Risk
Aon ASATS: Business Transformation

 

Business Transformation


Today's ever-changing global business environment requires organizations to continuously adapt to market dynamics. Rapidly changing external realities such as technological changes, globalization, aggressive industry consolidation, shifting governmental regulations, increasing cost pressures, and evolving workforce demographics require strategy aligned operating models and organization strategies to ensure the right organization design and capabilities are in place and operating effectively to compete and win.

Whether the critical issue is organization alignment to strategy or efficient and effective balance and scaling of organization driven sales general & administrative costs, business transformation can quickly and effectively provide the insights necessary to assess opportunities, identify gaps and develop the most effective path forward to achieve targeted and sustainable business performance.

Banking industry
Healthcare
Technology
Insurance

General case study summary

Fortune 100 global retail and consumer packaged goods (CPG) company targeted major investment and growth in BRIC countries (Brazil, Russia, India and China) and required new models for their regional market business units. The company partnered with Aon to undertake business transformation to acquire their local market joint venture (JV), restructure the regional business model in Latin America, and transition the organization to the new operating model.

Aon worked closely with the client leadership team to buy-out their joint venture (JV) partner in Brazil, conduct a build-vs.-buy analysis, restructure supply chain and back office operations (finance & accounting, tax, real estate, human resources, and information technology), and transition to a regional shared services model to support growth from 23 to 400+ stores.

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Sample general industry engagements

  • Leading North American food manufacturer restructures the engineering organization to optimize existing service delivery model, evolve with new supply chain strategy, and align with profitable growth into new market segments.
  • Leading Brazilian cosmetics company, suffering from a drop in employee engagement and challenges to their long standing company culture due to a challenging ERP implementation, undertook an enterprise wide engagement and culture reinforcement program.
  • An innovative and market leading global logistics company was experiencing accelerated growth, organic and through acquisitions, that was driving the need to operate as a globally integrated operation. A business transformation resulted in globally integrated performance and reward systems, development of a more consistent global organizational culture, and an integrated global HR service delivery model.
  • The global market leading manufacturer of heavy and medium-size trucks undertook expansion into South America and engaged Aon to guide talent acquisition strategy, HR program design and set-up, and benchmarking and design for total rewards strategy through the life cycle of start-up to full scale operations.
  • A leading automobile dealer network and parts distributor undertook a rapid assessment to identify cost reduction opportunities, develop a prioritized set of efficiency initiatives, and implement changes to realize hard dollar savings with a 100 x ROI on the project investment.
  • A Korean heavy industry conglomerate expanding global operations into South America through a combination of acquisition and joint venture to realize rapid growth opportunity engaged Aon to plan, design, implement, and scale the new organization.
  • An Indian chemical company expanding mining operations in the US reached scale and complexity of operations that required restructuring of the organization and development of a comprehensive roadmap for organization development to enable rapid growth.
  • A North American market leading provider of underground facilities location and marking services to the utilities and telecom industry was facing rising costs and few opportunities for market share and revenue growth; business model innovation reduced the cost of maintaining underground facilities (outside plant) while minimizing the cost and service revenue impact caused by damage from excavation and construction.
  • One of the largest mining and energy companies in Brazil increased productivity while driving profitable global expansion through the development and deployment of comprehensive workforce planning systems and human resource analytics.

Business transformation: organization transformation

Companies in today's business environment are experiencing an unprecedented amount of change both in terms of change drivers and pace of change (e.g., mobile, social, and cloud computing technologies; shifting workforce demographics; increasing importance of global opportunity and competition; new sources of competitive advantage; rapidly evolving risk and regulatory requirements). The result can be misalignment of organization to economic realities, mismatch between organization and strategy, ineffective management structure and/or on-competitive cost structure. A critical element in the foundation of high performing companies is an organization design that optimizes alignment of strategy and business goals to holistic organization design (i.e., structure, governance and decision-making, work processes, and the talent that makes things work within the company's unique operating model and culture). Organization transformation is a systematic approach that helps companies realize their goals by addressing these dimensions of "business software" holistically and focusing change efforts only on the areas that are detracting from or driving value in each company's specific situation.

Aon's approach to organizational transformation is systematic, fact-based and human capital centric, enabling us to work with our clients to think ahead and identify the practical steps needed to operationalize and implement the changes. We employ our proprietary GEMTM Framework to drive real business results, and our engagements leverage our expertise, tools, and methods on organization design to go beyond just the "lines and boxes." Our holistic perspective takes into account governance, decision rights, information flows, culture, and change management considerations in a manner that engages appropriate levels of the organization and results in sustained performance in the new organizational model.

Embedded within our organization design framework and methodology we have a variety of tools, methods, and templates to guide and enable the assessment, design, and implementation of a new organization. We do not employ a "one size fits all" approach. For example, we work with our clients to select, configure, and employ the tools and methods best aligned and the highest and best value proposition to their situation and needs.

Aon's business transformation practice consultants have a mix of industry, management consulting, and human capital backgrounds. This helps ensure that our advice is aligned with our client's strategy, and that our insights and recommendations are practical, implementable, and consider the impact of change on the client's organization.

Business transformation: organization transformation

Banking Industry

In today's economy, organizing and running a financial institution in the banking sector is harder than ever. Leaders are faced with critical challenges in finding new and better ways to increase top-line revenues, maintain necessary capital ratios, improve margins, strengthen balance sheets and enhance efficiencies. Regulatory changes, compliance, economic volatility, and issues involving data security, distressed lending and troubled assets add even more concern. Further, the banking sector value chain is undergoing seismic shifts brought on by both technology evolution and disruption in the form of on-line banking, mobile (everywhere and always on), and the growing influence of electronic commerce. Organization transformation is a systematic approach to enabling superior performance by aligning and optimizing the bank's organization design and human capital (i.e., leaders, managers, and workforce) consistent with the bank's mission, vision, and strategy.

Banking case study summary

Mid-sized retail bank with US$ 60bn in assets and leading private label credit card market share divests and restructures organization to comply with regulatory requirements, align and engage the senior leadership team, and implement the capabilities needed to divest from the parent company and initiate one of the first and most significant post-economic crisis initial public offering.

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Sample banking industry engagements

  • An integrated insurance, securities, and banking regulatory agency undertakes organization transformation to fulfill the new charter and regulatory requirements following the 2009 financial crisis and related requirements instituted by Dodd-Frank, the Federal Reserve, and the OCFB.

  • A growing regional banking organization conducts an enterprise organization assessment and redesign to remedy compliance audit regulatory deficiencies, align with the business growth strategy, improve near-term business performance, and enable long-term profitable geographic expansion and growth.

  • A regional retail bank engages Aon to conduct enterprise assessment and implements remediation program to address organization and process deficiencies identified by bank regulators.

  • One of the largest global investment banks engages Aon to conduct enterprise assessment and implements remediation program to address organization and process deficiencies identified by bank regulators.

  • A leading Malaysian bank undertakes organization benchmarking and restructuring to drive improvements in efficiency and realign the organization and capabilities to drive growth.

  • A leading Chinese bank engages Aon to analyze current organization structure, assess change readiness evaluation, and recommend blueprint for organization structure redesign.

Insurance Industry

In today's economy, organizing and running a financial institution in the insurance sector is harder than ever. Leaders are faced with critical challenges in finding new and better ways to increase top-line revenues, maintain necessary capital ratios, improve margins, strengthen balance sheets and enhance efficiencies. Regulatory changes, compliance, economic volatility, and issues involving data security, distressed lending and troubled assets add even more concern. Further, the banking sector is undergoing seismic shifts brought on by technology evolution and disruption in the form of on-line banking, mobile (everywhere and always on), and the growing influence of electronic commerce.

Organization transformation is a systematic approach to enabling superior performance by aligning and optimizing the insurance company's organization design and human capital (i.e., leaders, managers, and workforce) consistent with the company's mission, vision, and strategy.

Insurance case study summary

Leading global insurance provider sought organization transformation following a business model shift and merger. The senior leadership team partnered with Aon for assistance with organization design and alignment with new business model and strategy for one of its largest entities (>US$ 9Bn).

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Sample insurance industry engagements

  • One of the largest U.S. insurer's claims operations groups defined jobs and developed job families/career path to align with a new organization design and compensation structure and engaged Aon to define a future state organization, career path architecture, and job leveling guides resulting in increased efficiency and improved talent management.
  • One of the largest insurance companies in Europe, with over 80,000 employees globally, operatgin a highly decentralized model, aligned rewards and talent programs to a new business strategy, identified opportunities for group-wide cohesion, and adopted global best practices.
  • A leading national multi-line insurance company conducts a holistic performance review and restructures the personal injury protection (PIP) business organization, processes, and technology plans.
  • A leading Southeast Asian life insurance company undertakes organization benchmarking and organization design to drive SG&A cost reduction and enhanced go-to-market effectiveness in new channels.
  • A leading global multi-line insurance company acquires and integrates the organizations of companies in Malaysia, Mexico, Columbia, and Brazil.
  • One of the top 5 insurance organizations in Turkey undertakes organization assessment and transformation program for the information systems and technology organization.

Healthcare Industry


Healthcare case study summary

Healthcare is an industry in the midst of fundamental transformation across the entire value chain and all sectors including physician groups, individual hospitals, senior care facilities, managed care organizations, insurance companies, wellness organizations, and integrated health care systems. As healthcare organizations restructure to address the new business realities driven by healthcare reform, technology changes such as the changeover to electronic medical records (EMRs), the shift to consumer-driven products, and demographic changes in the healthcare workforce, healthcare organizations need to reassess their operating models to ensure they are structured effectively with the right talent capabilities to enable their evolving mission, vision, and strategy.

Organization transformation driven by mergers, acquisitions, joint ventures, and business model innovation creates a critical need for a holistic and objective approach to organization design and alignment that takes into account the "soft" factors of organization effectiveness such as culture as well as the "hard" elements of organization structure and cost.

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Sample healthcare industry engagements
  • A leading North American health insurance company acquires and integrates large insurer to expand markets and realize economy of scale synergies and integrated healthcare growth strategy.

  • Physician group optimizes decision making and clarifies its vision for the practice after aligning with major regional hospital system in a lease arrangement and achieves improved referral growth and physician productivity through high performance team development.

  • Specialized hospital system undertakes organization review and saves US$ 253m in annual operating expense through restructuring and workforce planning.

  • Dominant two-state health and wellness organization undertakes strategic workforce planning and analytics modeling to realign the organization in response to changing regulatory requirements.

  • Global pharmaceutical company undertakes organization transformation to increase innovation, drive improved employee engagement, and lower operating expenses.

  • Rapidly growing integrated healthcare organization conducts culture diagnostic and implements an enterprise-wide culture transformation program to increase employee retention and sustain continuing rapid growth.

  • Leading pharmaceutical and medication supplier acquires major competitor and realizes major cost synergies in an accelerated merger integration and synergy-capture process.

  • Japanese pharmaceutical company acquires Canadian pharmaceutical company and integrates the Canadian and US operations to realize IP gains, innovation synergy, and gain access to new talent.

Technology Industry

Technology companies continue to operate in an extremely fast paced environment which requires them to continuously innovate and stay ahead of inconstant market dynamics in order to stay competitive. New business realities, whether it is globalization, the war for scarce technical talent, industry consolidation, convergence and blurring of traditional technology sectors, require technology companies to reassess their operating models and organization design to ensure they are structured effectively with the right talent capabilities to be nimble and change to stay ahead of the competition. In the hardware sector, multi-tier supply chains have become leaner and more extended, helping to accelerate delivery of materials and components. Organizing effectively and integrating diverse cultures to enable globalization is a critical requirement. For software companies, technology innovations such as the cloud and social media provide the promise of new services and capabilities but also introduce new and complex challenges to the organization designs and operating models that have served the industry so well in the past but now may be holding company's back as they drive for faster innovation and lean operations on a global scale.

Technology case study summary

A global software and hardware technology company undertook an aggressive business transformation consisting of a CEO changeover, restructuring to align with a new strategy, and acquisition and integration of a global 30,000 employee mobile technology company.

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Sample technology industry engagements

  • One of the three largest global technology companies engaged Aon to support the organization planning, design and integration for their largest and most complex of over 160 acquisitions as part of their strategy to transform the business from a technology product company to an integrated product and service technology solution provider.

  • Leading global online retailer undertook assessment of global operations and design of HR global shared services strategy to enable continued profitable growth and international expansion.

  • Nationwide wireless technology company undertakes business transformation to enable rapid network build-out and expansion and implements comprehensive overhaul of total rewards strategy to improve employee engagement and executive retention.

  • Leading online retailer and payment processing company expands and strengthens their M&A organization and capabilities, acquires and integrates multiple companies to drive market share and revenue growth, and transforms the human resources organization to support and enable the growth of the business.

  • Market leading travel service company spins out a global business unit and engages Aon for end-to-end project planning and implementation planning for the parent and divested organizations.

  • Strategic advisor for organization design and effectiveness to the CEO and CHRO of one of the largest and most diverse communications and technology companies in the world.

  • Global leading Chinese technology company engages Aon for integration planning and implementation support for organization design, total rewards, and culture harmonization for simultaneous acquisitions of two large computer and mobile device companies. 

  • Leading mobile technology company undertakes business transformation to rationalize product platforms and restructure the organization to focus on growth in new markets and gain operating efficiencies.

  • A major financial market exchange transforms the product development and technology organizations to improve product innovation effectiveness, speed and efficiency.

Business transformation: tactical performance improvement

Cost efficiency is a continuous and evolving imperative for any business. Aon's proven diagnostic approach targets non-core cost areas of total cost of risk, total cost of health & benefits, and sales, general & administrative cost for rapid analysis and opportunity identification. Our holistic approach can be executed in 1-3 months and deliver run-rate savings within 12 months. The ability to rapidly and efficiently identify, prioritize, and deliver sustainable cost reduction can often times prove to be elusive in technical areas that require specific domain expertise, benchmarking data, and fact-based methods and analytics to target and achieve hard dollar savings. Aon's tactical performance improvement services bring these specific elements to the table and drive measureable results.