R                Case Study:Best Practices in Spend Management (TXU) TXU corporation Creates Added Business Efficiency, Op...
Table of ContentsExecutive Summary ..........................................................................................
Executive SummaryTXU Corporation (“TXU”), a Dallas-based energy company, manages a portfolio of compet-itive regulated and...
Pinpointing the ProblemStreamlining business processes related to vendor invoicing and employee spend was par-amount to TX...
Searching for a SolutionTXU conducted a thorough due diligence process as the utility looked for a solution with thescalab...
Reaping the BenefitsLeveraging Apptricity’s solution, TXU efficiently processed approximately $1 billion non-cap-ital proc...
SummaryChallenge: In order to retain its edge in an increasingly competitive marketplace within theEnergy Industry, TXU wa...
Upcoming SlideShare
Loading in …5
×

Best Practices in Spend Management - Case Study by Apptricity

552 views

Published on

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.

Published in: Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
552
On SlideShare
0
From Embeds
0
Number of Embeds
6
Actions
Shares
0
Downloads
10
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Best Practices in Spend Management - Case Study by Apptricity

  1. 1. R Case Study:Best Practices in Spend Management (TXU) TXU corporation Creates Added Business Efficiency, Operational Cost-Savingsand Enhanced Customer Service with Enterprise Apptricity for Energy Solutions
  2. 2. 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
  3. 3. Executive SummaryTXU Corporation (“TXU”), a Dallas-based energy company, manages a portfolio of compet-itive regulated and unregulated energy businesses in North America, primarily in Texas. Inthe company’s unregulated business, TXU Energy provides electricity and related services tomore than 2.4 million competitive electricity customers in Texas, more customers than anyother retail electric provider in the region.In order to accommodate its aggressive growth objectives during the deregulation of en-ergy sector, TXU moved to a shared services model. TXU sought through a formal diligenceprocess to engage an enterprise software provider to fulfill its goal of consolidating procure-ment practices company-wide as well as improving its supplier relationships management.Leveraging its Advance Framework technology, Apptricity could and subsequently did meetTXU’s defined objectives and more.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 3
  4. 4. Pinpointing the ProblemStreamlining business processes related to vendor invoicing and employee spend was par-amount to TXU. The company’s vision for creating cost-saving efficiency in these areas wassimilar for both internal and external transactions:Eliminate the manual, paper-based process for submitting, processing and reconciling pro-curement transactions through web-based automation.Enable a unified approach for automating spend transaction for vendors as well as employ-ees, whether the purchases are product or service oriented.On the enterprise side of TXU, decentralized credit and non-capital procurement account-ing functions challenged the energy company’s ability to manage and enforce uniform pro-cesses and approvals. The extensive paper-based purchase, invoice and approval functionscould take the company up to ten weeks to complete, minimizing TXU’s opportunity to cap-ture favorable pre-negotiated discounts. Additionally, delayed payments could also damagesupplier relationships. TXU wanted the ability to consolidate multiple business units undera shared services umbrella and improve visibility and management of corporate spendthroughout the organization. The ideal technology would enable complete automation andacceleration of their “procure-to-pay” business transaction processes while capturing earlypay discounts and improving supplier relations.On the workforce management side, TXU knew it could not afford to waste valuable timeof any employee. They wanted to pay their executives to lead their organizations and paytheir 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 technology solution (internally branded EZ Pay)to be user friendly necessitating minimal training. While simplifying the process for employ-ees, the technology would also provide visibility into employee spending throughout theorganization categorically and in aggregate to locate opportunities to negotiate additionalcorporate discounts for volume spending.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 4
  5. 5. Searching for a SolutionTXU conducted a thorough due diligence process as the utility looked for a solution with thescalability, flexibility and interface capabilities essential to replace its then-current systemsand accelerate its business. After engaging in a comprehensive request for proposal (“RFP”)process, TXU selected Apptricity’s highly adaptable solutions for their flexibility and cost-ef-fective scalability.Apptricity promised dynamic adaptability within an integrated solution that could be easilycustomized to TXU’s best practices for decentralized procurement with centralized paymentand rapid integration to existing financial systems. TXU implemented Invoice Management,Purchase Card Management, Expense Management, Boots Compliance Management withinthe Enterprise Apptricity for Utilities & Energy solution offerings* to drive transactions exter-nally with suppliers and internally with employees. TXU’s implementation included the de-velopment of several industry-specific custom compliance applications, leveraging ApptricityAdvanced Framework, to further enhance its internal control and compliance managementprocesses.“In addition to interfacing with existing legacy systems, Apptricity’s advanced service-ori-ented architecture allowed our business to replace several homegrown applications with aweb-services based solution,” said, Steve Speer, Project Manager, TXU. “The additional func-tionality provided a common front-end user interface as well as back-end integration intoour financial systems.”The Apptricity integrated enterprise solution was customized to replicate business functions,as well as automate cumbersome business processes. Not only did the integrated solutionneed to be able to scale to 16,000 users and require minimal training, it also needed to ac-commodate TXU’s business or shared services operating environment. As a shared servicessolution, Apptricity’s suite of applications had to have common security, workflow, compli-ance and audit management functionality and provide consolidated reporting for variousbusiness units.Upon implementation, users obtained the ability to enter multiple types of procurementinvoices including materials, service, education, union compliance, purchase card, expenseand others, and route them to the accounting department for distribution coding and ap-proval. Workflow automatically advances approved invoices directly to the accounts payablesystem for disbursement.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 5
  6. 6. Reaping the BenefitsLeveraging Apptricity’s solution, TXU efficiently processed approximately $1 billion non-cap-ital procurement transactions in the first year alone after implementation. The implemen-tation of Enterprise Apptricity for Utilities & Energy applications also resulted in processimprovements such as improved process compliance, faster procure-to-pay turnaround andmaximized use of personnel time -- including Accounts Payable for external and internalprocurement and expense management transactions. TXU could accelerate as desired itspayment of vendors to the capture of early pay discounts and increase field level produc-tivity. The Apptricity solution allows TXU to streamline the invoice submission and approvalprocesses, take advantage of early pay discounts and reduce the costs associated with pro-cessing non-capitalized invoices.Additionally, TXU now has a solution that facilitates Sarbanes-Oxley compliance, where allapprovals are captured with electronic signature and the company maintains a uniform pro-cess compliance procedure for all non-capital spend transactions.“It’s essential that we maintain positive supplier relationships and the Apptricity solutionshave enabled us to not only communicate better with our suppliers, but leverage cost sav-ings from process improvements in our interactions,” said Speer. “Internally, the savingswe’ve gaining from automating invoice and expense transactions handling are immeasur-able. How do you quantify the lost time from paid employees across the company with vari-ous salaries spending hours on transaction creation, submission and approval that can nowbe applied to generating sales and managing the company? The system has definitely paidfor itself and delivered significant ROI.”Subsequent to changes in senior management during early 2004, TXU began rationalizing itsinternational asset base to focus on its core competencies, which included forming an ener-gy-focused information technology company with Parisbased Capgemini to create Capgem-ini Energy LP. This new corporate entity was formed to improve customer service and dra-matically reduce TXU and other companies’ annual information technology operation costs.* Enterprise Apptricity for Utilities & Energy reflects Apptricity’s current industry solution branding and en-compasses a broad selection of enterprise applications for asset management, workforce management andspend management. When TXU purchased Apptricity’s Invoice Management, Purchase Card Management,Expense Management, Boots Compliance Management and several custom-built applications, they wereapplications within Apptricity’s Spend Management suite.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 6
  7. 7. SummaryChallenge: In order to retain its edge in an increasingly competitive marketplace within theEnergy Industry, TXU wanted to increase its operational efficiency within Accounts Payable,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 company invest-ed in Enterprise Apptricity for Energy, known as Spend Management at the time of purchase,from Apptricity Corporation for its highly adaptable procurement business value. SpecificSolutions: Invoice Management, Purchase Card Management, Expense Management, BootsCompliance Management and several additional customized applications.Results: Leveraging Apptricity’s integrated solution, TXU can efficiently process over $1billion annually in non-capital procurement transactions and has improved its businessprocesses including process compliance, procure-to-pay turnaround and Sarbanes-Oxleycompliance.Apptricity – TXU Case Study – Best Practices in Spend Management Page: 7

×