TSYS recently brought on Walter Taylor to serve as the company’s global chief procurement officer. Taylor spoke with MPD CEO Karen Webster on his new role with TSYS, and how he is working to develop innovation through the aggregation of information in a way to help businesses find success.
According to Taylor, the regular day of a global chief procurement officer has definitely evolved over the last few years, especially with financial services. He explained that those in his position are very dependent on key third parties. Also, the regulatory environment itself has changed, which will in turn affect how he approaches the procurement process. .
“But one thing I have to do is make sure each line of business – each business segment if you will – they’re dependent on suppliers [and] third parties, just like they’re dependent on their people and the budget,” Taylor said. “So I have to make sure they have the right supplier portfolio to meet their needs with the right risk-reward balance.”
According to Taylor, there are two things organizations like TSYS need to do well in order to ensure a smooth due diligence process. There must be both a strong a process in place and the right program established to make sure the correct due diligence occurs for each business. Essentially, it’s about monitoring risk, he said.
“We have to monitor the company as an entity and make sure they’re always financially viable and they’re tracking toward their strategy, because we’re dependent on their strategy.”
Tools Are Not Equal To Process
While TSYS wants to empower consumers with the convenience, security, and freedom to be self-banked, Taylor underlined the importance of the process. While new tools and technologies are popping up that help make the diligence, compliance and onboarding process easier, it doesn’t mean anything unless the time has been taken to see what each individual business needs. Essentially, the technology enables the stuff that the process defines, he said.
“The key is how you build your program, how you build your process,” Taylor said. “What is important to TSYS is when we provide ongoing oversight. That’s what’s critical. The tool just allows you to do that, and it becomes a repository for this information and the means to track it and report on it.”
Taylor added that TSYS isn’t building manufactured goods where the physical supply chain becomes very important. His firm is also not doing reverse logistics, where big industrial companies will pull components off and run them back through the logistics and manufacturing process where you need to have sophisticated planning tools. Even so, there are key things to keep in mind.
“We have to plan for what we consume with a vendor but it’s not as complex,” Taylor said. “Due diligence and oversight of each supplier is most important.”
That’s not to say that Taylor doesn’t have ideas up his sleeve for something physical that can help companies through the procurement process.
The new TSYS exec explained that one project he will begin soon is building a program for all third-party due diligence and oversight. Taylor said that his company is going to begin with just traditional suppliers, but the program will be broadened.
What Does TSYS Look For?
So what exactly does TSYS require from a supplier, to guarantee that it meets their expectations? According to Taylor, he’s going to be focused on the financial liability of a third-party. That area will tell how strong a firm is, and what the probability is of the company meeting its own strategy expectation.
“It does take an investment to meet any type of strategy you have ‘sold’ to your customers,” Taylor said.
A company’s size doesn’t necessarily affect its likelihood of success, Taylor explained. The process – for the most part – doesn’t vary too much due to an organization’s size. What’s more important, Taylor said, is the ownership, and whether or not the company is public or private equity based, for example.
It’s not a deal breaker if third parties have audit issues, Taylor said, because what he is looking for is how well companies remediate those issues and if they have or have not repeated them. Essentially the whole procurement roadmap is what needs to be investigated.
“We’re an extension of these financial institutions,” Taylor said. “We’re an integral part of their supply chains. We have to be able to plug into these vendor management programs on the customer side and we have to be able to show we can develop and execute a strong vendor management program with our third parties because they become basically fourth parties for our customers.”
Put simply, innovation happens through the aggregation of information. With that “tool” in place, TSYS plans to help businesses of all sizes find success.
To listen to the entire podcast from TSYS’s discussion with PYMNTS.com please click here.