Finalist: 2024 Best Run SAP Intelligent Spend Business Network (ISBN)
Austnet: An Australian energy delivery services business, previously government-owned, faced challenges with legacy infrastructure and procurement systems. By implementing SAP Ariba and SAP Concur solutions, the company achieved significant cost savings, improved efficiency, and ensured compliance with modern regulations. Download the DocumentSAP Australia and New Zealand
Best Run Awards 2024
Best Run Awards 2024
Best Run SAP
Industry WebsiteProduct and Services Featured SAP Solutions
https://www.AusNetservices.com.au/Electricity and gas distribution and
electricity transmission
SAP Ariba; SAP Concur
AusNet is an Australian energy delivery services business, owning and operating more than $12 billion in assets, including the Victorian electricity transmission
network, an electricity distribution network and a gas distribution network. AusNet is one of five electricity distributors and one of three gas distributors in Victoria.
AusNet also has a significant presence in the contestable connections space and is engaged in connecting wind farms, solar farms, batteries and micro-grids to the
network.
The company employs approximately 1,300 people, and its mission is to actively invest in projects that increase network capacity, improve reliability and introduce
more renewable energy into the network.
Previously government-owned, AusNet faced significant challenges rooted in its legacy of static and traditional infrastructure – poles, wires, transmission towers,
and gas pipelines. Traditionally, there wasn’t a pressing need for advanced procurement systems as the operation largely depended on a consistent set of
equipment and resources.
As the landscape of energy production has shifted dramatically toward distributed energy sources such as wind, solar, batteries and hydro there is a new demand
for efficient and dynamic procurement and spending management processes to cope with the fast-moving energy transition and the diverse and geographically
dispersed energy assets.
Connecting Communities with SAP Ariba
Ausnet
Intelligent Spend and Business Networks
Utility
Industry WebsiteProduct and Services Featured SAP Solutions
https://www.AusNetservices.com.au/Electricity and gas distribution and
electricity transmission
SAP Ariba; SAP Concur
AusNet is an Australian energy delivery services business, owning and operating more than $12 billion in assets, including the Victorian electricity transmission
network, an electricity distribution network and a gas distribution network. AusNet is one of five electricity distributors and one of three gas distributors in Victoria.
AusNet also has a significant presence in the contestable connections space and is engaged in connecting wind farms, solar farms, batteries and micro-grids to the
network.
The company employs approximately 1,300 people, and its mission is to actively invest in projects that increase network capacity, improve reliability and introduce
more renewable energy into the network.
Previously government-owned, AusNet faced significant challenges rooted in its legacy of static and traditional infrastructure – poles, wires, transmission towers,
and gas pipelines. Traditionally, there wasn’t a pressing need for advanced procurement systems as the operation largely depended on a consistent set of
equipment and resources.
As the landscape of energy production has shifted dramatically toward distributed energy sources such as wind, solar, batteries and hydro there is a new demand
for efficient and dynamic procurement and spending management processes to cope with the fast-moving energy transition and the diverse and geographically
dispersed energy assets.
Connecting Communities with SAP Ariba
Ausnet
Intelligent Spend and Business Networks
Utility
Challenges
AusNet was facing considerable challenges as it transitioned to a new business model. This became evident as the company began to
outsource many of its operational tasks and moved from a predominantly hands-on labour force to an outsourced model, with an
intricate network of third-party relationships and contracts.
In the past, AusNet's procurement strategy often favoured long-term vendors, overlooking the potential benefits of alternative suppliers
and broader market competition. A better framework for market-based sourcing was needed, one that featured competitive tendering
and could open-up opportunities for more transparent and equitable vendor selection.
To ensure compliance and efficacy throughout its procurement process, the business also wanted to centralize its contract management
system, which would allow it to better manage and streamline interactions with various suppliers.
To operate in a faster moving and increasingly complex environment with more suppliers, more transactions and new areas of spend,
AusNet also required a far more automated and information rich environment for purchase to pay management. Legacy systems and
processes were manual and cumbersome, lacked transparency and were unable to handle rapid change. In addition to acting as a
barrier to undertaking strategic sourcing for key areas of spend, these legacy systems also resulted in late supplier payments.
AusNet was facing considerable challenges as it transitioned to a new business model. This became evident as the company began to
outsource many of its operational tasks and moved from a predominantly hands-on labour force to an outsourced model, with an
intricate network of third-party relationships and contracts.
In the past, AusNet's procurement strategy often favoured long-term vendors, overlooking the potential benefits of alternative suppliers
and broader market competition. A better framework for market-based sourcing was needed, one that featured competitive tendering
and could open-up opportunities for more transparent and equitable vendor selection.
To ensure compliance and efficacy throughout its procurement process, the business also wanted to centralize its contract management
system, which would allow it to better manage and streamline interactions with various suppliers.
To operate in a faster moving and increasingly complex environment with more suppliers, more transactions and new areas of spend,
AusNet also required a far more automated and information rich environment for purchase to pay management. Legacy systems and
processes were manual and cumbersome, lacked transparency and were unable to handle rapid change. In addition to acting as a
barrier to undertaking strategic sourcing for key areas of spend, these legacy systems also resulted in late supplier payments.
Solution
A comprehensive program of work was initiated to improve AusNet’s strategic procurement and procure-to-pay (P2P) systems. Endorsed by the
executive team, it included the creation of a specialized project and change management team to guarantee a successful implementation.
Firstly, new policies and processes were implemented for strategic procurement applying a consistent set of rules and processes across all areas of
spend. For strategic sourcing, Ariba tenders were used exclusively to standardize market interactions, ensure compliance, and uphold best practice
probity and value creation.
Contracts, along with all related documents, variations, and extensions, were securely archived within the Ariba contracts module making them
easily accessible and linked to their initial sourcing projects. This has ensured that all pertinent information is readily available at renewal or review,
enabling faster and more informed decision-making.
A significant number of impactful initiatives were undertaken within the P2P operations space as part of this comprehensive program of work
Ariba Contracts module was upgraded with a new contract template to standardize the contract creation, negotiation, approval, and execution of
contracts, including variations, extensions, and terminations. Integrating Ariba with SAP facilitated a seamless flow of contract information between
the two systems, establishing Ariba as the source of truth for all procurement contracts.
Furthermore, the implementation of the Ariba Network for supplier collaboration significantly improved visibility and automated procurement
transactions for reduced lead time. The adoption of the Supply Life Cycle (SLP) module addressed the complexities of supplier onboarding in a
rigorous regulatory landscape, particularly concerning financial fraud and compliance with modern slavery laws.
The development of self-service tools utilizing SAP Fiori applications has provided enhanced visibility to contracts with existing, vetted suppliers and
implementation of SAP Concur for low value discretionary spend for a streamlined procurement processes.
A comprehensive program of work was initiated to improve AusNet’s strategic procurement and procure-to-pay (P2P) systems. Endorsed by the
executive team, it included the creation of a specialized project and change management team to guarantee a successful implementation.
Firstly, new policies and processes were implemented for strategic procurement applying a consistent set of rules and processes across all areas of
spend. For strategic sourcing, Ariba tenders were used exclusively to standardize market interactions, ensure compliance, and uphold best practice
probity and value creation.
Contracts, along with all related documents, variations, and extensions, were securely archived within the Ariba contracts module making them
easily accessible and linked to their initial sourcing projects. This has ensured that all pertinent information is readily available at renewal or review,
enabling faster and more informed decision-making.
A significant number of impactful initiatives were undertaken within the P2P operations space as part of this comprehensive program of work
Ariba Contracts module was upgraded with a new contract template to standardize the contract creation, negotiation, approval, and execution of
contracts, including variations, extensions, and terminations. Integrating Ariba with SAP facilitated a seamless flow of contract information between
the two systems, establishing Ariba as the source of truth for all procurement contracts.
Furthermore, the implementation of the Ariba Network for supplier collaboration significantly improved visibility and automated procurement
transactions for reduced lead time. The adoption of the Supply Life Cycle (SLP) module addressed the complexities of supplier onboarding in a
rigorous regulatory landscape, particularly concerning financial fraud and compliance with modern slavery laws.
The development of self-service tools utilizing SAP Fiori applications has provided enhanced visibility to contracts with existing, vetted suppliers and
implementation of SAP Concur for low value discretionary spend for a streamlined procurement processes.
Impact
Operational Excellence:
• 56% Team Efficiency improvement
• 74% of invoices being submitted via
Ariba
• 87% of PRs are raised using the
simplified SAP Fiori tool
• 91% of PRs automatically
converted to POs within 1 hour
Connecting Communities:
• 100 tenders running concurrently.
• 85% on-time payment to suppliers
to maintain AusNet’s reputation
Cost Savings & Compliance:
• Cost savings $120m in 3 years
• 91% of PO spend through Ariba
network in 3 years.
• 80% of suppliers with more than
$150K spend moved to Ariba
network.
AusNet’s overhaul of its procurement strategy and P2P processes have led to a number of benefits:
Better contract management: An integrated contract management system was established to replace the outdated and fragmented storage of contractual documents – an upgrade
that drastically cut down on administrative bloat and potential compliance issues. With Ariba, AusNet managed to ensure compliance with best procurement practices, running
approximately 100 tenders concurrently, thus maximizing cost-effectiveness and efficiency.
Cost savings: AusNet’s has realised significant cost savings as a result of enhancing its procurement systems and implementing SAP Ariba. By conducting a consistent and
streamlined tender process across all spend categories, the business achieved $120 million in savings within the first three years.
On-time Payments: The enhanced auto-matching capability for invoices as a result of implementation of Ariba network, resulted in a higher percentage of on-time payments to our
vendors. Over the course of three years, our utilization of the Ariba Network rose from 0% to an impressive 91% of PO Spend, driving higher levels of auto-matching and ensuring
85% of payments were made on time, mitigating the risk of late payment penalties, strengthen vendor relationships thereby enabling our business to focus on strategic decisions.
Risk Mitigation and Compliance: The adoption of the Supply Life Cycle (SLP) module addresses regulatory concerns and minimizes risks related to supplier engagement. This
ensures that all suppliers meet AusNet’s stringent criteria, reducing the risk of financial fraud and ensuring compliance with modern slavery laws.
Standardization and efficiency: Standardizing contract processes, integrating Ariba contract module to SAP and establishing Ariba contract module as the source of truth for all
procurement contracts led to streamlined operations, reducing operational inefficiencies and ensured data accuracy across systems thereby facilitating uninterrupted business
operations
Optimized procurement processes: Leveraging SAP Fiori's robust tools for P2P operations and enhanced tracking and analysis through Ariba-SAP integration along with
automation of administrative tasks, AusNet was able to consolidate and re-shore its entire outsourced Procure to Pay transactional activities, achieving efficiency with just 13
personnel, a significant reduction from the original team of 30.
Operational Excellence:
• 56% Team Efficiency improvement
• 74% of invoices being submitted via
Ariba
• 87% of PRs are raised using the
simplified SAP Fiori tool
• 91% of PRs automatically
converted to POs within 1 hour
Connecting Communities:
• 100 tenders running concurrently.
• 85% on-time payment to suppliers
to maintain AusNet’s reputation
Cost Savings & Compliance:
• Cost savings $120m in 3 years
• 91% of PO spend through Ariba
network in 3 years.
• 80% of suppliers with more than
$150K spend moved to Ariba
network.
AusNet’s overhaul of its procurement strategy and P2P processes have led to a number of benefits:
Better contract management: An integrated contract management system was established to replace the outdated and fragmented storage of contractual documents – an upgrade
that drastically cut down on administrative bloat and potential compliance issues. With Ariba, AusNet managed to ensure compliance with best procurement practices, running
approximately 100 tenders concurrently, thus maximizing cost-effectiveness and efficiency.
Cost savings: AusNet’s has realised significant cost savings as a result of enhancing its procurement systems and implementing SAP Ariba. By conducting a consistent and
streamlined tender process across all spend categories, the business achieved $120 million in savings within the first three years.
On-time Payments: The enhanced auto-matching capability for invoices as a result of implementation of Ariba network, resulted in a higher percentage of on-time payments to our
vendors. Over the course of three years, our utilization of the Ariba Network rose from 0% to an impressive 91% of PO Spend, driving higher levels of auto-matching and ensuring
85% of payments were made on time, mitigating the risk of late payment penalties, strengthen vendor relationships thereby enabling our business to focus on strategic decisions.
Risk Mitigation and Compliance: The adoption of the Supply Life Cycle (SLP) module addresses regulatory concerns and minimizes risks related to supplier engagement. This
ensures that all suppliers meet AusNet’s stringent criteria, reducing the risk of financial fraud and ensuring compliance with modern slavery laws.
Standardization and efficiency: Standardizing contract processes, integrating Ariba contract module to SAP and establishing Ariba contract module as the source of truth for all
procurement contracts led to streamlined operations, reducing operational inefficiencies and ensured data accuracy across systems thereby facilitating uninterrupted business
operations
Optimized procurement processes: Leveraging SAP Fiori's robust tools for P2P operations and enhanced tracking and analysis through Ariba-SAP integration along with
automation of administrative tasks, AusNet was able to consolidate and re-shore its entire outsourced Procure to Pay transactional activities, achieving efficiency with just 13
personnel, a significant reduction from the original team of 30.
“”“AusNet has implemented a consistent procurement process across
all spending areas, ensuring high standards of integrity and
leveraging market competition to maximize value and ensure supply
security. Our strategic partnership with SAP and the use of Ariba
tools have significantly enhanced automation and operational
efficiency, which are essential to our purpose of connecting
communities with energy and accelerating a sustainable future.”
Mark Ellul, Chief Financial Officer, AusNet.
all spending areas, ensuring high standards of integrity and
leveraging market competition to maximize value and ensure supply
security. Our strategic partnership with SAP and the use of Ariba
tools have significantly enhanced automation and operational
efficiency, which are essential to our purpose of connecting
communities with energy and accelerating a sustainable future.”
Mark Ellul, Chief Financial Officer, AusNet.