The procurement team at Danish private banking firm Danske Bank is adding to top line growth by offering a procurement advisory service to banking clients.
Speaking at ProcureCon Indirect in Copenhagen, Danske Bank’s head of procurement innovation Bo Dungal told how his team had created a new banking product.
“We took the procurement discipline and put it in front of our clients,” he explained, adding that today 100 clients are taking advantage of the service.
Via the service, the procurement team offers banking clients access to tools and templates in areas like contract management, vendor management and general procurement. Rather than offering bespoke advice, Dungal said it was more about helping clients professionalise their own procurement, while offering them the gift of time.
He added that it only takes one member of the procurement team to manage the service – less resource than he had anticipated.
The service is proving popular and could even be responsible for some clients choosing to bank with Danske Bank, Dungal claimed, as evidenced in on-boarding questionnaires and customer satisfaction surveys.
“We are probably the only procurement function in financial services that can say we are acquiring clients for the bank,” he said. “Clients say banks all offer the same products, and that us sharing our capability is the differentiator. This is exactly how [procurement] can and should contribute.”
While setting up the service hasn’t been without its challenges, with lack of buy-in from some quarters, Dungal urged procurement professionals not to always seek permission and to take risks. “There will always be some corporate guys saying no, but don’t be afraid to disrupt yourself,” he said.
The next steps for the service will be to digitise it, with tools and templates available online for clients, as well as exploring offering it to markets beyond Denmark. Dungal also suggested that it could become a profit centre in time.
Dungal said he believed procurement should be a key part of the customer journey, making a contribution to customer experience.
“Customer experience is the most important thing for procurement today,” he said. “[By] taking the pain points and matching them to partners, we are saving weeks, if not months, of process.”
As another example of adding value, he shared how procurement helps drive an online ecosystem that Danske Bank has created to support social start-ups. The procurement team requests that larger, more established suppliers contribute by mentoring smaller organisations.
“As a procurement person facilitating this and controlling it, we have a lot of power and influence,” Dungal said.
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