Spend management at AXA pays dividends

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Financial services and healthcare provider, AXA has streamlined procurement processes, achieved substantial savings and realised rapid return on investment from its implementation of new spend management software.

The global company, which consists 20 global, autonomous units, identified the need to standardise its buying procedures to create consistency across the Group and maximise the efficiency of its procurement function.

Stephen Wills, head of procurement for AXA UK told IT PRO that project to roll out spend management software began over three years ago, where each unit was given the chance to deploy Ariba Buyer, spend management technology.

"In the UK we spent quite a lot of time putting policies and processes on place to get compliance in our buying processes with the business," he said. "Once we had a five to seven stage procurement lifecycle process in place we took our proposal to the board to implement Ariba."

Since then, Wills said the main benefits have been saving the company money through the rationalisation of its spending across departments.

He added: "We ran a utilisation of preferred suppliers survey and got 10 per cent more responses than before we implemented Ariba and have achieved return on our investment in Ariba Buyer, enhanced with its e-sourcing product, in the one UK business we've already deployed to within 12 months."

He stressed however, that the key to this success has not necessarily been technology, but user buy-in and adoption instead.

To get buy-in, it's not just you that has to believe the automation of the processes is necessary and logical, you have to persuade users of that with a lot of communication and training too."

Duncan Jones, a senior analyst at Forrester agreed about the importance of cultural change when introducing automation and standardisation across buying processes.

"Adoption is key," said Jones. "The danger with a top-down approach often taken by solutions coming from the finance side is that they drive the work down to supplier and end-user level. But if the tools aren't easy enough to use, users just won't use them."

He also said bridging the cultural gap between finance and procurement to identify where processes were breaking down was the best way of identifying what kind of spend management system was most likely to meet a business's requirements.

Wills added that AXA UK will now roll it Ariba installation out to the rest of its UK business next year, drawing on the lessons about adoption already learned so far.

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