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Strategic Procurement
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‘We spend how much?’ is a cry I have often heard from a senior executive
the first time he or she finds out the true extent of his or her
company’s third-party expenditure.
Years ago, I asked the group finance director of a leading UK
financial services company how much his organization spent with
suppliers. He said that he didn’t know but that it wasn’t much because,
‘we don’t actually make anything. Don’t forget, Caroline, we are a
bank, not a manufacturer’. His company actually spent over £2 billion,
and that was in the late 1990s. What this very capable executive had
forgotten was that the bank had adopted (as most companies have)
the business mantra that it should focus on its core and get other
companies to take care of the rest. The bank therefore didn’t print its
cheque books, fill or service its cash machines, clean or secure its
offices, but paid other companies to do it. Nowadays I could add to
this list; for example, very few banks clear and process their own
cheques. Several others are not even licensed by their central banks
to distribute cash (a pretty fundamental process for a bank) but rely
on another company to have that licence and do it for them.
Caroline Booth - Personal Name
978 0 7494 6023 5
NONE
Management
English
2010
1-193
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