CASE STUDY: TXU

BEST PRACTICES IN SPEND

MANAGEMENT

TXU Corporation Creates Added Business Efficiency, Operational Cost-Savings and Enhanced Customer Service with Apptricity Jetstream

5605 N. MacArthur Blvd., #900 Irving, TX 75038 USA Main: 214.596.0601 Fax: 214.596.0609 Toll Free: 800.693.2193

www.apptricity.com

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

Apptricity TXU Case Study Best Practices in Spend Management Page: 2

EXECUTIVE SUMMARY
TXU Corporation (TXU), a Dallas-based energy company, manages a portfolio of competitive regulated and unregulated energy businesses in North America, primarily in Texas. In the companys 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 consolidating 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 companys vision for creating cost-saving efficiency in these areas 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 employees, whether the purchases are product or service oriented. On the enterprise side of TXU, decentralized credit and non-capital procurement accounting functions challenged the companys ability to manage and enforce uniform processes and approvals. The extensive paper-based purchase, invoice and approval functions could take the company up to ten weeks to complete, minimizing TXUs opportunity to capture favorable 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 technology would also provide visibility into employee spending throughout the organization categorically and in aggregate to locate opportunities to negotiate additional corporate discounts for 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 scalability, 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 Apptricitys highly adaptable solutions for their flexibility and cost-effective scalability. Apptricity promised dynamic adaptability within an integrated solution that could be easily customized to TXUs 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. TXUs implementation included the development of several industry-specific custom compliance applications to further enhance its internal control and compliance management processes. In addition to interfacing with existing legacy systems, Apptricitys 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 additional 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, Apptricitys advanced service-oriented architecture allowed our business to replace several homegrown applications with a web-services based solution
TXUs solution set was customized to replicate business functions, as well as automate 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 TXUs shared services operating environment. As a shared services solution, Apptricitys suite of applications had to have common security, workflow, compliance and audit management functionality and provide consolidated reporting for various business units. Upon implementation, users were given the ability to enter multiple types of procurement invoices including materials, service, education, union compliance, P-Card, and others, and route them to the accounting department for distribution, coding and approval. The established workflow automatically advances approved invoices directly to the accounts payable system for disbursement.
Apptricity TXU Case Study Best Practices in Spend Management Page: 5

REAPING THE BENEFITS

Leveraging Apptricitys solution, TXU efficiently processed approximately $1 billion in non-capital procurement transactions in the first year after implementation alone. The implementation of Jetstream also resulted in process improvements such as enhanced process compliance, faster procure-to-pay turnaround and maximized use of personnel time -- including Accounts Payable 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-level 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. Its essential that we maintain positive supplier relationships and the Apptricity solutions 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 weve 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.

Apptricity TXU Case Study Best Practices in Spend Management Page: 6

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 Payable, enhance its customer service operations and dramatically reduce the companys annual information technology operation costs. Strategy: With an increased corporate focus on process improvement, the company invested in Apptricitys Jetstream solutions for Invoice Management, P-Card Management, Expense Management and several additional customized applications like Boots Compliance Management. Results: Leveraging Jetstreams 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.

Apptricity TXU Case Study Best Practices in Spend Management Page: 7

Copyright 1999-2013. Apptricity. All rights reserved. | Privacy Policy | rev.V.2, 030413