Discover Financial Services Shares Their Procurement Transformation Story
“Digital ambition” has been a theme for the procurement team and their leadership at Discover Financial Services, as their VP of Global Procurement and Services, Nanette Bauer, shared on a webinar discussion produced by the Hackett Group and sponsored by SpendHQ. (Discover Financial Services is a customer of our procurement performance management solution.)
In this webinar, you can hear her describe the progress of their three-year transformation journey and the solutions they implemented, focusing on the current phase focused on procurement performance visibility and oversight.
Hackett’s associate principal for procurement advisory, Jonathan Fehring, first shared some of their research and insights related to the topic of transformation and digitalization. “Procurement transformation has taken on a new meaning as technology has become an enabler,” he said. The need to be digitally enabled has never been more important.”
He cited Hackett’s data that predicts procurement’s workload will grow by 10.6% in 2023, but without comparative increases in headcount and operating budget. “When we talk to procurement leaders about how you’re going to close that efficiency gap… well, most organizations are looking to technology to make up this gap.”
Among those who attended the webinar, a live poll found that nearly 40% are just starting their digital transformation journey – and 11% do not have any plans. Only 16% are in their final stages.
Nanette of Discover said she likes to use an analogy to demonstrate the differences between the three phases of their transformation timeline. For their first phase, they focused on implementing best-in-class processes and tools, such as strong discipline in sourcing and contracting. She described this as similar to deciding to run a 5K race, that you need to start by getting the basics right including the proper shoes, the mechanics of running, getting healthy, and relying on best practices to achieve goals.
In Discover’s first phase, “we focused on getting the right talent and giving them the right processes and the right tools to enable them to achieve the right results.”
In their second phase that started in 2022, they turned to being more proactive, which she likened to being part of a track relay team. “We’re building strong relationships with our stakeholders and using their roadmaps to inform our supplier roadmaps to develop optimal plans.” Here, they also determined how to use additional technologies to drive more value such as e-auctions and AI bots.
However, as they moved through phase two, she said they found “there was a lot of information out there that we weren’t able to harvest.”
That brings them to phase three, which is underway in 2023 and focused on more data-driven and predictive operation of the procurement team. Nanette thinks of this more like “Olympics-level running” where you’re using tech to monitor strides, biometrics, and more.
Key questions they were looking to support: Where can they identify key performance characteristics to improve overall results? Where are projects getting stuck? Beyond the savings, what is the long-term value they can track?
Discover needed a procurement pipeline tracking system to see it and report on it, she said, and didn’t want to wait for a monthly report to get assembled each time. “We realized we were missing this piece.” They went out to market to find a solution.
After looking at all the existing suites and other point solutions, they selected SpendHQ’s (formerly Per Angusta) Procurement Performance Management product.
As she describes, the solution gives them a number of benefits:
They can look at hundreds of projects in one place and as well as look at data points where they can drive optimal results. With PPM, “we have easy and quick access to information” to help them use resources more effectively. They can see if team members may be in need of more help or training, or if a project is delayed with a business partner.
Senior Leadership and Stakeholder Reporting
They now have an easier way to use data to inform senior leadership on progress and goals, as well as provide that visibility to stakeholders and finance organizations. “They are key participants to these sourcing projects, and [it’s] allowing them to have insight into what’s actually happening and will ultimately improve the outcomes.”
She also runs a report weekly to show her every project over a certain dollar threshold, with expiration dates, so she can socialize and communicate those to the C-suite where their input is needed.
She said during the presentation that they were very inefficient previously, responding to the latest need of the business vs. getting proactive and being more of a leader. “One of the benefits of the tool is not only tracking cycle time but also to see where in the process things are getting stuck.” This helps them continue to evolve and to ensure they don’t “stick best practices in a drawer.”
ESG Progress Tracking
They set a trigger in the PPM platform to track progress more easily on projects that have ESG and diversity spend goals. “We do have to report that to our ESG organization and that gets published publicly.” A next step to use the solution to help drive progress on governance.
And request a demo of the Procurement Performance Management platform selected by Discover Financial Services.