Aegon Life Insurance Company (Aegon) is a leading life insurer in India. In a constantly evolving and competitive business, Aegon was the first insurance company to offer Online Term Plans in India and having a focus on digital-first approach in its customer offering. Aegon has an equally relentless focus on digitalization within the organization and the sourcing process being completely manual screamed for attention!
A lean team managing a manual process – this presented a set of obvious challenges. One, the sourcing process was distributed between the users and the purchase team. Supplier selection was managed by the users and the price negotiation by the purchase team. The need for more compliance, better collaboration and faster cycle times was felt. eSourcing was never tried before and there was apprehension about supplier participation in the process. Additionally, any solution, if implemented, shouldn’t burden the team further.
After surveying the market for the right solution, Aegon entered into an agreement with Krinati Solutions in Jan 2020. The primary goal was governance and audit-compliance. The management knew that if best-practice processes were adopted, savings would be a natural outcome. Auctions were conducted for all types of spend and the ROI was realised in the very first month itself. Very soon, the mandate internally was “why should an item or service not be auctioned?” When Covid hit and lockdowns were imposed, the online sourcing events were much easier to manage. Since the internal team was hands-on with the solution, they could independently create & publish events and onboard suppliers as well. The benefits of using Krinati was communicated to all functions – HR, IT, Admin – and the adoption was organization-wide.
With our investment in Krinati, we not only realized significant bottom-line savings, but also drove best practice processes in our sourcing function.
The solution, being extremely simple to use for suppliers, made it easy to onboard them. The right communication both internally (to all stakeholders) and externally (to suppliers) ensured that the objectives were clear, and any concerns were addressed proactively. RFPs for all spend is routed through Krinati Sourcing and wherever applicable, online auctions are conducted. This drove governance for the entire sourcing process, one of the key objectives for the program. 10-25% savings across various categories created a positive bottom-line impact.
The solution is extremely easy to use for suppliers as well and we get no resistance from them. The online auctions were positioned as beneficial for suppliers since it made the process totally transparent for them. We ensured that online bids were honored and awarded with no further negotiations.