Innovations in Third Party Management: Bank of Montreal

Posted: 10/14/2022 - 11:17
Innovations in Third Party Management: Bank of Montreal

This October, the Future of Sourcing Awards will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations. Learn more the team at Bank of Montreal, their third-party management strategy, how they approached their indirect procurement function, and how they assess risk.

Can you outline why your team embarked on this project and the problem that needed to be solved?

Diversity and Inclusion are key pillars of BMO’s commitment to boldly grow the good in business and in life. While BMO had a well-established supplier diversity program in place, in 2021, the team took the opportunity to assess the strength of the program and more specifically, BMO’s ability to make an impact with our diverse supplier community. That’s when we decided that we were missing a diverse supplier development program, and so BMO Elevate was born. 
 

How were things done originally and what was the inspiration to innovate the process?

As mentioned already, initially, BMO did not have a Supplier Development Program at all. BMO Elevate is the first such Program of its kind at BMO. We found that creating a way to ensure that diverse suppliers had access to key opportunities as well as giving these suppliers the development support required to meet the needs of a large complex organization was an area where BMO could do more. This in turn would support BMO’s focus to dedicate more spend to diverse-owned businesses. As a result, we piloted and subsequently formally launched BMO Elevate. 
 
 

What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)

Outcomes are measured based on BMO’s Diverse Supplier Spend targets. We are proud to say that although we are not yet fully through the 2022 program, we have exceeded our overall increased spend targets with the cohort of suppliers and currently moving into the mentoring stage of this year’s program to help drive better connections and further opportunities. 
 
When we set out to create BMO Elevate, we did not know what to expect. Today, BMO Elevate is a 10-month, invite-only program for executives of a small group of diverse-owned businesses selected through a thorough process of assessing BMO’s priorities, key spend categories and business opportunities and then defining a list of suppliers who can meet those needs and where the current relationship, if any, has potential for growth. The program’s success exceeded all our expectations. 
 

How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?

Any program is only as good as the value it adds. So, while we do look externally to see how similar programs are designed and continue to reimagine what greater impact can look like, our suppliers and our businesses are critical to the process in telling us what value they see and what we can do more of to make it successful. We are committed to evolving the program based on the feedback and needs of the participants.  
 
We have taken a number of steps to ensure that both BMO and our participant organizations will continue to see benefits from the program well into the future. This includes external branding for the program to create awareness and engagement on our external website and information on how diverse businesses can work with BMO, influencing the Canadian Supplier Diversity landscape through a Supplier Diversity Roundtable where we intend to have our BMO Elevate participants share their views as diverse suppliers about what corporations and governments can do to better support diverse-owned businesses, and calling upon a BMO Elevate supplier to join a BMO Enterprise Supplier Diversity Council meeting to present on their business and the relationship with BMO.
 

What advice do you have for those who may want to implement this innovative approach in their own organizations?

We have seen firsthand the benefits of this program, both for BMO and the suppliers we work with. Customers want to do business with companies who are leaders in D&I. BMO Elevate represents a strong commitment to these values, that makes our customers and business partners proud to work with us. In addition, BMO Elevate helps create a more competitive marketplace for diverse suppliers, something that BMO can take advantage of through excellent new supplier partnerships, helping us to strengthen our supply chain and create lots of value for the bank. Having seen what programs like this can do for the market as a whole, we believe that it is in everyone’s best interest for more companies to build and implement similar initiatives.
 

How did your team assess the risks/potential for your third party management strategy?

To ensure the program was valuable for our suppliers and BMO and continued to grow in impact, as well as to assess any potential risks, we obtained direct feedback from participants and supporting BMO Executives following a pilot program in 2021 that largely influenced the formal program in 2022. This gave us real time knowledge of what was working and where we could improve, as well as allowing us the latitude we needed to change course quickly if any potential risks were identified. 
 
This approach has been incredibly successful, and seeing the program become embedded as a pride point for our leaders, employees and suppliers has been inspirational for us. Having suppliers comment about the robustness and thoughtfulness of the program, seeing the BMO Elevate program name recognized in broader conversations, having leaders in the organization reach out because they want to be a part of the efforts and seeing these diverse-owned businesses grow their relationships means we are achieving what we set out to do: drive our Purpose to grow the good, ensure fair access to diverse-owned businesses and see those relationships thrive.

 

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The 2022 Future of Sourcing Awards recognizes organizations and individuals that show innovation, leadership and transformation in categories that are critical to the sourcing industry. The Awards will take place on October 19, 2022, the capstone evening at the SIG Global Executive Summit. Attendees will enjoy dinner, networking and an awards ceremony that brings together some of the brightest minds to ´╗┐create a truly remarkable experience.