National Grid is a global utility involved with electricity transmission and gas distribution. The company serves the entire country in the UK and about seven million customers in the U.S. How did it build a foundation for the future?
“If I take a step back and look at procurement, why is it so difficult in a business? Why can’t it be like shopping at home?” asks Mark Paparelli, director procurement and indirects at National Grid.
It’s a good question, and one that led to the company’s decision to take its procurement into the cloud and start building a foundation for the future. It’s an approach that many companies are adopting, with 45% of the respondents to the Deloitte Global CPO Survey 2016 saying they are investing in cloud-based solutions, up from 26% the year before.
Paparelli admits that the systems at National Grid were antiquated point-to-point solutions, which was restricting growth and scalability. The company wanted a more lean and simple approach.
“This has transformed the business in a couple of ways,” Paparelli says. “One by making the buyer/seller relationship much stronger. It’s [also] really streamlined our processes,” he continues. “It’s taken out steps. You can go to a catalogue, snap on a picture, add it to your shopping cart, check out, and make a purchase order.”
The whole experience is akin to shopping at any one of the well-known online retailers. It’s live, easy, and highly intuitive, so much so that National Grid didn’t need to train any of its suppliers to use it.
It is also about saving the company money, which is a major goal for all procurement executives. In the Deloitte Global CPO Survey 2016, 74% of respondents put this as their top priority. At National Grid, Paperelli says, the company “probably saved about $2.2 million in the first year” and he is expecting the economies to increase in the future.
National Grid chose procurement solutions delivered by Deloitte and SAP Ariba Services as the way forward. Their involvement was pivotal to success. “Deloitte did play a significant role in showing us how the solutions could work, what aspects we should turn on, and how we could be successful.”
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