The future of procurement
November 22, 2021
November 22, 2021
When Mike Benvenuto, Chief Procurement Officer (CPO) at Aon, earned a seat at the table to help advance plans for sustainability, diversity and managing through a global pandemic, he knew procurement’s role had changed. To talk about this change, he joined more than 150 business and industry experts at Accenture’s Future-Ready Forum and unpacked what successful leaders are doing differently to thrive in this time of compressed transformation.
During his fireside chat, Benvenuto shared insights about what’s working at Aon, a US$10 billion leading global professional services firm that provides broad range of risk, reinsurance, retirement and health solutions and employs more than 50,000 people across 120 countries. He brought to life what it takes to build intelligent operations as CPOs are under more pressure than ever to expand the value they deliver.
The stakes couldn’t be higher. Global research reveals organizations with highly mature operations are considered “future ready” and are, on average, 1.7 times more efficient and 2.8 times more profitable. They also improve their talent mix, customer experiences and ecosystem relationships.
In three years, Aon’s procurement team drove nearly $300 million in savings, which helped build credibility—and raised the bar on the kind of value they could deliver.
More than talent or budget, research shows that the top three barriers to building mature operations are structure, technology and strategy. Building a strong procurement function augmented by the right technology, establishing ecosystem partnerships and developing productive relationships with internal stakeholders takes time and perseverance. Benvenuto broke it into three phases:
Procurement leaders need this more comprehensive, holistic view of value as their new “North Star” to drive operational maturity, break down silos—elevating the role and impact of procurement. With strong relationships and the right technology, Aon’s procurement team can analyze spending to assess if they need partners who are more diverse or who can offer fresh thinking—Benvenuto says these conversations are now expected.
As a result, the team has elevated its role and become integral to efforts around net-zero, diversity and strong ecosystem relationships. When the global pandemic hit, the strengthened procurement model paid off to help manage Aon’s third-party spending.
According to research, two key steps to operational maturity are automation and data. Automation reduces costs. It ranks as the top factor to making business processes digital and organizations have increased its widespread use fivefold over the past three years.
More organizations have been embedding technology throughout sourcing, contracting and purchasing to keep data at the heart of procurement work. In fact, two-thirds say their company’s operating model is designed based on data rather than on executive experience and intuition. To quickly gain the analytics and technologies they need, many are tapping into existing resources through ecosystem partners. Thirty-seven percent of procurement leaders have improved their ecosystem partnerships over the past three years.
"All that sweat equity we expended before had us prepared for the marathon we didn’t know we were going to run."
– MIKE BENVENUTO, Chief Procurement Officer, Aon
Building operational intelligence is hard work. It takes time, perseverance and a relentless focus on execution. Benvenuto offered three pieces of advice:
To evaluate your own operations maturity, take the Future-Ready Operations Maturity assessment. Answering 10 questions provides you with a report you can use to better understand how to tackle compressed transformation challenges by building an intelligent operation. You can also listen to the full recording here.