United Utilities Drives Value with SAP Sourcing OnDemand

Colette Conroy, Lead Contract Formulator, United UtilitiesMark Ellis, SVP of OnDemand LoB Sourcing, SAP

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Cost savings is the top priority for procurement over the next three years.

Source: CPO Rising 2011, Ardent Partners LLC

Procurement’s top priority

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Strategic sourcing

Drive sourcing best practices

through projects

Generate cost savings through RFx and auctions

Gain insight into activities through

user-friendly dashboards

Save time with sourcing process automation

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Contract lifecycle management

Gain full visibility into

contracts via a

repository

Gain control over your contract management

Standardize legal contract

creation

Provide security with electronic signatures

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Supplier management

Help ensure top supplier

performance with scorecards

Empower suppliers with self-service capabilities

Gain visibility into suppliers via a

repository

Foster close supplier relationships through collaboration

United Utilities 2012/13United Utilities Drives Value with SAP Sourcing OnDemand

Colette ConroyLead Contract Formulator

United Utilities in the United Kingdom

London

North West of England

What do United Utilities do

Regulators

How do we do it

Prior to SAP Sourcing OnDemand

Present UU

Present Savings

Soft cost savings have been generated by reducing costs through less labour, more efficiency, productivity increase, more usable information, better compliance, better work environment. One version of the truth

Hard SavingsGenerated reducing head count, reducing storage costs, but mostly by carrying out auctions

Future - Benefits from – Integration with ECC6 (P2P)

E Tendering Work Flow

Contract Award Management

Contract Management

E Auction

Supply Chain Phase 1

New Instance of SAP “Req

to BACS”

OCR read invoices

InventoryManagement

Spend Analytics

Additional Contract Management Functionality

Catalogues

Front EndPortal

Supplier Self Service

Workflow for mismatches

Payment ByBACS

ManagementReporting

Automatic loading of conformed contracts

Amazon Dot Com type of order generation

Good search engines for Requisitioners to find contracts suppliers and items

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Supplier Relationship Management withinSAP Sourcing OnDemand

What will we do together?

End to end process reviews

Risk reduction

Supplier innovation

Shared incentives

J oint Relationship Management

(J RM)

Supplier Relationship

Management (SRM)

Contract Management

AM&D & OPS owned for contractors on agreed list (£10m+). Budget owner / Supply Chain operated for suppliers of goods and services

Contract Administration and Service Management

Common Model Owned by Supply Chain

Future plans - what UU want

• Auctions enhancements

• United Utilities in line with most Utility companies in the UK generally do not procure on price alone, quality plays a huge part in our decisions.

Utilities Contracts Regulations 2006, Article 56• (13) During each phase of an electronic auction, the utility

—• (a) shall instantaneously communicate to all economic

operators participating in the auction at least sufficient information to enable them to ascertain their relative rankings in the auction at any time;

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Summary

• We have a fair, transparent and consistent way to procure goods, services and works

• We have reduced our cost to serve

• We have greater visibility of our savings

• Our reporting facilities gives greater transparency and can be accessed easily

• SAP Sourcing OnDemand is one step nearer to one

version of the truth

Thank You!

Visit SAP Sourcing OnDemand at http://sourcing.ondemand.com/