INTRODUCTION
- Recent innovations in digital technologies are causing businesses to reimagine the way procurement can add incremental value. While many industries have acknowledged and adopted these advancements to their benefit, the Insurance industry is still lagging behind. However, as technology has become a critical aspect of an effective procurement strategy, insurance carriers need to keep up.
- In Valorant’s experience, a digitally enabled procurement organization can drive efficiencies at scale. Digital procurement in insurance industry can automate simple, repeatable tasks to enhance efficiencies and reduce costs. By reducing the amount of time spent on repeatable, process-level tasks, procurement teams can more effectively focus on activities that add value.
- Valorant partnered with a $1.8 Bn US based insurance carrier to assist their digital procurement transformation journey. The result was a digitally advanced procurement organization with access to all third party spend data, contract data, cost structures, supplier performance metrics and risk assessment reports at a single click. Vast amounts of data coupled with sophisticated tools for analysis enabled procurement to be more agile and fact driven, leading to an 8% increase in run rate savings and improved customer satisfaction.
BENEFITS OF DIGITAL PROCUREMENT SPAN ACROSS THE END TO END PROCUREMENT LIFECYCLE
- The benefits of digital transformation in procurement for an insurance company can be significant and they can be spread across the Source-to-Pay (S2P) procurement value chain. Source-to-Contract (S2C) or strategic sourcing can become more predictive, while Purchase-to-Pay (P2P) which is inherently more transactional and hence can be automated. Moreover, it can also enable insurance carriers to adopt a proactive approach for supplier relationship management and third-party risk management.
Characteristics of Digital Procurement
Suppliers can be continuously monitored and engaged to maximize relationship potential and manage third party risks
Pricing, consumption patterns and supply base can be proactively predicted, leading to effective contracts and optimized Total Cost of Ownership (TCO)
All P2P transactions can be automated, minimizing human involvement which leads to faster processing and low error rate
Source-to-Contract (S2C)
1. Spend Analytics
- Modern spend analytics tools can provide full visibility into third party spend and drive automated sourcing insights through sophisticated analyses using machine learning & artificial intelligence. Increased spend visibility would help insurers categorize spend, manage suppliers and drive savings opportunities.
2. eSourcing /eRFX
- These are comprehensive online RFP, RFI or RFQ lifecycle management solutions which can significantly reduce procurement overheads by enabling easy RFP design, distribution, collation of responses and analysis.
3. Contract Management
- A central repository of all contracts with a standard clause library can enable insurance carriers improve the speed at which they draft, store and access contracts. This data will also be used to set up advance expiration/ renewal alerts to allow for enough time to plan renewal strategies even for the most complex contracts.
Download PDF to Read More
- Download full PDF report to know more about how an insurance company can benefit from digital transformation in Procurement
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Interested in learning more about how Valorant can help your organization strategically reduce your 3rd party spend, as well as manage vendor-related risk? Reach out to us now
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Valorant is a consulting firm focused exclusively on Procurement related services for clients in the Financial Services industry.
Valorant is a consulting firm focused exclusively on Procurement related services for clients in the Financial Services industry.
