1st Executive's interview with the Automobile Association's Head of Procurement - Daniel Cox
Following the appointment of Simon Breakwell (ex Uber & Expedia) as CEO in August 2017, The AA has commenced a complex transformation programme focused on revolutionising the customer experience through investing in and embracing new technologies. Procurement are heavily involved in this transformation, so we took the opportunity to talk with Head of Procurement, Daniel Cox.
The AA is one of the UK’s most recognisable brands and is indeed the largest membership organisation in the UK. To start things off could you provide a few basic facts and figures?
The AA has three main divisions. We are the market leader in Roadside Assistance with some 3.3m personal members and 10m business customers, attending on average 10,000 breakdowns every day. We rescue approx. 2,000 children from inside locked cars a year, but only about 1,000 pets! Our Insurance business has around 2m live policies, and we also operate the nation’s largest Driving School brands (AA and BSM) with over 2,700 Instructors. In addition, we have a range of complementary businesses such as and AA Signs, as well as Hotel Inspections and Publishing.
You joined the AA as Head of Procurement just over 2 years ago. What attracted you to the company?
It was an exciting time to join the AA, which had become a PLC in 2014 and therefore needed to develop a Procurement capability befitting a public company. Significant funding had also been raised to invest in customer service, vehicles, equipment, CRM technology and digital trading; there remains a lot to do! I actually think it’s easy to be proud of the AA brand, it’s history and all that our front-line service people (in the recovery vehicles and call centres) manage to achieve for members and customers, who are often in very distressed situations.
Tell us a bit about Procurement in the AA, and the scope and responsibilities of the function?
The AA is on the edge of the UK FTSE 250 and we have a significant 3rd party spend, particularly on fleet, fuel, road services and external garaging partners. We also invest heavily in areas such as IT, Digital and telecoms. As a Procurement team, we work hard to be seen as trusted and valued business partners across the whole company, offering genuine sourcing expertise and insight. We always try to work collaboratively with internal colleagues, suppliers and partners to maximize value-for-money and get the right outcome for our customers.
What have been the key challenges and successes for Procurement within the AA over the last couple of years?
The sheer volume and complexity of transformation projects that have been running at the same time! Against this backdrop, we have managed to recruit genuine category specialists that have made a real difference in a number of key areas of spend. We continue to deliver a lengthy pipeline of sourcing projects and contract renewals, as well as achieve our financial contribution targets. Crucially for me, we are leading the cross-functional S2P transformation across the business, including selective but significant investments in e-Procurement technology. We’ve also recruited resource dedicated to improving the effectiveness of our existing supplier management and governance processes, which has provided a much better foundation to build from.
How do you hope to benefit from the impact of new technology in the future?
We want to adopt and standardize efficient tools and processes that will minimize supply chain risk and transactional inefficiencies, but that are also easy to engage with and understand for all parties (internal users and external suppliers) – not easy! We are investing in a targeted suite of e-procurement, cloud-based SaaS products from SAP Ariba which cover e-Sourcing, Contract Management (including e-Signature), Supplier Risk & Performance Management, Purchase-to-Pay and Guided Buying. This will genuinely transform how the AA interacts with our suppliers and partners, very much for the better!
Strategic 3rd party relationships are very important to your business. Are there processes in place to ensure key suppliers are given every opportunity to drive collaboration, efficiency and growth?
This will be a critical outcome of our new technology-driven strategy. The AA has always developed close relationships with suppliers, but by introducing automated processes and much clearer accountability for relationship management and development, we fully expect all parties to benefit. We want all the AA’s suppliers to register early on to our new platform so we can deepen trading relationships quickly and effectively, giving controlled access to new areas of opportunity and innovation. We want more successful collaboration like Car Genie which recently won the 2018 Internet of Things (IoT) Breakthrough award for Connected Car OBDII ‘Product of the Year’.
There are obvious reasons to have national relationships with vendors, but to what extent do local companies contribute?
We partner with a huge network of local garages which help to support our roadside assistance business. Within our Driving Schools, we give opportunities to thousands of Instructors to become Franchisees. The AA is a UK focused business that is always interested in working with SMEs.
The industries you cover are very competitive, but aside from competitors what other challenges are you facing?
Data protection and cyber security across the supply chain is particularly important for a business such as the AA which has so many members and customers. Also, in common with many organisations, day-to-day management of critical contracts to ensure we receive all the services and standards of performance to which we are entitled can be problematic. As a result, Procurement is now looking to take responsibility for improving the day-to-day management and performance delivery of some of our critical supplier contracts.
What’s the biggest change you’ve seen in Procurement within the last 10 years?
Apart from the prevalence and impact of technology, one of the biggest changes for me has to be the wide recognition now that most truly effective Procurement practitioners will have a high EQ level. Self-awareness, self-regulation, understanding motivations, empathy for others and strong interpersonal skills (influencing, communicating, leading, changing, etc) are just as important, and usually more so, than specific category or market knowledge.
Can you provide a brief insight into your career?
I started my Procurement career working for Asda Stores during their big turnaround in the mid-90s. Since then I’ve worked in the Logistics, Manufacturing, Retail, Technology, Chemical and Financial Services sectors before joining the AA.