Agile Procurement in Financial Services
November 25, 2019

Ben Henshall
Red Hat

Share this

In today's ever-changing business landscape, more and more companies are operating like software companies. Through the adoption of agile technologies, financial firms can begin to use software to both operate more effectively and be faster to market with improvements for customer experiences. Making sure there is the necessary software in place to give customers frictionless everyday activities, like remote deposits, business overdraft services and wealth management, is key for a positive customer experience.

It has long been established that procurement is an important stage in the adoption of technology to drive innovative investments in the financial services industry. And just as the business looks to be more agile in the use of technology, the technology supplied need to be available to the business quickly. This gives way to the notion of agile procurement.

Agile procurement is the idea that the supply of technologies and the associated services can also be acquired in a flexible, agile manner. Agile procurement follows a similar principal as agile development and operations (DevOps) practices in that it introduces new policies and ways of working and can become a better means of accelerating procurement of next-gen applications. Agile procurement processes work to improve technology adoption to be more timely and in step with business and development teams. Indeed, improving collaboration across teams and improving technology vetting processes, policies and organizational barriers in this redefinition of procurement procedures.

In today's business landscape, it is important that companies work quickly and are not bogged down by long lead times and requirements gathering, slow feedback cycles, multi-tier governance and approval policies. And when these detriments to speed to market are combined, they can stymie company goals leaving customer needs unfilled. Agile procurement is focused on the longer term success and adoption of technology, focusing the results that can be gleaned from applying new, innovative technology in practice, rather than in concept. Starting with business and technology teams agreeing on a specific minimally viable product (MVP) necessary to reach the desired business outcomes, a portion of the procurement budget is used to acquire only the necessary technology to use in the pilot.

This more inclusive decision-making replaces process, focused on business outcomes counters traditional, central planning approaches and by default, makes processes more agile given all parties needs are included from the start. The focus is then able to turn to delivering code and features into a production-ready application within tight timeframes. During this process, development, testing and ops, in addition to an assessment of a technology's impact on policy, processes and people are considered, so that the impact of the application and associated technology adoption become integral to the pilot process. This in turn, alleviates the traditional after-thought of technology acquisition, namely adoption.

In order to have agile procurement, financial services first must ensure they have agile development in place — in fact the two, hand-in-hand makes it easier to be able to keep up with changing market factors and business requirements.

One of the main outcomes of agile procurement is that compared to traditional procurement methods, it results in lower procurement and production costs. It costs far less to make changes to MVP deployment done in a short production window (especially with a microservices approach) than one done over a longer period of time, using processes that don't account for micro-adjustments. This is partly because when agile procurement is in place, the organization can more quickly develop and deliver code, and the quicker code is delivered, the longer the company has to cross-sell and pursue other revenue-generating options.

Agile procurement can lead to positive business outcomes, and the culture and road to get there is quickly realized with the use of enterprise open source. Secured by design for organizations, enterprise open source is a path to new, innovative technologies. Organizations that have agile procurement in place can more quickly adapt to business change, solve shared problems faster and use open source standards to preserve business agility while cutting down costs and providing new innovations that can keep up with business needs and customer demands.

Ben Henshall is Senior Director, Financial Services, at Red Hat
Share this

The Latest

October 20, 2021

Over three quarters (79%) of database professionals are now using either a paid-for or in-house monitoring tool, according to a new survey from Redgate Software ...

October 19, 2021

Gartner announced the top strategic technology trends that organizations need to explore in 2022. With CEOs and Boards striving to find growth through direct digital connections with customers, CIOs' priorities must reflect the same business imperatives, which run through each of Gartner's top strategic tech trends for 2022 ...

October 18, 2021

Distributed tracing has been growing in popularity as a primary tool for investigating performance issues in microservices systems. Our recent DevOps Pulse survey shows a 38% increase year-over-year in organizations' tracing use. Furthermore, 64% of those respondents who are not yet using tracing indicated plans to adopt it in the next two years ...

October 14, 2021

Businesses are embracing artificial intelligence (AI) technologies to improve network performance and security, according to a new State of AIOps Study, conducted by ZK Research and Masergy ...

October 13, 2021

What may have appeared to be a stopgap solution in the spring of 2020 is now clearly our new workplace reality: It's impossible to walk back so many of the developments in workflow we've seen since then. The question is no longer when we'll all get back to the office, but how the companies that are lagging in their technological ability to facilitate remote work can catch up ...

October 12, 2021

The pandemic accelerated organizations' journey to the cloud to enable agile, on-demand, flexible access to resources, helping them align with a digital business's dynamic needs. We heard from many of our customers at the start of lockdown last year, saying they had to shift to a remote work environment, seemingly overnight, and this effort was heavily cloud-reliant. However, blindly forging ahead can backfire ...

October 07, 2021

SmartBear recently released the results of its 2021 State of Software Quality | Testing survey. I doubt you'll be surprised to hear that a "lack of time" was reported as the number one challenge to doing more testing, especially as release frequencies continue to increase. However, it was disheartening to see that a lack of time was also the number one response when we asked people to identify the biggest blocker to professional development ...

October 06, 2021

The role of the CIO is evolving with an increased focus on unlocking customer connections through service innovation, according to the 2021 Global CIO Survey. The study reveals the shift in the role of the CIO with the majority of CIO respondents stating innovation, operational efficiency, and customer experience as their top priorities ...

October 05, 2021

The perception of IT support has dramatically improved thanks to the successful response of service desks to the pandemic, lockdowns and working from home, according to new research from the Service Desk Institute (SDI), sponsored by Sunrise Software ...

October 04, 2021

Is your company trying to use artificial intelligence (AI) for business purposes like sales and marketing, finance or customer experience? If not, why not? If so, has it struggled to start AI projects and get them to work effectively? ...