"Know your client", says Alison Barto, HSBC's managing director for client network banking © Daniella Cesarei
"Know your client", says Alison Barto, HSBC's managing director for client network banking © Daniella Cesarei

HSBC's Alison Barto: From CPO to commercial leader

“You better learn your stuff or your suppliers will eat you alive.”
This comment drove Alison Barto to really know her markets and her people, earning her stakeholder respect at HSBC – and a seat at the top table

Supply Management is going to claim at least some credit for the stellar rise of Alison Barto (née Parker). For it was an article published in this very magazine – about Barto winning the CIPS Hart Medal for her dissertation essay on the potential disruption of the millennium on supply chains – that led to her being approached by global banking giant HSBC. Fast-forward 17 years and she is managing director for client network banking, a commercial role almost created for and around her, after she had spent six years as CPO.

“I’m a strong believer you can learn new stuff: embrace as much as you can and don’t be closed to anything,” Barto tells SM when we meet at HSBC’s London Canary Wharf HQ. This open-minded, positive attitude has served her well. A trained engineer, she chose a career in procurement after a graduate training scheme placement in the raw materials purchasing department of stainless steel producer Avesta Sheffield (now Finnish-owned Outokumpu).

“I loved the external contact, the commercial aspect, the negotiation and the contracts,” she recalls, on realising the procurement function was for her. She stayed at Avesta Sheffield throughout her CIPS training, joining HSBC to work in IT purchasing in 2000. Moving from raw materials to IT was, she admits, “a massive learning curve”.

“I remember sitting in a meeting with IBM and the HSBC people, and they were all speaking in complete jargon,” she recalls. “Everything was an acronym; my notebook was full of acronyms. One of my suppliers said to me: ‘You better learn your stuff or your suppliers will eat you alive.’”

So she immersed herself in the world of IT: spending time with suppliers, visiting sites and learning everything about their operations. She also got close to her internal stakeholders, sitting two days a week with IT and the other three days with her purchasing colleagues.

“Really understanding your stakeholders’ needs is essential,” she says. “You can’t go out and buy a nail when what they really need is a screw.”

Barto soon built up a reputation internally and after four years was transferred to Hong Kong to start an IT procurement team from scratch. HSBC has a presence in 70 countries and is listed on five stock exchanges (not for nothing did it once have the tagline ‘The world’s local bank’). Getting international experience is critical for anyone with leadership ambitions at the bank. But the move wasn’t easy at first.

“In my very first meeting with the head of IT operations for Asia Pacific, I was told: ‘We don’t need procurement here. We do our own thing. Get back on the plane and go home,’” Barto recalls. Yet after two and half years, during which time she built a team from the ground up of strong IT buyers from technology firms such as IBM and HP – and saved the local business “millions” – the same head of operations was begging her to stay longer. “I think that’s a sign of success,” she laughs.

How did she turn it around so dramatically? “It was about winning hearts and minds and building a relationship that said: ‘We are here to help you run your business, not challenge you.’ I sat with her team so she could see I knew my stuff and wasn’t just the ‘crazy procurement lady’. We put contracts in place and generated significant savings off the bottom line. When you start doing that, people listen.”

She then moved to the IT procurement team in the US, before running the EMEA IT purchasing operations, managing a remote team scattered over about 40 countries. “That was the point I changed from being a manager and ‘doing a lot of the doing’ to being a leader,” she says. Her leadership philosophy is simple, if time-intensive: get to know your different markets and get to know your people.

“Get out and see them all,” she advises. “Understand their markets and the political situations they are going through. You have to become more globally aware. I believe in going out to meet the people and made a point of going to visit every team. You need to know how old their kids are. Build that relationship. Demonstrate you are human and connect with people. When you are pushing people hard to make a number, you have to be able to motivate them.”

When she took on the CPO role in 2010 (acting at first, as the current CPO was on long-term sick leave), she would fly long-haul to visit teams in places as far afield as Brazil or Vancouver, often choosing to stay the weekend and spend time with them socially. “You find out a lot just from speaking to people,” she says. “It all becomes easier to manage when you really know people.”

In the wake of the global financial crisis, cost-saving was high on the agenda, giving procurement an opportunity to influence and add value fast. As CPO, Barto led a “soup to nuts” review of HSBC’s $14bn spend, looking at “where we had never reviewed contracts, where we were overspending – the usual good procurement practices”. As HSBC had grown fast via acquisition in multiple countries, inconsistency was rife. Driving it out meant building relationships with leaders in various markets and businesses (HSBC operates in four streams: global private banking, commercial banking, retail banking and wealth management and global banking and markets).

“One of the first things I did was sit down with the board and get sponsorship from Stuart Gulliver [the group CEO] to say: ‘We are going to do a full review. You need to be on board.’ Building those C-suite level relationships has been critical for success.” How do you do it well? “You have to be relevant. Demonstrate you understand the business. And it’s not just about understanding financial services; if you’re doing marketing or IT, you need to communicate in their language and understand their world.”

During a year-long cost-saving programme, Barto and her team took out $1bn. “We found [savings] all over the place: inefficiencies in processes, prices that hadn’t been reviewed for years, prices that had never been benchmarked…”

Procurement traditionally hadn’t had a great relationship with corporate real estate, so Barto made an effort to build that up. “Making sure we influenced and led RFPs for corporate real estate was a really big win for us,” she says. As a result, HSBC has had one global contract with Jones Lang LaSalle (JLL), as its sole global outsourcing provider of integrated facilities management services, since 2013. “To do that,” Barto believes, “you have to know your stuff and be credible. That takes research and time to understand the different commodities you’re dealing in. Talk about numbers, their suppliers, strategy and business areas. If we are putting in a 10-year contract, it has to be fit for the future, not just the next six months.”

After such success in the CPO role, when Barto’s thoughts turned to her next challenge she found herself at a crossroads. “There are two options once you’ve hit CPO,” she says. “You either do another CPO role elsewhere, or stay in the organisation and almost retrain to fit into the business in other ways.”

Considering herself “a commercial person through and through” and wanting to stay at HSBC, she approached the head of commercial banking to see if her skills could be of use in a different area, and was given a role as head of strategic networks – one of the firm’s 10 strategic priorities. Like most large corporates, HSBC can be siloed across businesses, countries and functions. Barto’s role was to leverage the value of the bank’s global network and encourage collaboration. She worked with local CEOs and leaders to set targets for cross-country and cross-business collaboration, to help spot new opportunities for the firm.

Her current role was one such opportunity, and something for which her previous experience could hardly have prepared her better. Client network banking leverages HSBC’s network to offer banking services to companies throughout clients’ supply chains. As these suppliers are often small and medium-sized businesses, they would normally not be able to access such a high-end service for a competitive rate.

“It’s about delivering value to a client’s supplier network,” Barto explains. “I’m now dealing with my peers, CPOs in client businesses, talking to them about the key drivers of their supply chains. Is it risk management or CSR, for example? [Client network banking] is about supply chain finance, but it’s also more than that. It’s getting the buyers to help us understand their suppliers and whether we can provide better banking services into their supply networks.”

This offering reflects the move towards stronger supplier relationship management (SRM) more widely, she believes. “While there are some companies – we had conversations with a large retail group, for example – who are not bothered about building supplier relationships and are purely aggressive on cost, the majority of organisations understand SRM. It’s not procurement 101 anymore, where you are just banging on the table and reducing costs. You drive much more value by understanding the end-to-end cycle of what your suppliers are doing and how it fits into your operations.”

Barto’s team is now working as far down as tier two and three suppliers in some programmes, exploring areas such as building supply chain management linked to sustainability indices and mitigating against risk by offering advice on working capital or lending. It means she is playing a significant commercial role in winning HSBC business. “It’s helping us know our clients better, so we can have higher-quality conversations,” she says. “There are examples where we’ve helped a client’s suppliers and off the back of that they’ve invited us to RFPs on projects we typically wouldn’t have been invited to.”

Where the role “fits perfectly” with her procurement expertise, is the understanding of how supply chains work, an essential skill. “I had to learn and I am still learning about banking and financial services, but there are a key set of skills that have been transferable: understanding international markets, working with international teams, understanding key procurement trends. I can take what I knew previously and apply it.”

She still considers herself a procurement person, and has joined the CIPS board as a trustee to keep up to date with the industry. “What you learn in procurement can be applied in other parts of the business without a shadow of a doubt,” she believes, adding: “I’m a positive thinker and I think the world really is your oyster if you’re prepared to take on challenges and constantly learn. Acknowledge you will be constantly learning, and you can do anything.”

Procurement, she says, is seen as one of the most commercial functions within HSBC, so perhaps it should come as no surprise that a former CPO is now leading a commercial area. However, she admits not all businesses are lucky enough to have a commercially aware and mature procurement function: “It’s scary, but there are still companies out there who don’t fully understand their spend.”

Just as Barto has always strived to understand the external factors affecting the business, right from that award-winning dissertation essay on supply chain disruption, she feels other procurement professionals should do the same. “There will always be things happening in the world that will drive how you work,” she says, citing cybercrime, financial crime, digitisation and disruption (from the challenger banks in her industry specifically) as examples.

“I don’t think a buyer’s job is ever done because so much changes,” she adds. “Look at Brexit and trade. Where are you sourcing things from? Typically it’s procurement that the C-suite are going to ask the questions of.”

Overall, she believes the procurement profession is “raising its head significantly”. “Most organisations now understand the value of procurement and realise that the business case stacks up. I think most CEOs get it now and there has been a shift in the understanding of procurement and its influence in the organisation.”

And if the profession can get more CPOs like Barto breaking new ground, then the future looks very bright indeed.

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