Global

Details

  • Service: Advisory, Management Consulting, Business Performance Services
  • Industry: Financial Services
  • Type: Video
  • Date: 3/14/2014
  • Length: 3:42 Minutes

The Challenge of Transformation: Measuring bottom line impact 

Scott Wharton, Citi:

KPMG
cutting through complexity


EXECUTIVE TALKS


THE CHALLENGE OF TRANSFORMATION
Measuring bottom line impact


SCOTT WHARTON
Managing Director
Chief Procurement Officer
Citi


in conversation with


SAMIR KHUSHALANI
Advisory Partner
KPMG in the United States


THE CHALLENGE OF TRANSFORMATION
Measuring bottom line impact


Imperatives of transformation are often driven by current business dynamics


SCOTT WHARTON: At Citigroup, really the key imperative for transformation of the procurement function came back to the business dynamics that we find ourselves in, and this is common to all financial services companies at the moment where we continue to have revenue headwinds and an environment where driving positive operating leverage will ultimately come back to how effectively we obviously look at both sides of the equation, and importantly, from a procurement perspective looking more effectively at how we can drive efficiency in our cost space.


[00:01:00]


THE CHALLENGE OF TRANSFORMATION
Measuring bottom line impact


A tight linkage with Finance is critical to accurately track procurement value to bottom line impact


I think the second challenge, I would say, which was unforeseen, but then we’ve addressed it, is really drawing a tight linkage with the finance organization. Coming into this transformation process, what became apparent early on is that historically, procurement didn’t have a good linkage with finance as well as being able to articulate its value, and ultimately, what I mentioned before, being able to work with finance in tracing the value that we deliver through to P&L and bottom line impact, but we’ve spent a lot of time over the past six months or so working through that with finance and setting up processes that they’re comfortable with that we work on together month to month to actually track the impact of the works that the organization does.


THE CHALLENGE OF TRANSFORMATION
Measuring bottom line impact


Setting the right metrics and targets to capture the value added is imperative


We do have defined metrics and targets that we’re working to, and as multi-year metrics that we’re measuring ourselves against.


[00:02:00]


We’ve had to look very carefully at how we’re performing as a group, in 2011-12 when I arrived, and we’ve got objectives out to 2015 as far as how we want to drive the improvement of various metrics through that time window, and that’s beyond just the pure output of the organization, measures like savings. It also goes into the ROI, return on investment of the group, all the way through to the number of head count that we have sitting in low cost locations vs. high cost locations, which is going to be a measure of our actual operating efficiency itself, so there’s various metrics we’re tracking against.


THE CHALLENGE OF TRANSFORMATION
Measuring bottom line impact


Focus measurements not only on outcomes, but on the behaviors and values needed to accomplish them


SAMIR KHUSHALANI: There’s always this focus from a performance measurement perspective on outcomes. What they have talked about is not only looking at outcomes, but also looking at the behaviors and the values that needs to be measured, recognized, and appreciated in the performance management process


[00:03:00]


so that you can really create a culture so that people have a sense of identity about what they are, what they’re trying to do, and what they’re trying to accomplish. So that focus on the people, and a community, if you will, and a sense of identity was unique.


KPMG
cutting through complexity


[Disclaimer]
There has always been an intense focus on performance management outcomes, yet the focus rarely digs deeper into the behaviors and values needed to generate those outcomes. Scott Wharton, Chief Procurement Officer at Citi, discusses how his organization is recognizing the value drivers and behaviors needed to accomplish these desired outcomes. Wharton discusses the importance of building culture as the foundation to drive value.

Scott Wharton, Citi

Scott leads Citi Procurement Services globally. Prior to his current position, Scott led Citi’s Regional Corporate Services organization across the Asia-Pacific, which included Process Reengineering & Productivity, Procurement, Market Data Services, Global Event Marketing and General Services. Prior to joining Citi, Scott held the position of Asia-Pacific Region Head of Expense Management & Strategic Sourcing at Nomura, and had previously worked at other financial services companies in Asia-Pacific both as a senior manager and as a management consultant. Scott specializes in operations strategy, business reengineering and strategic procurement. He holds a Bachelor of Science from the University of Sydney, a Bachelor of Laws from the University of Technology in Sydney, an Executive MBA from INSEAD and an Executive MBA from Tsinghua University in Beijing.

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