How to be ready for the unexpected
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.
A pro’s cure for common hurdles
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:
Lay a strong foundation. The first step was to get the basics right: setting policy and investing in tools and technologies; including a procurement platform and expanding the team’s scope beyond North America. The idea is to make fundamental tasks like searching for invoices or figuring out why a vendor hadn’t been paid less complicated and make it easier for internal stakeholders to engage with the procurement team.
Become a trusted advisor. For the team to move beyond a reactive, transactional relationship, they adopted the mindset of truly making their internal clients they serve successful. The team began meeting with their stakeholders to understand their businesses, their headwinds, tailwinds, forecasts and goals. Over time, they have become one team. Coming together to brainstorm ideas on how to use their budgets to support their business plans.
Accelerate change. With a strong foundation generating efficiencies and becoming the single source of truth for data, the team worked with their internal stakeholders to analyze spending, make buying decisions, evaluate suppliers and spot opportunities across the business. This is a continuous cycle.
It goes beyond cost, it's about driving business value
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.
Automate and put data at the heart of procurement
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.
What it takes to change
Building operational intelligence is hard work. It takes time, perseverance and a relentless focus on execution. Benvenuto offered three pieces of advice:
- Have courage in yourself and in your team to drive change and to keep pushing boundaries.
- Keep things simple. Remember that little things can add up to a big impact. Pick a few areas to pilot. As successes increase, stakeholders begin wanting more of procurement’s time.
- Never underestimate the resiliency of your team. Communicate your goal early and often, so your team knows why change is happening and what you are trying to accomplish. Help colleagues use those goals and see challenges as opportunities to develop their career paths and redefine their profession as they go.
Take the next steps
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.