a lot of gray areas so the accountants think about leases differently a contract doesn't have to have the word lease at the top of it or anywhere in the document for it to be considered a lease from an accounting standpoint so things that a banker or a lawyer might not call lease an accountant would so for example under these new accounting rules it's possible that if you saw outsource your production to a contract manufacturing company that the factory or some of the machinery and it's in the production line or the land or other assets that are bundled into that contract could be considered leases and would be put on your balance sheet as a liability it's possible that if you're using a third party logistics company but some of the trucks and the forklifts and the warehouse buildings then are in those contracts could be considered leases by accountants and moved on balance sheet if you outsource different parts of your IT the data centers that the servers are running and the storage devices the networking equipment the power power supply units could be considered leases from an accounting standpoint same thing with Power Purchase Agreements advertising signage Bloomberg terminals that you might be using to make stock trades Direct TV set-top boxes that might be sitting in retail stores or at your corporate headquarters location in the lobby playing CNN or other things that for visitors all these things could potentially be considered leases so here's where you guys come in the accountants need your help when we sign new outsourcing and service contracts as well as leases they need to collaborate with the procurement team to interpret those contracts which as you know some of which are very sophisticated and can't just be handed over to a junior staff accountant to try to interpret and understand and there's a opportunity to not only help the accounting team comply with these new standards but also to potentially get some of these things off the balance sheet because depending upon how you write the contracts some slight changes in the terminology and the wording can help keep some of those liabilities off the balance sheet another area that the accountants really need help with is tracking these leases and contracts throughout their life cycle so if you think about a company say for example that has a thousand different contract leasing contracts maybe the average term of those contracts is four years so that means every year 25% of the contracts are coming to the end of term things are coming off lease presumably you're using those assets for something so you're probably going to want to replace them so you've got 25% coming off lease and another 25% new leases so that's 50% of the contract population that's changing every year even things that are in the middle of contract might have changes to the rent or the pricing you might make modifications to add or drop assets to them so we find on average about sixty percent of a company's lease portfolio changes every year and there may be accounting ramifications for those things so procurement is in a really good opportunity to help your peers in the accounting group track some of these things to the extent that you're involved in negotiating new contracts or renewals or modifications to them now there's nothing like talking about leasing and accounting to wake people up in the morning as an opening session I know this is exciting stuff but the good news is we're done talking about the leasing stuff and we're gonna broaden the conversation a little bit because this panel is really gonna be about how can procurement better collaborate and work with their peers in other parts of the CFO organization whether that's finance whether that's accounting whether it's Treasury and get better aligned and we thought this lease accounting change was a good example of where there's a lot of intersection and overlap between the things that procurement organizations are doing and the things that are counting so we thought this would be a good way to kick it off so at this point I'm going to ask Tom and Joseph to join us up on the stage and we will move into the panel part of this session okay great well why don't we take just a minute to do quick introductions here but you probably know her well but maybe you could spend a minute just talking about why we added you to the panel because you have an interesting background I think people think of you as a procurement I actually in my closet bean-counter recovering CPA I had private practice in Silicon Valley for about 12 years working with early-stage startups like Electronic Arts and companies like that Hewlett Packard in the early days that's how old I am then I was brought in to build a cost model for someone who was doing strategic sourcing but couldn't prove their value so they hired my firm and I fell in love his sourcing so I sold my CPA firm and I went into sourcing consulting and then another 12 years later I had an opportunity to take over sick so at the end of the day as much as I try and shut it I love Excel spreadsheets and I love numbers but I also learned that I had to learn to love people as well to be able to be good at sourcing so I've come a whole way and this stuff is really exciting to me I'm embarrassed to say good morning Tom what's been the CPI US bank for a little over 11 years prior to that 20 years at General Mills in first in an IT role then moving from that I was a commodity trader for General Mills moving then into procurement supply chain spent a few years in the home building business but really privileged to be here enjoy this a lot it's fascinating the procurement profession itself as you all know is a great place to be in an organization and happy to be here and and be up here with fine folks and really have enjoyed getting to know Joseph a little bit thank you Tom my name is Jose Martinez I am the chief procurement officer for a bank in New York Mellon I've been there for about six months now prior to that I've had a series of CPI rolls in a number of global banks and my last role I was both a CTO and a CFO so I think that'll be relevant to what we're doing today and my career which unfortunately spans almost 30 years actually more than 30 years I've had three different lives I was an officer in the US Army I was a consultant with PricewaterhouseCoopers and then I've worked in financial services and supply chain I have an interesting fact so see Piper you are Steve kite for the first yes far as I know yeah okay Tom I'm the ninth Thomas Lutz benign yep Joseph I'm Joseph Francis Martinez the 22nd these two just had an epiphany at breakfast they were like something about you go by Joe and he said always Joseph and he said I'm Joseph Francis Martinez's 22nd and Tom goes I'm the ninth my sons to tenth no one ever beats s no so we're just number one yeah I don't but I just ring back so now when you see Joseph you're gonna think 22 and you see Tommy right I think nine and you're gonna think wow wow I mean Joseph shared that's 1301 you think about it that's amazing that's amazing that's amazing yeah he also said his family lacks imagination so they were all Joseph Francis Martinez but yeah anyways I didn't want to sidetracked you but but I did so sorry so let's talk about finance and procurement and different perspectives they have so Tom why don't you start us off one of the things that I definitely observed when we were chatting financial professionals tend to take a very numbers kind of driven black-and-white type of approach to decision-making which is a little different than the way procurement folks think about things can you kind of share your perspective on how procurement and finance sort of see the world through different lenses some of your experiences yeah I think I would summarize it as I think procurement folks are a balance of both qualitative and quantitative and my CFO would lean very much towards quantitative and I was thinking of an example I had an experience with our CFO years ago and my team and I had spent several months working with our retail branch environment and with our property spokes to improve the remodeling and the building of branches that are found in grocery stores on college campuses sometimes on corporate campuses in US bank has about 700 of those across the country so after about three months of effort we concluded the project reviewed the results and I sat down with the CFO and in my you know monthly time together he wanted to know where projects were what was accomplished and and what was saved and I was reviewing for him I mentioned the branch project the remodel and how he made it better and he basically what he wanted to know was what did we spend per square foot before you started and what did we how much had we improved that and reduced that expense and we had made some improvement there but it was marginal it was it was maybe you know maybe three to five percent and he looked at me I think there was a hint of disdain and like was the juice really worth the squeeze and I said however let me talk to you about the other things that were made better I said the quality of the in the construction was improved the adherence to brand standards across the bank was improved and we reduced the construction cycle time by two weeks which means you can open up that branch two weeks sooner than the business case originally warranted and all of a sudden the transition the the conversation took a whole another term because we all know procurement is not just about savings which is where they want to go when we all understand why the CFO wants to go there but it really is about driving value and that value can show up in a lot of other places and of course every one of those has value I mean that's why we spend money on our brands we open something two weeks sooner we're gonna enjoy improved revenue etc but I think that illustrates the healthy tension that exists between a CFO and their look at the world and the responsibilities that they have with Wall Street and we as procurement professionals have to constantly work to keep that lens a bit wider great Joseph you have a unique perspective on this because as I understand your last role you actually wore the CPOE and the CFO can you share with us some of the things that you did to sort of bring those organizations together and some of the optimization opportunities yes certainly so one of the things that we traditionally don't think about is what we do in procurement essentially is we're looking at the non comp cost categories and so that's kind of a space that we play in which ultimately is going to be one half of the cost to income ratio now well we can help to put in place a perspective that will help the sales forces increase the sales at the end of the day we really need to be working across the businesses impacting that that cost basis and in order to do that you need to be able to see it you know if you can't if you can't see it you can't measure it if you can't measure it believe there's not a lot of value that's gonna be derived so one of the things that we looked at was saying okay how do we actually create transparency from the Cosby's perspective and and so we went in and we implemented essentially a taxonomy that enabled us to work four levels beneath the general ledger we tied it to our source systems and so we were looking at that as a way to create transparency from a cost basis perspective but the ancillary benefits that came from that were because once you have the the cost decomposed appropriately it's going to reduce the number of journal entries that you're gonna have to do from an accounting perspective it's going to help you with your forecasting it's gonna allow you to do planned planned adjustments and it's ultimately from a finance planning perspective as well as from the controllers perspective you're actually going to decrease the cycle time that's going to take to close your books it's going to give you a better perspective relative to how you're actually impacting the class space and it's gonna allow you to optimize that force and in some instances we were able to actually introduce robotics process automation where because we now had standard classification for how we're actually decomposing our spend and that enabled us to reduce the number of headcount that we had in some of our middle and back office finance function so there's a direct correlation because of the stuff that we do in partnership with the other parts of finance and so it's it's a unique way of looking at things but frankly I think it's a way that we're going and everybody talks about how AI and our PA are gonna impact as well this is one way that you can start to see the benefits where it's basically you're you're working across the entire stack and you're optimizing that but it all started with the with an engagement where we wanted to really optimize the cost base so that we could go out and do and make better markets and better events from a competitive perspective but it ultimately allowed us to actually pull that through the financials in a much more seamless manner thank you so dawn you you've had an interesting journey starting off as a CPA earlier in your career and running practice and then spending so much time with procurement professionals what are some of your observations about the differences in the mindset and how the two different groups the importance of the business so I have to be honest with you when I first started I was I brought in to build a total cost of ownership cost model and I realized that I am very black-and-white as as an accountant everything had to balance I mean to the penny and numbers told a story and I just remember the first time when I we had done our analysis and all the suppliers and you know we hold it up and say well obviously we're going with this supplier because the lowest total cost of ownership the great quality quality was the same across the board everything and they and I got pushed back and they said well what about you know that we're not sure we want to switch you know to a new supplier and I'm not sure the nursing this is at Kaiser Permanente I'm not sure the nurses really you know are gonna appreciate those changes and how do we educate it's like guys it's right here it's black and white there's no I mean and to me I was incredulous like I mean I started to think like are you that dense and it's right here and what I thank goodness I had a mentor who had a PhD in organization development amico Banfield who worked at Southern California Edison who was my lifelong mentor and she said dawn it's about the people and I said no it's about the bottom line because that was what I'd been my entire brain was focusing on that and she said it's about the people you can source anything make any decision you want but if people don't buy off contract what good is it and it was so I opening you know like the first time I had to go and they brought in a change management consultant I went oh please I mean I felt like this is like a hippie thing like this is so stupid and so it took me I would say a solid six months to a year to let go of black and white and see shades of grey and those shades of grey is our ability to sell our ability to lead within the organization our ability to get people who want to follow us ability to get people to believe in what we were doing and it was a pity for me and it completely changed where I started putting the people first and I listened to every yeah but yeah but which is the favors you know people's favorite comments a procurement yeah but you don't understand yeah but we're different yeah but you don't never sources before yeah but and I learned that every yeah but had to be addressed because there's all this background noise thing that's going on in people's heads so you know they don't say it to you they're thinking about you and about what your America recommending and if you've got to get all that background noise out and then you get down to everyone can come together and sing Kumbaya so it was an epiphany for me and thank God I made it to the other side otherwise I'd be still that black and white bean counter and boring as heck didn't have no friends but but it just changed the way I approach the world and so I fell in love with sourcing because I realized it is all about the people it is about the tremendous amount of change that we can make so so know that a lot of your CFO is that you report to are still stuck in that it's all about the numbers because that is such a comfortable place to be if you're a bean counter because it balances and so just I think trying to get them to realize about all the people processes and changes that we have to make our monumental like you said all the improvements we made that may not be in the bottom line but it changes people's you know work and their relationships to how they work it's a different conversation so I think we have to you you have to work with these people that are liked me how I was and help them see the people side the change management side the you know the they don't have any EQ so you have to teach them EQ I didn't okay so Joseph another question for you so you you've been both a CFO and a CEO what advice could you offer the audiences procurement leaders and their organizations when they come talk to a CFO you know how can they change their terminology perspective how can they communicate better what their strategies are and the rationale for the types of decisions they're making any advice or suggestions well I think you have to lead with the fact base and you better really understand what your costs look like but it's not just about that you need to be able to go in there and say okay how do I actually if I make an improvement and I am able to trace that back to an earnings per share perspective that's what they care about they want to actually understand what is the true impact that you're doing and one of the things that I would never lead with is cost avoidance I see I think that's an interesting metric that is best left at the door talk about if they're wanting to talk about cost you want to look at the P&L cost reductions you want to take a look at the project cost reductions you want to take a look at the one-time saves because those are all tangible the cost avoidance is an interesting metric but it's not really valuable and it what it actually does so they think is it erodes credibility relative to the good work that we're doing it's important but it's not something that the CFO is gonna really care about to be candid with you in addition to that you need to make sure that you're understanding that whatever strategy you're putting in place and you need to they need to be able to pull that through to the strategy of the business so what you're doing has to be downstream of whatever the business strategy to are and so that that I think is something that that we have to do a better job of communicating what we're doing with the CFO's and so I'll give you an example if for instance you have a time to market issue within a particular new product or service that you're gonna be putting into the market and let's say that beneath that you're working with a marketing organization and they're trying to get something on let's say November the 1st this can be their launch date if they come to procurement and procurement is working and they're saying well great you know I'm gonna go out there and get some printed material for this and they get the lowest price for that but it doesn't deliver until the 3rd of November then your strategy is misaligned with the strategy of the business so it should have been a surety of supply not lowest price and so you need to think about what is when you're working with the CFO and with the other executives what is the strategy that the business has and then take a look at your category strategies and take a look at what you're actually doing in order to be able to drive that show them the value be concise go in there rather than with PowerPoint go in there and show them actually you know what it is that you're doing from a numbers perspective which I think is important and you know respect the fact that they're not going to be subject matter experts so if you go in there talking to them and procurement speak you think they're gonna you're gonna talk right past them you have to go in there and actually speak to them in the language of finance and it's all-encompassing to pontas one of the things that I did and what I'm doing where I'm currently at is we're gonna be sending our our teams through this sig certified sourcing professional program and it has a couple of modules in there around finance I think it's important that all of your teams actually get that type of training specifically so that they have the ability to work across the organization with the finance and and speak to them in the language of Finance because if you can't do that it's really going to be difficult for you to be successful hopefully answer your question into exactly what you said now you're suddenly putting leases on the balance sheet which doesn't mean a lot to a lot of people here but it means that you're recording an asset and liability which completely changes a company's financial picture to the market and that's the part that you know they have to get comfortable with balance sheets and income statements and GL's and all of that stuff even though it sounds really boring but we're impacting it so absolutely so next question I'll open up to just all three of you you guys have had a very diverse range of experiences General Mills you any examples of companies that you think are doing this right or they really kind of figured out how to get finance and procurement collaborating and communicating together or getting one side educated or maybe other people in your network that you've heard that do well any success stories chef Steve I don't know that I could I would know enough to say finance and procurement but when I look at a model that we would aspire to as an organization in terms of getting the customer experience right and letting the profitability from that right experience then drive the right behavior I look at Apple okay and the fact that you know they have figured out what is it worth to please the customer and when you go in an Apple store you think about the experience that you have when you use their products they're certainly not the least expensive right and yet we would say from a value perspective you know the empirical evidence indicates they're getting it right and I think that they as an organization have established a culture that gets everybody aligned with that mission and I think we as procurement leaders find our success when we can figure out how to tie our procurement organizations into that organizational mission and you know that that takes a lot of time and talent but I think that's what makes the job so interesting a lot of people have what they think is a qualitative view of things it turns out those things can e quantified it's a matter of helping them understand how to quantify well what is it about that supplier that they like what is it about that experience that they like what value drives from that engagement and how ultimately does that engagement get monetized and so I think of Apple when I think of a model of an organization that does that pretty well pretty consistently for a long time even given the significant transition to Tim Cook yes great I like you will kind of play upon the apple of specifically when you think about it Tim Cook used to be the CEO at Apple so one of our own actually made it to the c-suite right and so I do think that that that really shows that if you're able to actually have a broad array of roles and responsibilities in your career you have oh I I really honestly when I'm looking at it across other companies to your point I don't have enough of a point of view to where I'd be able to do really opine I've seen some efficient and I think effective supply chains out there but not one where I can just raise my hand you know unless it's an organization that I've worked in because what you see from the outside versus what you experience on the inside is typically very different and so I think we as an organization or we we as a profession are somewhat nascent in terms of what we're doing to actually be more effective and efficient within within the our organizations and now you know we've been doing this as a you know as a profession a real profession probably for about 35 years right but you're now starting to see that with the education systems that are out there I'll give you an example if you look at what ASU or NC State and Michigan are doing they're actually morphine what it is to get a supply chain degree they're starting to actually inject in their risk management they're injecting in their data analytics so they have to take data science classes in order to meet the curriculum so I think that those are things that are eventually going to help morph what we are into probably something that we can't even imagine today so if you go back you know 3540 years it was an operations degree which now is becoming a supply chain degree so I do think that there's that opportunity from it from an industry perspective and I think it's incumbent upon us or CPOs to work with our teams and to help drive them okay because if we don't help to morph what the future is gonna look like and we have to be early adopters and we have to be able to fail fast and move on because you just you just are not going to be able to make changes if you're afraid to fail so I can't really apply in others but that's my view from my experiences with in sake I would say one that stands out and she actually one was inducted into the City Hall of Fame was w menos McHenry who was at Huntington Bank she was a CPA she helped write a lot of our curriculum for sick University and she got the CFO talk and now she's going on from CTO to vice president operations but she was one that just always could translate she by the way if you're not linked in with her they're not linked in with these guys linked in with them because as mentors she would sit down with people and say you're not speaking the right talk and she never hesitated to call you out on it and she has mentored so many people with in sick as these to have have as well just to help us with the language so she's Santa stood out for me because we were fellow bean-counters and said what I was attracted to that but but she also then started to mentor other procurement people so it was really a wonderful relationship with her that's great good so last question open to anyone any any additional kind of words of wisdom lessons learned best practices give just one try and train your staff that $1 not a dollar that a capital dollar is not the same as operating and maintenance dollar and so if you're working for a business unit and their drive is to reduce capital reduce capital reduce capital and you keep bringing them sourcing initiatives they're gonna reduce their own m you're not gonna be successful and vice versa if they've got to reduce their their annual O&M expenses and you're bringing them capital projects you're not delivering so one dollar is not equal to another dollar when it gets to their budgets and the CFO and we've got to train our staff to understand the difference of the dollars so that would be my first takeaway if people understand the difference between those two type of categories you you don't know if you're being successful you don't know if I'm making my business you know successful I think the piece that I think about here when we have this conversation is talent right and so I think what we look for in the marketplace today to hire has a different skills that and a different experience set than maybe five ten years ago and looking for people not necessarily with traditional procurement experience but understanding value understanding the importance of you know really serving as a bridge between a business line and operating unit and a CFO when it comes to vendors and being innovative and being agile that's a different skill set and so we're constantly looking at being more inclusive more diverse in terms of both professional experience educational background etc because we found that we as a procurement organization have benefited from moving beyond maybe some more traditional recruiting that we've done great when I look at it I'm saying we have to really think about how we're gonna actually impact the growth of the business and in order for us to impact the growth of the business we actually need to make sure that we're looking at not just the cost but the risk the risk is becoming more and more crucial you know if as we take a look at the regulatory environments across whether it's pharma financial services insurance third party risk management is becoming an extremely important component of all of our organizations and so making sure that we are helping to optimize that process with the procurement process with the finance process all in alignment for what we're trying to do with helping to grow to help our businesses grow that's what we've got to be thinking about we got to think about ourselves as value creators value enablers but we can't be seen that are the green eyeshade cost guys that's not gonna work we have to make sure that we're thinking about this holistically we're having to think about how this is actually going to empower our organizations to actually eke out the competition I work in financial services I work for a bank that's been around for 235 years founded by Alexander Hamilton that doesn't give us the right to exist for another five years you know the fintechs that are out there that are coming for is every day if we don't partner with them and find a way to get them our risk processes more effectively they're going to compete against us and at some point they're gonna supersede us so you know when you look back on Amazon as an example right what an industry disrupter they've been you know they started out selling books and now they've they've essentially gone and and in the retail space they've reinvented what that means if you take a look at the malls back in the day they kind of laughed at it they're now buying malls and turning malls into distribution centres because of the locations that are close to to where their customers are so we got to really think about how do we reinvent ourselves and I think we have a perfect opportunity from a procurement perspective because we're the folks that on the front lines working with the suppliers looking for that innovation so I think it's really important for us to be able to bring that insight to our finance organizations to our operations organizations to our sales organizations so that we're thinking about this I think as business people not as somebody who's in the middle or back office that's that's my so we have a couple microphones I have one here and one in the back so come on up Reid oh now it's your turn insurance Joseph a question for you or maybe for the panel is well you mentioned about the cost avoidance guidance yeah I think it's an interesting type of save for lack of a better term but I don't think you should ever lead with that because the numbers become very large very quickly and what what what the CFO is gonna care about is what can I actually pull through my P&L and what is actually going to impact the budgets but you'd also be very carefully you don't come across as the budget cutter you need a partner with businesses so that you're not seen for ie procurement is not seen as the folks that are going in there and when they work with us their budgets get cut well we have to do is we have to make sure that we have the ability for them to do reinvestment and we need to make sure that we're putting in place those those components but to answer your question specifically on the cost avoidance it's an interesting metric but nobody believes it they don't so that's just my point of view it's you can have it out there but it's something that should be in the appendix it's not something that you should be leading so if I'm reporting out I want to basically show of the four I'm gonna put that in the appendix the three that I really want to show her like my pl save my project save and my one-time saves because those are real those are things you can touch and then we have a question back here in the back yes certainly so essentially when we started to take a look at the non comp cost categories what we've done is we've come up with 13 jobs 13 level taxonomy in terms of breath so we have we have group at the we have family we have group market category subcategory and then beneath that we have capabilities and so what we're doing is as an example at the family you have professional services and labor you come down to a group okay and so what you're able to do is you're able to say well you know what what do I have here do I have consulting services and do a have contingent labor and then as you take it down what you're doing is you're looking for opportunities to make sure that you're able to tie it at the highest level back to the GL because you don't want to create a Restatement issue for the CFO and then you want to be able to tie the taxonomy to your source systems so that you're getting it right when you're ingesting it into the supply chain as opposed to going back and having to restate it in it and move it around because how many of you have had to deal with suspense accounts right and when what's happening is they're putting cost in there and they're mixing it up by the time it comes out it's very opaque in terms of what you're doing is so you start to lose that transparency so for us by putting this in place what it enables us to be able to do is to be able to say this is what this cost is this is the cost category I should go to by having that subcategory level it allows me to then start to do risk ratings from a third-party risk management at the subcategory level so I can reduce the cycle time relative to how I'm actually going to get to market and then what I'm taking a look at is that the market category that allows me to make market baskets that I can take out from a competitive perspective now remember we buy at the capability level but we actually go to market at the market category name so so for me it's just a logical way of enabling us to be able to look at our non comp costs standardize that and now you can start to budget effectively now you can start to actually do your risk management effectively because you're calling an apple an apple you're not calling an apple a pear and so but by doing this there's a lot of efficiency that you can gain across the supply chain but it's not easy okay and it's something that you also need to have a regimented governance program and process a place war because the capabilities are gonna change on a regular basis your subcategories and market categories may change over time okay so as an example how many of you if you had a telecom category and you had a mobility component to that and you'd look at it at a capability level 15 years ago we would have had pagers nobody has pagers anymore they have smartphones so so you need to be able to think about how you're gonna govern that as you transition it over time but there's a tremendous amount of efficiency and effectiveness that you can get from that but all of this is part of a larger program a taxonomy and it is usless you got to make sure that you understand what your processes are across your ecosystem down to a level four so you can make sure that you have your process you can get your desktop procedures you can tie that to your policy and your risk and control framework by doing that what that enables you to do is to start really thinking about how are you actually going to change the ecosystem in such a manner that is going to become much more efficient and and I don't know about you but it's very difficult for me to get new headcount okay so this is a way for me to be actually optimizing headcount that I have it's it's a way for me to be to play bigger with my stakeholders because they don't want to spend time going through our processes but they wanted to do is to get on with the business of banking so hopefully answer your question we have time for one last question and it's over here if in I'm sorry Bri you know you two can fight it out Antonio but they're going to be around afterwards so you will get your question answered seeing you guys never thought that there's always gonna be so exciting when you saw at least accelerator in the title so the question is when you're looking and I think Joseph just like you alluded to a lot of us in the procurement function really have this broader business capability insight and I think we're being tapped to look at broader impacts across controller ships and across the global finance organizations that's conversations I'm having right now with my CEO and CFO are there things and this is for everybody are there specific areas that you're seeing could be focused efficiency areas in part of global finance that we can also be partnering and making some of those impacts as well I don't I don't want to hog the mic but I'll just say really quickly okay in in our planning and forecasting process working with the finance planning in accounting groups there's a tremendous amount of opportunity we have to streamline that process some of the actions that we because there's our ability to help them essentially do their jobs more effectively and our ability to bring in machine learning to be able to to improve the speed relative to what we're doing whether it's through a contract process whether it's it's a budgeting process or using our PA so that we rate because we now have a consistent component so that we're able to do a lot of the work that they that they traditionally are throwing bodies at either onshore or offshore so I think there's a lot of work that we can do there with looking at just from insular finance lands Antonio maybe not from a global finance perspective but one of the things that we don't practice broadly but we're trying to practice in some very specific areas as it relates to products driving most of our revenue is zero based budgeting and at least in financial institutions there's not usually a clear picture across an internal and external supply chain as to what your expenses are and what incurs them and is that truly a consumption model or is it a license there's an attributing of cost to products and oftentimes that relationship is not clear and then we as procurement are now having discussions across those revenue generating products to understand what all of those relationships are so that when we talk about our 2020 budget at the business line level we can understand that if there's revenue growth and volume growth there can be an Associated cost perspective associated with that and that's not something financial institutions typically do but we're trying to map that out and as you might imagine for those of you that do this today in more in other disciplines and other industries you learn a lot about what's working well and what isn't when you discov r what those relationships are because everybody thinks they understand what they are and yet when you actually look at the products that have evolved and the contracts that have evolved those relationships and the calibration between your expense and your revenue is sometimes not what you expect it to be and so that's been a helpful thing for us already well but I just want to thank you for this panel together and it really is something that we need to pay attention to we need to know about and I want to thank the two of you because I just knew that you guys got it and could talk to it and make it exciting and fun and so with that I'd like to thank this morning's panel [Applause]