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.

1. CASE STUDY: TXU
BEST PRACTICES IN SPEND
MANAGEMENT
TXU Corporation Creates Added Business Efficiency,
Operational Cost-Savings and Enhanced Customer
Service with Apptricity Jetstream
R
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www.apptricity.com

2. TABLE OF CONTENTS
Executive Summary .................................................................................................... 3
Pinpointing the Problem .............................................................................................. 4
Searching for a Solution .............................................................................................. 5
Reaping the Benefits ................................................................................................... 6
Summary ..................................................................................................................... 7
Challenge: ......................................................................................................... 7
Strategy: ............................................................................................................ 7
Results: ..............................................................................................................7
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3. 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 services
to more than 2.4 million electricity customers in Texas, more customers than any other retail
electric 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 of
the energy sector, TXU moved to a shared services model. Through a formal diligence
process, 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.
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4. 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 could
take 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 supplier
relationships. TXU wanted the ability to consolidate multiple business units under a shared
services umbrella and improve visibility and management of corporate spend throughout the
organization. The ideal technology would enable complete automation and acceleration of
their “procure-to-pay” business transaction processes while capturing early pay discounts and
improving supplier relations.
On the workforce management side, TXU knew it could not afford to waste valuable
time of any employee. They wanted to pay their executives to lead their organizations and
pay 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 procurement
transactions and reports. TXU required the solution (internally branded EZ Pay) to be user
friendly 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 discounts
for volume spending.
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5. 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 and
facilitate growth. After engaging in a comprehensive request for proposal (RFP) process, TXU
selected Apptricity’s highly adaptable solutions for their flexibility and cost-effective scalability.
Apptricity promised dynamic adaptability within an integrated solution that could be
easily customized to TXU’s best practices for decentralized procurement with centralized
payment, as well as rapid integration to existing financial systems. TXU implemented Invoice
Management, P-Card Management, Expense Management, and a custom-built app called
Boots Compliance Management to drive transactions externally with suppliers and internally
with employees. TXU’s implementation included the development of several industry-specific
custom compliance applications to further enhance its internal control and compliance man-
agement processes.
“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,” said, Steve Speer, Project Manager, TXU. “The addition-
al functionality provided a common front-end user interface as well as back-end integration
into 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 able
to scale to 16,000 users and require minimal training, it also needed to accommodate TXU’s
shared 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 payable
system for disbursement.
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6. 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 TXU
to streamline the invoice submission and approval processes, take advantage of early pay
discounts and reduce the costs associated with processing non-capitalized invoices.
Additionally, TXU now has a solution that facilitates Sarbanes-Oxley compliance, as all
approvals are captured with electronic signature, allowing the company to maintain a uniform
process 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 cost
savings from process improvements in our interactions,” said Speer. “Internally, the savings
we’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 various
salaries spending hours on transaction creation, submission and approval that can now be
applied to generating sales and managing the company? The system has definitely paid
for itself and delivered significant ROI.”
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7. SUMMARY
Challenge: In order to retain its edge in an increasingly competitive marketplace within
the energy industry, TXU wanted to increase its operational efficiency within Accounts Pay-
able, enhance its customer service operations and dramatically reduce the company’s annual
information technology operation costs.
Strategy: With an increased corporate focus on process improvement, the company
invested in Apptricity’s Jetstream solutions for Invoice Management, P-Card Management,
Expense Management and several additional customized applications like Boots Compliance
Management.
Results: Leveraging Jetstream’s integrated solution, TXU can efficiently process over
$1 billion annually in non-capital procurement transactions and has improved its business
operations including process compliance, procure-to-pay turnaround and Sarbanes-Oxley
compliance.
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