In August, SRM marked its 25th year of providing organizations with the experience and information required to optimize their contractual relationships with vendors. Although we’re far more focused on serving our clients in the present and expanding the reach of our expertise in the future than we are on our past accomplishments, it’s gratifying to be reminded of the positive impacts we have delivered to our customers over the time we have been in operation.
Over the past 25 years, our team at SRM has delivered more than $2 billion in cost savings and/or new revenue to our primarily financial institution (FI) clients, and this figure has been increasing rapidly in recent years. Our success from the beginning has depended on our continued investment in maintaining strong business relationships and the power of referrals from satisfied, long-term customers.
The Power of the Pivot
My father, Curtis Downs, started SRM in 1992 [I joined him the following year] armed with a concept for operational efficiencies honed from his experience in the pharmaceutical industry. A local Memphis area bank caught wind of his model and asked whether it could be applied to financial services, as well. Being an entrepreneur, my father recognized an opportunity and shifted his attention to explore the nuances of the financial services vertical. Sure enough, the business model did translate and Curtis was able to identify savings opportunities for that first bank. That success gave SRM its first referenceable client and the cornerstone of its bank and credit union area of practice.
Today, our successes include FIs of all sizes, from under $100 million to $200-plus billion in assets. In addition, our manufacturing division continues to grow migrating from pharmaceuticals into areas like food service, corrugated packaging and shipping. These trajectories are evidence of the power of that pivot made by my father when the business was in its infancy.
Pioneers in a New Service Area
When we opened our doors in 1992, the very idea of engaging an independent contract advisor was not yet an accepted practice in banking or, frankly, any other industries that we were targeting. As margin compressions increased for banks and credit unions and they increasingly came to depend on a growing set of mission-critical vendors, the service we pioneered has become the norm.
Payments represent a perfect example of this evolution – 25 years ago, U.S. paper check volumes had not yet peaked. Since then, we’ve progressed through imaging technology; the mass adoption of debit cards; and are now seeing the early stages of a large online and mobile replacement cycle. At the same time, new software categories are emerging to enable important functions like loan origination. These are all highly valuable services that FIs must implement, or at least evaluate. Given constrained resources, they cannot expect staff to become experts in all of these fields or to fully grasp prevailing market economics for all of these services. Engaging outside support has become a necessity – and one that can easily pay for itself.
As with any business that has been able to operate successfully for decades, there are many moments that have become part of our firm’s narrative. One of my favorites centers around the first FI we signed in Texas. The bank was very influential in the banking association that served the state. I still remember him telling me, “If this goes well, we’re all going to do well. And if it doesn’t, I’ll make sure you never work in this state again.” Fortunately, we exceeded the defined cost-savings targets and earned another long-term client and key reference. The chairman later called his engagement with SRM “a million-dollar handshake.”We’re honored to have had the opportunity to regularly deliver such performance for our customers and look forward to what the next 25 years will bring.