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Best practices in spend management   case study by apptricity
 

Best practices in spend management case study by apptricity

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TXU Corporation (“TXU”), a Dallas-based energy company hired Apptricity - an enterprise software provider for fulfilling its goals of consolidating procurement practices and improving its supplier ...

TXU Corporation (“TXU”), a Dallas-based energy company hired Apptricity - an enterprise software provider for fulfilling its goals of consolidating procurement practices and improving its supplier relationships management.

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    Best practices in spend management   case study by apptricity Best practices in spend management case study by apptricity Document Transcript

    • CASE STUDY: TXUBEST PRACTICES IN SPENDMANAGEMENTTXU Corporation Creates Added Business Efficiency,Operational Cost-Savings and Enhanced CustomerService with Apptricity Jetstream R5605 N. MacArthur Blvd., #900 · Irving, TX 75038 USAMain: 214.596.0601 · Fax: 214.596.0609 · Toll Free: 800.693.2193www.apptricity.com
    • TABLE OF CONTENTSExecutive Summary .................................................................................................... 3Pinpointing the Problem .............................................................................................. 4Searching for a Solution .............................................................................................. 5Reaping the Benefits ................................................................................................... 6Summary ..................................................................................................................... 7 Challenge: ......................................................................................................... 7 Strategy: ............................................................................................................ 7 Results: ..............................................................................................................7Apptricity – TXU Case Study – Best Practices in Spend Management Page: 2
    • EXECUTIVE SUMMARY TXU Corporation (TXU), a Dallas-based energy company, manages a portfolio of com-petitive regulated and unregulated energy businesses in North America, primarily in Texas.In the company’s unregulated business, TXU Energy provides electricity and related servicesto more than 2.4 million electricity customers in Texas, more customers than any other retailelectric provider in the region. ..TXU Energy provides electricity and related services to more than 2.4 million electricity customers in Texas.. In order to accommodate its aggressive growth objectives during the deregulation ofthe energy sector, TXU moved to a shared services model. Through a formal diligenceprocess, TXU sought to engage an enterprise software provider to fulfill its goal of consolidat-ing procurement practices company-wide as well as improve its supplier relationships.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 3
    • PINPOINTING THE PROBLEM Streamlining business processes related to vendor invoicing and employee spend was paramount to TXU. The company’s vision for creating cost-saving efficiency in these ar- eas was similar for both internal and external transactions: Eliminate the manual, paper-based process for submitting, processing and reconciling procurement transactions through web-based automation. Enable a unified approach for automating spend transaction for vendors as well as em-ployees, whether the purchases are product or service oriented. On the enterprise side of TXU, decentralized credit and non-capital procurement ac-counting functions challenged the company’s ability to manage and enforce uniform process-es and approvals. The extensive paper-based purchase, invoice and approval functions couldtake the company up to ten weeks to complete, minimizing TXU’s opportunity to capture fa-vorable pre-negotiated discounts. Additionally, delayed payments could also damage supplierrelationships. TXU wanted the ability to consolidate multiple business units under a sharedservices umbrella and improve visibility and management of corporate spend throughout theorganization. The ideal technology would enable complete automation and acceleration oftheir “procure-to-pay” business transaction processes while capturing early pay discounts andimproving supplier relations. On the workforce management side, TXU knew it could not afford to waste valuabletime of any employee. They wanted to pay their executives to lead their organizations andpay their sales staff to win new business or their operating personnel to fulfill customer needs– not to spend cumbersome hours putting together, approving and reconciling procurementtransactions and reports. TXU required the solution (internally branded EZ Pay) to be userfriendly necessitating minimal training. While simplifying the process for employees, the tech-nology would also provide visibility into employee spending throughout the organization cate-gorically and in aggregate to locate opportunities to negotiate additional corporate discountsfor volume spending.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 4
    • SEARCHING FOR A SOLUTION TXU conducted a thorough due diligence process, looking for a solution with the scal-ability, flexibility and integration capabilities essential to replace its then-current systems andfacilitate growth. After engaging in a comprehensive request for proposal (RFP) process, TXUselected Apptricity’s highly adaptable solutions for their flexibility and cost-effective scalability. Apptricity promised dynamic adaptability within an integrated solution that could beeasily customized to TXU’s best practices for decentralized procurement with centralizedpayment, as well as rapid integration to existing financial systems. TXU implemented InvoiceManagement, P-Card Management, Expense Management, and a custom-built app calledBoots Compliance Management to drive transactions externally with suppliers and internallywith employees. TXU’s implementation included the development of several industry-specificcustom compliance applications to further enhance its internal control and compliance man-agement processes. “In addition to interfacing with existing legacy systems, Apptricity’s advancedservice-oriented architecture allowed our business to replace several homegrown applicationswith a web-services based solution,” said, Steve Speer, Project Manager, TXU. “The addition-al functionality provided a common front-end user interface as well as back-end integrationinto our financial systems.” In addition to interfacing with existing legacy systems, Apptricity’s advanced service-oriented architecture allowed our business to replace several homegrown applications with a web-services based solution TXU’s solution set was customized to replicate business functions, as well as auto-mate cumbersome business processes. Not only did the integrated solution need to be ableto scale to 16,000 users and require minimal training, it also needed to accommodate TXU’sshared services operating environment. As a shared services solution, Apptricity’s suite of ap-plications had to have common security, workflow, compliance and audit management func-tionality and provide consolidated reporting for various business units. Upon implementation, users were given the ability to enter multiple types of procure-ment invoices including materials, service, education, union compliance, P-Card, and others,and route them to the accounting department for distribution, coding and approval. The estab-lished workflow automatically advances approved invoices directly to the accounts payablesystem for disbursement.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 5
    • REAPING THE BENEFITS Leveraging Apptricity’s solution, TXU efficiently processed approximately $1 billion in non-capital procurement transactions in the first year after implementation alone. The implementa- tion of Jetstream also resulted in process improve- ments such as enhanced process compliance, faster procure-to-pay turnaround and maximized use of personnel time -- including Accounts Pay- able for external and internal procurement and expense management transactions. TXU could accelerate its payments to vendors as desired to capture early pay discounts and increase field-lev- el productivity. The Apptricity solution allows TXUto streamline the invoice submission and approval processes, take advantage of early paydiscounts and reduce the costs associated with processing non-capitalized invoices. Additionally, TXU now has a solution that facilitates Sarbanes-Oxley compliance, as allapprovals are captured with electronic signature, allowing the company to maintain a uniformprocess compliance procedure for all non-capital spend transactions. “It’s essential that we maintain positive supplier relationships and the Apptricity solu-tions have enabled us to not only communicate better with our suppliers, but leverage costsavings from process improvements in our interactions,” said Speer. “Internally, the savingswe’ve gaining from automating invoice and expense transactions handling are immeasurable.How do you quantify the lost time from paid employees across the company with varioussalaries spending hours on transaction creation, submission and approval that can now beapplied to generating sales and managing the company? The system has definitely paidfor itself and delivered significant ROI.”Apptricity – TXU Case Study – Best Practices in Spend Management Page: 6
    • SUMMARY Challenge: In order to retain its edge in an increasingly competitive marketplace withinthe energy industry, TXU wanted to increase its operational efficiency within Accounts Pay-able, enhance its customer service operations and dramatically reduce the company’s annualinformation technology operation costs. Strategy: With an increased corporate focus on process improvement, the companyinvested in Apptricity’s Jetstream solutions for Invoice Management, P-Card Management,Expense Management and several additional customized applications like Boots ComplianceManagement. Results: Leveraging Jetstream’s integrated solution, TXU can efficiently process over$1 billion annually in non-capital procurement transactions and has improved its businessoperations including process compliance, procure-to-pay turnaround and Sarbanes-Oxleycompliance. Copyright © 1999-2013. Apptricity. All rights reserved. | Privacy Policy | rev.V.2, 030413Apptricity – TXU Case Study – Best Practices in Spend Management Page: 7