Credit Suisse – Creating a twin engine on the journey to procurement excellence

Daniel Helmig

Credit Suisse was founded in 1856 to fund the development of Switzerland’s rail system. A lot has changed since then with the Zürich headquartered global investment bank and financial services firm now represented in every major financial centre globally.

Daniel Helmig has spent an illustrious career within the procurement and supply chain arena. A career forged across numerous industries, continents, with differing degrees of scale and complexity. Daniel has a well-deserved reputation as a transformation leader automotive, semiconductor, automation, and electricity, FMCG & now banking industry. Daniel joined Credit Suisse in early 2021 as the banks first non-banking Head of Procurement with the goal of establishing a procurement function with significant value generation at its heart. Daniel provides detail on the ongoing drive to procurement excellence within Credit Suisse whilst offering a small insight into the philosophies of a dynamic CPO.

Daniel, you joined Credit Suisse in January 2021 as the organisations first non-banking Head of Procurement. What remit were you set?

In general, it helps to have a supply chain executive from outside an industry, to assess the capability of the current procurement processes and organization, whilst identifying a way forward in line with cross industry benchmarks – not just banking. Every industry I joined over my career, I joined as an outsider – able to blend what I have learned with the new industry practices. With this in mind, from the outset, we wanted to create real, measurable impact for the bank.

Click below to view the digital brochure version of the Daniel Helmig, Credit Suisse content

The need to transform and create a procurement function that could deliver value was made clear from day one. How did you set about the task of gaining a real understanding in those initial weeks?

When you come new into an organisation, or even a new industry, I always find it helpful to listen closely to all stakeholders without jumping to conclusions. In the first 100 days, I introduced myself to all relevant senior executives, their COO’s, CFO’s, and function heads. We spent our time focusing on what they needed, and what they saw as positive and less positive, around supply chain and procurement.

What I really liked was the complete openness for any solution that we would later come up with. I was impressed by the “open doors” I found with all leaders in Credit Suisse – they were very direct about the gaps they saw and interested in what we could do to close them. I also met every procurement employee in small skip level meetings and again, let them openly speak in these sessions.

After having had over 100 individual listening sessions, I felt that I had a pretty good understanding of what worked well, and what opportunities existed. I shared my summary with the procurement leadership team, and we took time to develop a book of work to address what was needed. We then went back to the leadership team to inform them of what we had planned, and again, I was impressed by their openness to change.

By the end of March 2021, you had a clear understanding of the task at hand and concluded there were two paths the bank could take in addressing the procurement conundrum. What did you identify as the possible next steps? When you presented your findings to the executive how was it received?

By the end of March it was clear to me that we had a well-educated, motivated workforce in procurement and a bench of best-in-class IT systems (iValua, Coupa, Sirionlabs), but coupled with a lot of opportunities to drive more performance out of a tightening of the process and competency models.

The question that emerged was, ”Do we want to build up performance and capabilities internally, or can we leapfrog forward by aligning with an external BPO provider?”

Since I didn’t know at that point in time which direction we would go, we ran a dual strategy. We created a project called Top I (or ‘base camp’) in which we defined all the steps that were needed to get procurement to the next level. It included a book of work along the dimensions of people, process, and technology. Examples include setting up a training curriculum that was linked to a competency framework and a job catalogue (people). Defining essential procurement policies starting with an internal customer aligned savings guideline (process), and a data lake that contained all data from all procurement systems, to create needed transparency and analytics.

Furthermore, we started a parallel project called Top II (‘peak’), in which we defined the main elements of what made an excellent procurement organization. We invited three BPO providers from three continents to; a) provide us an overview of what is possible (RFI) and then later b) respond to our RFQ, including a detailed statement of work. Here it was helpful, that our sourcing experts and their colleagues in HR, GC, etc. were well versed in BPO deals in Credit Suisse. If that would not have been the case, we would have invested in procurement consultancies to bring in this specialised expertise. This kept us busy over the summer, and by fall, we knew what we wanted to do based on the facts we gathered.

Premier content sponsor SirionLabs

How did you move from an understanding of the solution to getting buy-in across the firm?

Before getting buy-in from the firm, we needed to get buy-in from our own procurement leadership and establish, what “good looks like”. They needed to un-learn, emphasize current strengths, or learn anew. We had over a one-month period weekly “virtual fire side chats” (with an actual fire video playing in the zoom background). Here we covered all major aspects of what a procurement team should focus on in a new and improved set-up, how to manage suppliers and supply markets (including supplier classification, market intelligence), how to support internal customers, and how to manage ourselves.

Having aligned the leadership team inside procurement, they aligned with their teams, who then slowly started changing the way they worked with the rest of the organisation. The project on potential outsourcing, went from RFI to RFQ towards final pitches in three months. By October, with ample upfront alignment with the main stakeholders, we presented our proposal for procurement and procure-to-pay transformation to the Executive Board (ExB). By this time the outsourcing topic became one of several cornerstones in moving Credit Suisse to the next level of excellence in managing external supply chains – a real transformation.

We were able to show that only a combination of approaches of both internal (group policies, no PO, no Pay, standardisation and centralisation of procurement activities, and significantly embracing competitive sourcing) and external (opening up to the opportunity of higher economies of scale and skill with BPO providers) could bring a step change level of value generation to the bank.

Since the potential outsourcing recommendation was based on the review and evaluation of a cross- functional team with representatives of all main customers and partner functions, we had wide alignment across the firm, which led to a full approval by our ExB.

You went into the ExB with a recommendation of Chain IQ as your outsource partner. Talk us through the opportunity this outsourcing can create. What will the function look and feel like from 1st April?

We saw in Chain IQ a supplier ticking many of the boxes we were looking for. Foremost the value delivery, but then as well a great digital ecosystem, good understanding and track record of risk and control in the banking environment. Last, but by no means least, a high alignment on cultural aspects as a Swiss and Global company.

We worked with Chain IQ to establish a very comprehensive contractual framework, which we concluded 2.5 months after the go-ahead of the ExB. During this time the phrase “twin engine” was coined. We saw Credit Suisse procurement moving from a single to a dual value engine, generating much higher “torque” performance for our divisions and functions. Staying with this engine metaphor, you can make many topics easy to understand. To ensure performance, fuel (= information) needs to run freely between both engines. Both engines have to run in sync (so good alignment and governance), otherwise you fly in circles, or worst case, into the ground.

In the first quarter of 2022, orchestrated by Kevin Hagues, (a Transformation Manager with vast experience with similar outsourcing exercises in banks and insurances), we ran multiple work streams, “co-piloted” by each member of the Credit Suisse procurement leadership team and their counterpart in Chain IQ. The process was monitored under the watchful eyes of a cross-functional steering team including members from IT, HR, General Counsel, and Risk & Control, which provided invaluable support and direction. This process approach went through all layers, so even the Group CEO from Chain IQ, Marcel Stalder, as well as other members of his leadership participated and monitored progress in the STECO.

On April 1st, six months after the ExB approval and three months after contract signature, we went live, passing another milestone on our journey. All Credit Suisse buyers in focus started in their new offices at Chain IQ. Since then, we have moved to the ramp-up phase, which we defined for six months. We will use this time for calibration and adjustment to get the optimal performance, and an excellent smooth-running operation.

Supporting partners – UL & Sourcing Champions

Credit Suisse has a very strong and capable IT brain. This capability is vital to the speedy roll out of the transformation strategy. In what areas particularly are your IT function empowering procurement to achieve and potentially go beyond expectations?

T is both our largest internal customer (normal for a top financial institute), as well as an indispensable provider of solutions for us. Our internal Digital Excellence team in Procurement works hand in hand with our IT colleagues.

Over the years, my predecessors acquired a benchmark solution portfolio with iValua, as our requisition to source solution. SirionLabs, covering our contract management, and Coupa supporting us on the third-party risk management side. In addition, we linked in solutions such as Cirtuo, the leader in Guided Supply Strategy Development, and SmartCube, providing us Market and Supplier Intelligence. Instead of creating now intense API connections between all systems, we decided to consolidate all data into a data lake, which we named “The Ark”. The Ark contains the second most valuable asset we have, data. Second most important asset, since people will always be the number one asset in Credit Suisse.

With the help of Credit Suisse’s excellent data scientists, we elicit information from the data, which creates the baseline for insights for us and our stakeholders. We use a Microsoft Power BI reporting infrastructure to give stakeholders along the value chain the transparency they need to have for their work with a clear focus on self-service. We are not done here, but rather than long development cycles, leaving us and our customers without insights, we use agile development to provide iterative improvements to the organisation.

The past twelve months have seen the road map confirmed, structures aligned, and a new procurement outlook on the horizon. If we were to speak again in 12 months, what do you envisage the function will have achieved and what will be the next steps?

At the time of this interview, we are in the ramp up stage of our new twin engine. Next year I expect that we will be in a stable operational set-up with Chain IQ, having linked their digital ecosystem with our data Ark to gain even further insights. We should have an internal procure-to-pay process that operates at new performance levels, satisfied internal customers based on a service level they never have received from a procurement organization in Credit Suisse, and a highly motivated staff on both sides of the twin value engine, that works and plays well with each other.

You have a deserved reputation as a leader who can drive transformation, efficiently and effectively. What is the key to your speedy transformation roll outs?

In his latest book “What it takes”, Stephen A. Schwarzman, the Blackstone co-founder and chairman, writes, and I paraphrase: If you are convinced of a deal/project, and you can do it small or large, do it large. At the end you will invest nearly the same resources and energy, but the outcome is greater.

That struck a nerve with me. When I look back at the change projects and transformations, I have been involved in over the last 35 years, I never backed away from large projects, when we were convinced of the solution, and if there was a great team that could be trusted to get the job done.

The rest is active listening rather than talking, communication, stakeholder involvement, a clear mandate from the top, diligent planning and relentless tracking at the lowest possible level. And here is another quote that I like, this time from Thomas Edison: “The reason most people do not recognize an opportunity when they meet it, is because it usually goes around wearing overalls and looking like hard work.” I guess in the end, my colleagues and I enjoyed working hard.

Similar Content: KPMG Procurement – Creating Agility & Value