BMO Employs Supply Chain Management

Buying supplies just got easier at Bank of Montreal, as it rolls out a new online procurement system powered and hosted by Oracle.

According to Karen Rubin, vice president of strategic sourcing at the Toronto-based institution, the bank is targeting all buying across the organization for efficiencies, vendor consolidation, better pricing and relationship management.

"We expect the chief savings to come through process improvement and automation and we're beginning to unearth those as we slog through the enterprise business unit by business unit," said Steve Pare, team leader, e-procurement at BMO.

BMO, which buys more than $US1.2 billion in goods and services annually, had already consolidated its vendors and wanted to become more efficient in its purchasing by introducing an end-to-end technology solution that covered everything from catalog, order, receipt and payment. "We wanted to work smarter and faster with existing suppliers," said Rubin.

The bank needed an integrated system. It selected Oracle iProcurement, part of the Oracle Applications suite. iProcurement standardizes purchasing processes and allows users to serve themselves and search catalogs to order items.

The bank also implemented Oracle Accounts Payable, Oracle Fixed Assets and Oracle Internet Expense.

The new system will allow BMO to better understand its suppliers and where its money goes, especially when it comes to small-ticket items. That should in turn allow the bank to fine-tune its purchasing processes across its 30 different business units and leverage more savings.

For example, Rubin notes, the bank has 1,200 branches and they're always buying flowers for customers. "We've never been able to get at that dollar value to make it a worthwhile sourcing exercise. Now we'll have consolidated capabilities to get that information and maybe do a deal with (a supplier) that we couldn't have done before."

Testing started last October in the 50-person network and systems group. "We were able to ramp up all our processes," Rubin explained.

Pare said the bank didn't want to "bite off too much at one time." Now it's ready to commence rollout across the organization and into its U.S. subsidiary, Harris Bank.

The Web expense reimbursement application will have the most users, with about 10,000, but the entire system will be available to about 33,000 employees across the organization.

Pare said that BMO would be able to unearth opportunities for purchasing that it wasn't aware existed and "take that extra little bit out of our contracts."

By directing more volume to some suppliers and making it easier to transact it might save up to 2% off the price, he estimated.

He added that by using Oracle.com as the host, we "haven't shoveled a lot of money into some servers and then rushed to repay it."