S U P P LY C H A I N
Westpac New Zealand’s Procurement Transformation In association with:
Westpac and theÂ virtuous supply circle Westpac NZ, one of the countryâ€™s largest banks with over a million customers, is committed to improving the social, environmental and economic wellbeing of all Kiwis. Rob Halsall, Head of Commercial Services talks about the role of innovation, technology and data analytics in creating a virtuous supply circle.
It would be a mistake to think of Westpac in the same way as one thinks of the big global corporate banks, even though it is one of the ‘big four’ in Australia. For a start it doesn’t even sound like a bank, its portmanteau name, adopted in 1982 when it merged with a number of Australian banks, signifying the western pacific region rather than the finance sector. Westpac has been in New Zealand ever since it was founded as the Bank of New South Wales in 1861, and today Westpac New Zealand is the government banker as well as serving businesses throughout the country and more than 1.3mn customers. Talking to Rob Halsall, the bank’s Chief Procurement Officer (CPO), one quickly begins to appreciate why it is different. For a start, it is very closely aligned to the values that make New Zealand an outstanding place to live. That’s illustrated by three issues it places right at the front of its agenda – promoting electrification in transport, tailoring its services for people with dementia and providing equal opportunities to women, especially in leadership roles. The first of these is a passion of Westpac NZ CEO David McLean, who drives an electric car himself, and has joined a group of large corporations in committing the bank to a 30% electric fleet by the end of next year. Halsall himself is on the board of Drive Electric. “Transitioning to EVs is more complex than just ordering the cars: you have to take the infrastructure, people’s habits and preferences as well as total cost. At the bank we’ve been working on the project for the last 18 months.”
“The P2P system gives us a level of transactional data and insight that we didn’t have previously” – Rob Halsall, Chief Procurement Officer
Rob Halsall provides leadership in commercial management and sustainable supply chain solutions across IT and non-IT services within the Westpac New Zealand business. He has more than 20 years domestic and international strategic procurement experience within automotive chemicals, aerospace, telecommunications, tertiary and financial services organisations, providing leadership in business strategy, commercial project delivery and endto-end procurement services. This includes category management, strategic sourcing and integrated supply chain management.
Electrifying New Zealand’s oldest bank This year NZ’s oldest bank will electrify its fleet with NZ’s favourite electric vehicle, the Hyundai IONIQ. We couldn’t be prouder of Westpac New Zealand who are leading the way with their ongoing commitment to sustainability.
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Hyundai New Zealand has been partners with Westpac New Zealand for more than 10 years supplying more than 200 vehicles to its fleet. Today, Hyundai New Zealand is the preferred vehicle choice to provide the Electric Vehicles that will enable the Westpac New Zealand vision of converting 30% of its fleet to electric by 2019. As a partner to one of the oldest banks in New Zealand, Hyundai New Zealand has always strived to go above and beyond what is expected of a partner, and as champions of the Electric Vehicle industry in New Zealand, the company works closely with Westpac New Zealand on truly showcasing the viability of transforming a fleet to being Electric. With Westpac New Zealand’s transformation, Hyundai New Zealand
benefits from having a highly recognisable partner with a proven EV fleet solution that shows other customers electric fleets are a reality today here in New Zealand, not just in the future. Westpac New Zealand values the industry expertise Hyundai New Zealand provides. With Hyundai New Zealand being 100% Kiwi owned, it ensures Westpac New Zealand has the support and
information it needs as well as a New Zealand based customer support team. With the ever-evolving process of transformation, Hyundai New Zealand shares its experience from similar rollouts and provides invaluable learnings from these to support Westpac New Zealand with navigating the complex, yet highly rewarding process of having an electric vehicle fleet.
FAST FACTS >> The Hyundai IONIQ is the bestselling New Zealand new electric vehicle in the market due to its range of over 200km, practicality, styling and is backed by a 10 -year unlimited KM battery warranty. >> The Hyundai IONIQ is the only model in the world that offers three separate drive trains which provides flexibility and versatility for fleets. >> All Hyundai New Zealand EV dealerships are required to undergo a specific training programme and cerfification around Electric Vehicles. >> The Hyundai IONIQ was the 2017 winner of ‘NZ’s favourite electric vehicle’ Fairfax New Zealand, ‘Best electric vehicle’ – NZ Autocar, ‘Small Car of the Year’ Company Vehicle, ‘Motoring Green car of the year’ - NZ Herald Driven, ‘Best in class - EV/Plug-in Hybrid’ - AA Motoring, ‘Supreme Winner’ - Women’s World Car of the Year and DriveLife’s ‘Eco Warrior’s’ Car of the Year.
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Halsall is in his fifth year with the bank, and recently awarded Ernst & Young New Zealand Procurement Professional of the Year’ for 2018. A native of Belfast, he has over 20 years’ experience in procurement and supply chain management, 11 years of which were in manufacturing across telco, automotive and aerospace, with a further five years in tertiary before entering the financial services industry. Halsall joined the Westpac Group in Australia as Director of Commercial Services in 2014 and in 2016 he jumped at the chance to move to New Zealand when offered the role in Auckland. On his arrival in Auckland, he found a procurement culture that worked well, but needed to refocus on the basics which he thought necessary to support the bank through the next phase of its growth. “Before we could embark on full scale transformation, we had to get the basics right, and for me that meant looking at the core dimensions of our operating model and re-establish the purpose and value proposition of the function.”
His strategy for changing the operating model was formulated under â€˜eight Psâ€™:
1. People (capability maturity, learning & development roadmap, improved engagement);
2. Product (what are our core products and services and do our stakeholders understand them?);
3. Process (are the core processes effective and do business partners understand them?);
5. Partners (the approach to internal business partner management and external supply partner management);
6. Planning (collaborative cycles, to cocreate on innovation, for example);
7. Pace (the rate of change and the cadence, or rhythm at which the business can regularly and consistently deliver projects that effect change);
(the right data, document and information management tools, 8. Progress source-to-manage, and simple (measuring everything so that task automation); all processes can be evaluated, Voice of Customer, Voice of Supplier, Value Creation).
“These are the lenses I tend to use to examine our current state and where we need to be heading. When I joined the team there was room for improvement under all of these headings,” Halsall says. “Today, data is like oxygen to any business. From a Procurement specific perspective, we have moved over the last 21 months from a data poor, insight poor position to one where we are richer on the data side and have created more insights through the use of analytics.” The science of procurement is all about data and making the right choices based on the insights that the data provides, he believes. The art is the narrative around the data and the change it suggests.
“We focus heavily on both those areas. We built a repository of spend, contract and business unit data that we could interrogate and visualise using a Microsoft product that was available to us in-house.” The painstaking task of building a database and a data analytics structure has resulted in far better transparency across the supply base and the spending patterns of the bank. Not so much cost reduction, Halsall says, as cost management; enabling movement from the reactive to the proactive. “At the very least, we are now able to say that we know what we don’t know.”
“Before we could embark on full scale transformation, we had to get the basics right, and for me that meant looking at the core dimensions of our operating model and re-establish the purpose and value proposition of the function” – Rob Halsall, Chief Procurement Officer
The data analytics structure is complementary to Westpac’s new networked Purchase-to-Pay (P2P) platform. The Basware system was introduced in 2017 and has made a big difference. “Until then, the bank didn’t have a P2P system. It gives us a level of transactional data and insight that we didn’t have previously and it has also allowed us to create supplier payment efficiencies, something that is of the first importance to them.” Another direct benefit of implementation was to rationalise the bank’s supplier base by 40%, with a further consolidation planned by 2020, Halsall adds. As a career procurement professional, Halsall naturally looks at ways to raise the profile of the team. “In my experience, it’s a question of overcoming any apathy that June exist towards procurement by demonstrating
its value to stakeholders.” By rebranding the Procurement function to Commercial Services, he signalled his determination to move away from being viewed purely as a sourcing function to a trusted advisor to all the business units. “We have definitely increased our strategic role. The engagement at executive level is higher than it has ever been before. Collaboration with our key business partners on planning and identifying key projects is now embedded, where even a year ago it was minimal.” Procurement is now accepted by the executive leadership as a contributing partner in commercial decision-making. It is also seen as being more digitally enabled with improved operating disciplines. His team works very closely with the Technology team.
PARTNERSHIPS IN FOCUS
Hyundai provides Westpac New Zealand with corporate fleet vehicles including electric vehicles (EVs). The company also provides thought leadership on the motor vehicle industry with a particular focus on EV adoption. Halsall adds: “The partnership with Hyundai has delivered great outcomes for Westpac New Zealand, they go above and beyond continually across all aspects of their service delivery and have been instrumental in Westpac being able to bring its sustainability agenda to life. “Hyundai and Westpac New Zealand have partnered as champions of electric vehicle adoption and the partnership will continue to evolve over time as Westpac New Zealand’s fleet becomes more sustainable.”
DXC provides document composition and multi-channel distribution, digital archiving, cheque processing in addition to development and maintenance services for a number of our core technology platforms and is pivotal to our ability to deliver financial transactions, account statements, and online banking services. “The partnership between Westpac New Zealand and DXC has delivered significant benefits to both Westpac New Zealand and its customers,” Halsall says. “Benefits include resource augmentation of specific skill sets (such as Java developers), alignment to and actively supporting Westpac New Zealand to embed an Agile methodology, driving transformation activities to position Westpac New Zealand as an innovator in the New Zealand banking industry and providing the flexibility enabling Westpac New Zealand to respond quickly to change. “DXC and Westpac New Zealand regularly collaborate to plan and refine the road map for continuous improvement and next generation banking, made possible due to the open and honest communication of our respective business strategies and the likely impacts on the other party.”
FCM provides customised, end-to-end travel management services to Westpac, from online/offline travel bookings through to strategic account management, providing global insights and innovation. Halsall comments: “FCM provide Westpac with a market leading service experience for corporate travel, including any bespoke event management requirements. They also service our customers as our exclusive hotpoints travel partner. FCM always go the extra mile whilst challenging the status quo and offering continuous improvement opportunities. “The partnership between both parties has grown and developed over several years. Westpac New Zealand and FCM will continue to innovate and work together to achieve mutually beneficial outcomes on both strategic and tactical initiatives and further embed our long standing partnership.”
Westpac New Zealand
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Fortnightly meetings to define priorities and shared targets have been so successful that the same style of collaboration now takes place with the operations and marketing teams. “IT, analytics, artificial intelligence, simple task automation, IoT and cognitive technologies mean the workforce of the future will do things very differently,” Halsall says. “Speaking as a procurement professional, I will be very surprised if around 40% of the tasks we do today cannot be automated or completed by cognitive systems within the next five years.” The profession will look different too. Halsall anticipates that relational, social and commercial skills, and the ability to think and act strategically, will take centre stage. “For me, procurement is about being a trusted advisor to the business: a commercial advisor delivering innovation and relationships for our market but also leveraging the technology so we can do our job faster and smarter.”
It’s a deep and ongoing change management process. Weekly 30-minute sprint sessions on relevant commercial and continuous improvement topics were introduced to leverage and transfer collective knowledge and create project delivery efficiencies. In practical terms, we have been able to understand who has experience in a particular subject area and we have created a knowledge hub within our team so everybody can benefit from that material and is key to the development of the team. Halsall also engaged ArcBlue, a specialist procurement consultancy and training provider and CIPS partner, to complete a competency assessment resulting in the delivery of technical training aligned to professional development goals within the function. The team also worked on a Vendor Open Learning Tribe (VOLT), a concept designed in partnership with the internal Technology business unit leaders to accelerate innovation with supply partners.
Over three days, business units within the bank were invited to pitch challenges to key suppliers, who then came back with solutions. “VOLT was actively co-creating innovation, and it is amazing how quickly that can happen if you establish the correct forum,” Halsall comments. “We learned a lot from this experience and have plans to build on this in the future”.
Work in progress for his team is to continue to deliver commercial outcomes for the business, and deepen collaborative working with internal partners and external supply partners. Halsall intends to continue working on analytics using Microsoft Dynamics and Power BI data visualisation, exploring machine learning options and leveraging the LinkedIn ‘XRM’ functionality to improve the bank’s approach to supplier relationship Supply chain transformation management. Then, finally, there’s means having a greater sustainability. This is definitely a partnership with fewer suppliers supply chain matter, says Halsall, and doing it in a more collaborative from realising the NZ Chief way. Internally, implementing a Executive’s vision to convert 30% new intranet and the P2P system, of the fleet to electric by 2019, rebranding the function and kickto Westpac’s global responsible starting innovation in just one year, sourcing initiative, which aims to is something Halsall says would ensure that all suppliers meet have taken three in any other required ethical standards. “The organisation he has experienced. sustainability agenda is huge. “We have introduced rapid We’ve been leading the way in transformation into the team, sustainability leadership and and that was necessary because we remain a leading sustainable we had to build agility and bank globally. Our aim is to build effectiveness into our operating on what we’ve achieved and to model. We measure employee continue meeting our sustainability engagement using a global targets. benchmark, and over the last year this has risen by 23% and is now above the global benchmark we use within the group.” 25
“We believe that by working with other public and private partners in New Zealand, we have the opportunity to create a body that will help supplier diversity, including Maori suppliers in New Zealand” – Rob Halsall, Chief Procurement Officer
For Westpac NZ, a progressive procurement and sustainability objective, and passion of Halsall’s, is creating more opportunity to recognise and build on our supplier inclusion and diversity including Maori, as the country’s indigenous population. “We are working with partners to establish how we can develop a supplier database that would include Maori suppliers, categorised in a way that will allow all procurement practitioners within NZ to understand their services. New Zealand doesn’t have an equivalent to Australia’s Reconciliation Action Plan targets, or Supply Nation. However, we believe that by working with other public and private partners in New Zealand, we have the opportunity to create a body that will help supplier diversity, including Maori suppliers in New Zealand.
“We held a social procurement symposium in July 2017, with 200 local community leaders, procurement leaders and suppliers. We invited CPOs from telecommunications, banks, insurance, government and other community partners including Auckland Tourism (ATEED), Air New Zealand, Auckland Council, and also the chief executive of Supply Nation, to help share interest and knowledge in this area. The entire catering and product placement was provided by diverse local Maori and Pasifika suppliers.”
Westpac New Zealand Westpac New Zealand Limited 16 Takutai Square Auckland, 1010 New Zealand Tel. + 64 9 912 8000 westpac.co.nz
Business Chief - ANZ