Supplier Relationship Management Helps Leading Retailer Enhance Efficiency

The program to date has achieved better than a $4M ROI and will continue to grow as the users get more comfortable with using the system. PMO Director and Program Manager

The Situation

Faced with difficult macroeconomic conditions in play, a leading retailer offering home improvement products and services outlined a strategic initiative to drive efficiencies across its organization – in distribution, training, technology and expense management. The company selected Capgemini for the mandate owing to its strong industry and solution footprint. Capgemini was to undertake a holistic Supplier Relationship Management (SRM) transformation, supporting continual improvement and ongoing success.

The Solution

The solution was based on Oracle’s PeopleSoft Enterprise supplier relationship management which is an integrated suite of procurement applications that dramatically cut all supply management costs. In the retailer’s case it included integrating PeopleSoft eProcurement (Catalog Management, Strategic Sourcing, Contracts, eSupplier Connection and PeopleSoft eSettlements) with the retailer’s existing Oracle PeopleSoft Enterprise Financial Management applications.

Improving procurement processes and technologies were identified as areas for driving immediate savings. However, the retailer was using an older version of financial management applications that did not offer native best-in-class procurement functionality. The retailer elected to deploy the latest version of SRM with its existing financials to derive benefits from rich functionality, short time to value as well as an infrastructure that offered integrated procurement and financial management.

The implementation required approximately 85 interfaces between the two application versions, several of which required significant expertise to design and implement. This leadingedge implementation involved tight collaboration between the team members from the retailer, Oracle and Capgemini.

The Result

During the solution design and delivery,many of the retailer’s complex business processes were refined and made more efficient through adoption of leading practices, training of resources and automation with the PeopleSoft Enterprise supplier relationship management applications. The end-to- end procure-to-pay lifecycle was simplified and streamlined, paving the way for significant cost reduction amounting to millions of dollars per year.
Some of the tangible results achieved by the retailer include:
– Improved compliance to approval processes
– Improved compliance with contracts
– Lower requisition-to-order costs
– Reduced maverick spend
– Reduced equisition-to-order cycle time
– Improved visibility into spend
– Rationalized supplier base
– Exceeded ROI versus plan to date