Hitting the procurement trifecta : How FHLB San Francisco transformed and aligned procurement, risk and diversity in the middle of a pandemic

Procurement transformations involve a strategic review and realignment of an organisation’s procurement function to address critical operational gaps. This paper focuses on the execution of such transformation activities within a heavily regulated financial services organisation that faced several internal and external gaps. Gaps included a heavy reliance on suppliers to maintain critical operations, increased regulatory oversight and a lack of standardisation and organisational integration within the procurement function needed to service internal customers. A successful transformation for such an organisation required a focus on three primary pillars (workstreams): procurement, supplier diversity and supplier risk. Each workstream addressed a unique set of challenges and, as such, were carried out independently; however, the interrelated nature of these challenges called for strong planning, shared resources and parallel efforts. The results of the initial gap assessments showed a need for procurement team right-sizing (in terms of resources and role definitions), a revision of core policy and standard operating procedures, and a re-evaluation of the technologies that supported both procurement operations and regulatory reporting/compliance. The transformation, embodied by the three pillars above, addressed each of these gaps. This transformation began the reimagining of the procurement function but work in this space is ongoing. Requirements around third-party risk management, supplier diversity and the regulatory landscape will continue to shift and evolve. Regular monitoring of the effectiveness of this transformation must be conducted, and strategic pivots and change management efforts must be undertaken to ensure long-term success.