AIA Builds Modern Source-to-Pay Procurement Process with SAP Ariba

AIA Group sought to transform its its supply chain organization, creating a centralized operating model for sourcing and procurement, enabling leverage of its collective buying power and driving collaboration among key stakeholders.

(Golden Bauhinia Square, Hong Kong, home of AIA. Photo credit: T.K. Steven.)

AIA Group Ltd. (Hong Kong), the second largest life insurance group globally, has implemented SAP Ariba solutions to develop what the vendor calls a comprehensive, yet simple procurement/source-to-pay process. Through its use of SAP Ariba solution transformed its supply chain organization into an efficient digital environment with centralized operating model for sourcing and procurement that takes advantage of the orgnization’s scale while fostering collaboration.

David Man, Head of Finance Transformation & Operations, AIA Group.

David Man, Head of Finance Transformation & Operations, AIA Group.

“Procurement is no longer about buying things at the best prices, but collaborating in new, more efficient ways that create value across the entire source-to-pay process,” comments David Man, Head of Finance Transformation & Operations, AIA Group. “To do this requires more than just point solutions that address specific tasks. It takes an end-to-end offering that combines the convenience and agility of the cloud with the connectivity and global reach of business networks and strength of enterprise applications. With SAP Ariba, this is exactly what we get.”

In 2010, AIA was spun off from its parent, AIG. Operating in 18 markets across Asia Pacific, AIA not only needed a standard, transparent process through which it could source goods and services, but a system to fuel it, according to Man. “There was minimal integrated technology to enable an efficient end-to-end process,” he recalls.

AIA Group started to modernize and transform its supply chain organization, creating a centralized operating model for sourcing and procurement, allowing the company to leverage its collective buying power and drive collaboration among key stakeholders.

Digital Direction

AIA then pursued a course to digitize its environment, according to the vendor. With SAP ERP as its foundation, AIA began adding solutions from SAP Ariba to fuel a simpler, smarter, more connected source-to-pay process, including:

AIA has enjoyed significant results from the solutions according to Man. “We have seen improved cross-functional and market collaboration and adoption as a result of implementing these innovative tools and best-practice approach,” he says. “And this has led to significant sourcing savings and process efficiencies.”

 Alex Atzberger, President, SAP Ariba.

Alex Atzberger, President, SAP Ariba.

SAP Ariba conceives of the source-to-pay process not as a series of discreet tasks, but a connected process that involves tight integration of stakeholders, systems and processes across multiple functions and geographies, according to Alex Atzberger, President, SAP Ariba. “As innovative organizations like AIA have recognized, the only way to effectively manage this process is through end-to-end, network-based solutions that are enterprise strong, yet consumer simple and power new ways of thinking and operating that create advantage.”

Single, Integrated Platform

Through its cloud-based source-to-pay solutions and business network, SAP Ariba offers what the vendor characterizes as a single, integrated platform and easy-to-use interface through which companies can manage all of their customers, partners and spend and collaborate around key business processes, from procurement and finance to sales and marketing.

AIA Group Limited and its subsidiaries comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets in Asia-Pacific—wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, a 97 per cent subsidiary in Sri Lanka, a 26 per cent joint venture in India and representative offices in Myanmar and Cambodia. AIA was established in Shanghai in the early 20th century. It is a market leader in the Asia-Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. The company had total assets of US$172 billion as of 31 May 2015.

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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