United Utilities delivers £350,000 savings with self-service reporting

United Utilities PLC was created in 1995 through the merger of NorthWestWater and Norweb. The company's principal activities involve managing and operating regulated electricity distribution, and water and wastewater networks in NorthWest England, a region with a population of approximately seven million. United Utilities employs over 8,000 people in its core utility activities.

Over £1 billion is spent annually on purchasing materials and equipment such as sewage tunnels, safety jackets for on-site workers, and stationery. This amounts to nearly half of United Utilities' revenue. There was a need to understand company expenditure to keep costs to a minimum. However with 760 contracts, 6,500 vendors, 50,000 orders, and 140,000 invoices, each year to manage and process, the task was not simple. United Utilities partnered with Bluefin to implement a SAP Business Intelligence (BI) solution which would provide operational and management reporting across the entire procurement process 'from Req to Cheque'.

An inefficient reporting process

Prior to the SAP BI implementation, the supply chain department relied on external consultants for data analysis and purchasing reports. The  high volume and heterogeneous nature of the procurement data meant this was time consuming and complicated. It involved sourcing data from disparate systems and consolidating it manually in spreadsheets which was an expensive process, costing approximately £350,000 annually.

"To gain greater visibility and control over £1bn of spending, we needed to be able to easily run ad-hoc spend and procurement process reports and to carry out data analysis more efficiently. We also wanted to reduce costs by eliminating the need for external consultancy services in this area."
"It was clear from these challenges we had a strong business need for an accurate and flexible information management tool, which would enable United Utilities to consolidate the data held across different systems." Steve Young, Procurement Manager, Special Projects, United Utilities

Rolling out SAP BI

Following guidance from Bluefin, United Utilities spent months cleansing and consolidating its data before commencing the SAP BI implementation. The solution required the merging of data from a number of stand-alone systems. These included SAP R/3 MM and FI for managing procurement, Trakka for contract management, Purchasing Cards, and Supplier Care for invoice parking. External stock and order data provided by secure feed from logistics partner, DHL, was also consolidated.

"Bluefin stood out as a company that understood both our business and technical needs and it had the specialist knowledge and experience we required for this project. We were also looking for a company which could work with Vertex, which manage our core IT systems. Bluefin had an established relationship with Vertex so we knew it would be no problem for them to work together." Steve Young, Procurement Manager, Special Projects, United Utilities

A dedicated Bluefin team worked with United Utilities to define the company's requirements which led to a strategy and roadmap to achieve the defined objectives. Bluefin assisted United Utilities in putting together a blueprint of all its data sources within the supply chain covering the four principle data areas: vendor data, contract data, category data (i.e. category of spend, such as vehicles), and spend value data.

Throughout the seven month project, Bluefin worked closely with key users from the supply chain, IT, project and support staff departments.Working hand-in-hand with these different business areas enabled Bluefin to identify the key requirements and optimise the data model to meet the specific demands of United Utilities' procurement processes. Final web reports could then be designed for users from the supply chain SAP Enterprise Portal.

Before going live, 64 people were trained on how to run the reports. There were nine super-users who were closely involved with the project to resolve any subsequent issues. Currently, an 80 strong supply chain team use the system to enhance their day-to-day work and decision making Impressive data management helps add value to the business.

Key benefits

  • Clear picture of spend and performance of the procurement process across United Utilities.
  • Fast and easy access to accurate.
  • Supply chain team has more timespend on strategic issues and delivering greater value to the business.
  • £350,000 saved annually in external consultancy costs for data analysis reporting.
  • Quick access to performance and process reporting statistics.

The implementation of a BI solution has provided United Utilities with significant business benefits. The company now has a clear picture of spend, and of the performance of the procurement process across the company. The solution automatically loads data overnight, providing a single, current and consolidated view of the entire supply chain's key business data.

This was seen as an impressive improvement.

"Extracting data and integrating the information required, from disparate systems and spreadsheets, used to take weeks. The process of; accessing data is now much quicker than before, and running reports is a rapid and straightforward process."
"This reduces the work burden on our supply chain team, which means they can spend more time on strategic issues such as negotiating better contracts, and therefore deliver greater value to the business." Steve Young, Procurement Manager, Special Projects, United Utilities

Supply chain managers now have up-to-date dynamic web reports on total spend, whether procured using SAP or not. They also have reports on key process performance indicators, such as the number of retrospective orders, mismatched invoices, and the time taken between key supply chain events. This analysis can be sliced and diced by multiple business characteristics, such as product category, vendor, payment stream, business area, requisitioner, calendar month/year and fiscal period.

"At the end of the day, data is only data – it's what you actually do with it that counts."
"Before implementing BI, purchasing decisions were sometimes difficult due to lack of timely access to accurate and consistent information. This access to intelligent and accurate information is helping us to improve the quality of our purchasing decisions, as well as to dramatically reduce the risk of unnecessary spending."
"We're saving £350,000 a year because we no longer need to use external consultants to analyse our spending data." Steve Young, Procurement Manager, Special Projects, United Utilities

Continued support from Bluefin

Bluefin continues to support United Utilities' SAP BI system on a daily basis. This helps to maximise data; integrity and availability for reporting purposes. Bluefin also provides on and off-site development services to ensure the solution keeps pace with the business.

"Bluefin has been critical to the whole project. The team shared our goals of making the project a success, and has provided guidance and added value throughout the process. Working as a team we have delivered a project on time, and within budget, which has been well received by those who use it." Steve Young, Procurement Manager, Special Projects, United Utilities

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