Finalist: 2024 Best Run SAP Intelligent Spend Business Network (ISBN)
Metro Trains Melbourne: By transforming its procurement processes with SAP Ariba, Metro Trains Melbourne achieved significant improvements in compliance, efficiency, and cost savings. Download the DocumentSAP Australia and New Zealand
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Best Run Awards 2024
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Industry WebsiteProduct and Services Featured SAP Solutions
Public Transport www.metrotrains.com.auAriba Buying and Invoicing
Ariba Sourcing and contracts
Ariba Commerce Automation
Success Factors
Business Tech. Platform
Ariba Preferred Service Enhanced
Edition
Ariba Buying and Invoicing
Ariba Sourcing and contracts
Ariba Commerce Automation
Metro Trains Melbourne Pty Ltd (MTM) is the operator of the Melbourne metropolitan rail network under agreement with Public Transport Victoria. As city’s metropolitan rail
service, they operate 226 six carriage trains across 998 kilometers of track, transporting 450,000 customers each day, providing a seamless transport solution to keep individuals
connected.
Procurement at Metro Trains Melbourne (MTM) is responsible to provide valued Business outcomes through sustainable & responsible supplier solutions for $1.2b spend
annually with 1000+ suppliers, with focus to increase value for money by exercising procurement expertise and leveraging economies of scale
MTM initiated transformation of their procurement systems and process with a view to strengthen policy and controls, enabling the transformation through technology with Ariba
and monitoring and measuring Purchase to Pay performance.
This transformation has delivered significant change and uplift in capability, agility, metrics, governance and compliance while delivering the goods and services required to run
the business.
Moving Melbourne with SAP Ariba
Metro Trains Melbourne
Intelligent Spend & Business Networks
Industry WebsiteProduct and Services Featured SAP Solutions
Public Transport www.metrotrains.com.auAriba Buying and Invoicing
Ariba Sourcing and contracts
Ariba Commerce Automation
Success Factors
Business Tech. Platform
Ariba Preferred Service Enhanced
Edition
Ariba Buying and Invoicing
Ariba Sourcing and contracts
Ariba Commerce Automation
Metro Trains Melbourne Pty Ltd (MTM) is the operator of the Melbourne metropolitan rail network under agreement with Public Transport Victoria. As city’s metropolitan rail
service, they operate 226 six carriage trains across 998 kilometers of track, transporting 450,000 customers each day, providing a seamless transport solution to keep individuals
connected.
Procurement at Metro Trains Melbourne (MTM) is responsible to provide valued Business outcomes through sustainable & responsible supplier solutions for $1.2b spend
annually with 1000+ suppliers, with focus to increase value for money by exercising procurement expertise and leveraging economies of scale
MTM initiated transformation of their procurement systems and process with a view to strengthen policy and controls, enabling the transformation through technology with Ariba
and monitoring and measuring Purchase to Pay performance.
This transformation has delivered significant change and uplift in capability, agility, metrics, governance and compliance while delivering the goods and services required to run
the business.
Moving Melbourne with SAP Ariba
Metro Trains Melbourne
Intelligent Spend & Business Networks
Challenges
MTM procures a diverse range of goods and services for the construction, operations and maintenance of the rail network; MTM’s suppliers are
critical resources for business in delivering Melbourne railway services to connect people and places.
Procurement’s role at MTM is to Move Melbourne and provide valued Business outcomes through sustainable & responsible supplier solutions.
Pre 2016, the procurement function, policy, process and systems were predominantly manual with low control, high risk and lacked agility.
MTM was performing well below benchmarks for key procurement metrics.
Poor adoption levels against industry best practices resulted in process and compliance challenges for the customer leading to organizational
losses. This also meant that there was great stakeholder frustrations due to delays and inefficiencies. MTM recognized the need to drive and
accelerate organizational buy in, engagement and adoption, to maximise the effectiveness of purchasing and payments for Metro Trains
Melbourne’s stakeholders, suppliers and internal teams.
The need for improvement was identified in many areas including:
• Making compliance easier,
• Sourcing and Contract Management simplification and user experience improvements,
• Enabling easier and better buying –Catalogues, Sole Source, approvals, etc.
MTM procures a diverse range of goods and services for the construction, operations and maintenance of the rail network; MTM’s suppliers are
critical resources for business in delivering Melbourne railway services to connect people and places.
Procurement’s role at MTM is to Move Melbourne and provide valued Business outcomes through sustainable & responsible supplier solutions.
Pre 2016, the procurement function, policy, process and systems were predominantly manual with low control, high risk and lacked agility.
MTM was performing well below benchmarks for key procurement metrics.
Poor adoption levels against industry best practices resulted in process and compliance challenges for the customer leading to organizational
losses. This also meant that there was great stakeholder frustrations due to delays and inefficiencies. MTM recognized the need to drive and
accelerate organizational buy in, engagement and adoption, to maximise the effectiveness of purchasing and payments for Metro Trains
Melbourne’s stakeholders, suppliers and internal teams.
The need for improvement was identified in many areas including:
• Making compliance easier,
• Sourcing and Contract Management simplification and user experience improvements,
• Enabling easier and better buying –Catalogues, Sole Source, approvals, etc.
Solution
Since 2019, MTM has embarked on a transformation journey, prioritizing policy reinforcement, technological advancement with Ariba at its core, and
meticulous monitoring of Purchase to Pay performance.
Choosing to deepen their investment in Ariba capabilities stemmed from its proven business process maturity, established customer trust, and ongoing
product innovation. FourPL, an Australian company specializing in Spend Management and Supply Chain visibility, was engaged to assess, advise, and
develop a roadmap for improvement initiatives, leading to enhanced purchasing and payment processes with SAP Ariba. This transformation yielded
significant process improvements, bolstering capability, agility, metrics, governance, and compliance.
Since then, Metro has partnered with our SAP CSP’s and the boarder SAP organisation to make step changes to adoption and effectiveness of the solution
to remove transactional activity in the business delivery areas of Metro freeing their time to focus on operational delivery.
MTM's emphasis on process governance, technological enablement, and skill development, coupled with periodic benchmarking, propelled the company
from below-average to above-average performance against external benchmarks, with some areas excelling to best-in-class levels. Leveraging Ariba's
product maturity, internal upskilling, expert recruitment, and strategic partnerships, MTM achieved notable improvements in metrics and performance.
Recently, Metro Trains Melbourne enlisted SAP Ariba Preferred Success Expanded Edition(PSEE), a step up from Application Management Services (AMS)
to sustain and advance these enhancements within the solutions
By leveraging SAP Preferred Success, MTM further enhanced adoption enablement and metrics, driving continuous improvement and optimizing
procurement processes, thus significantly contributing to its operational excellence and positive business outcomes
Since 2019, MTM has embarked on a transformation journey, prioritizing policy reinforcement, technological advancement with Ariba at its core, and
meticulous monitoring of Purchase to Pay performance.
Choosing to deepen their investment in Ariba capabilities stemmed from its proven business process maturity, established customer trust, and ongoing
product innovation. FourPL, an Australian company specializing in Spend Management and Supply Chain visibility, was engaged to assess, advise, and
develop a roadmap for improvement initiatives, leading to enhanced purchasing and payment processes with SAP Ariba. This transformation yielded
significant process improvements, bolstering capability, agility, metrics, governance, and compliance.
Since then, Metro has partnered with our SAP CSP’s and the boarder SAP organisation to make step changes to adoption and effectiveness of the solution
to remove transactional activity in the business delivery areas of Metro freeing their time to focus on operational delivery.
MTM's emphasis on process governance, technological enablement, and skill development, coupled with periodic benchmarking, propelled the company
from below-average to above-average performance against external benchmarks, with some areas excelling to best-in-class levels. Leveraging Ariba's
product maturity, internal upskilling, expert recruitment, and strategic partnerships, MTM achieved notable improvements in metrics and performance.
Recently, Metro Trains Melbourne enlisted SAP Ariba Preferred Success Expanded Edition(PSEE), a step up from Application Management Services (AMS)
to sustain and advance these enhancements within the solutions
By leveraging SAP Preferred Success, MTM further enhanced adoption enablement and metrics, driving continuous improvement and optimizing
procurement processes, thus significantly contributing to its operational excellence and positive business outcomes
Impact
Operational Excellence:
• Touchless invoicing: from 36% to 70% (consistently
exceeding targets)
• Invoice to Approval cycle time moved from 26 days to 1
day (96% improvement)
• On time Trains Metro’s delivered 98.9% of scheduled trains
with 65,000 services running in April 24
• Time saved for internal teams – freed up transactional
time for operational teams to focus on delivery of trains
• Improved cash flow for both Metro and Suppliers with
over70% of invoices being automated
Greater Visibility
• % spend associated with
contracts/catalog from 15% to 75% (5 fold
increase over FY21).
• Avoided cost increases to the tune of ~$5M.
Greater Adoption:
100+ Sourcing Events, 600+ contracts for $890M
spend, 41K + PO’s for over $1.2B spend through
Ariba, resulting in improved cost savings helping
MTM achieve 106% of target in FY23.
Compliance 66% of total metro spend is with
over 800 active suppliers
• Spend under contract: from 29% to 81%
(more than doubled and best in class).
• Improved management of Supplier
Financial risks by closing out over 16
Audit actions and
• Minimise risk of the business: addressed
unauthorized commitments before
spending any money with suppliers
Metro Trains Melbourne underwent a profound digital transformation, aligning with its purpose of Moving Melbourne with sustainable products and
services while achieving better commercial outcomes and enhancing user experience. With a focus on procurement processes, this resulted in
greater policy adherence. streamlined processes, empowered users through self-service capabilities and minimized administrative burdens.
Notably, procurement now has an enhanced value proposition, driving increased profitability, user experiences, and better supplier performance
management.
This evolution allowed Metro Trains Melbourne to shift its focus to high-value spend areas, ultimately leading to improved supplier pricing and
reduced lead times, thereby increasing the share of revenue. Overall, the project yielded cost reductions, boosted profit margins, and provided
valuable insights into spending patterns and market trends, positively impacting EBITDA, especially concerning project scopes.
SAP Ariba played a pivotal role in this transformation, catapulting the company to the top 25% in key performance metrics over the past few
years. By automating processes, mitigating risks, and fostering supplier relationships, SAP Ariba has become an integral part of Metro Trains
Melbourne's operational excellence, facilitating smoother operations and a profound impact on the community and customers alike.
The gain in Operational Excellence has enabled MTM to take additional important Projects like Metro Tunnel, which is vital for Victoria and Australia
growth.
Operational Excellence:
• Touchless invoicing: from 36% to 70% (consistently
exceeding targets)
• Invoice to Approval cycle time moved from 26 days to 1
day (96% improvement)
• On time Trains Metro’s delivered 98.9% of scheduled trains
with 65,000 services running in April 24
• Time saved for internal teams – freed up transactional
time for operational teams to focus on delivery of trains
• Improved cash flow for both Metro and Suppliers with
over70% of invoices being automated
Greater Visibility
• % spend associated with
contracts/catalog from 15% to 75% (5 fold
increase over FY21).
• Avoided cost increases to the tune of ~$5M.
Greater Adoption:
100+ Sourcing Events, 600+ contracts for $890M
spend, 41K + PO’s for over $1.2B spend through
Ariba, resulting in improved cost savings helping
MTM achieve 106% of target in FY23.
Compliance 66% of total metro spend is with
over 800 active suppliers
• Spend under contract: from 29% to 81%
(more than doubled and best in class).
• Improved management of Supplier
Financial risks by closing out over 16
Audit actions and
• Minimise risk of the business: addressed
unauthorized commitments before
spending any money with suppliers
Metro Trains Melbourne underwent a profound digital transformation, aligning with its purpose of Moving Melbourne with sustainable products and
services while achieving better commercial outcomes and enhancing user experience. With a focus on procurement processes, this resulted in
greater policy adherence. streamlined processes, empowered users through self-service capabilities and minimized administrative burdens.
Notably, procurement now has an enhanced value proposition, driving increased profitability, user experiences, and better supplier performance
management.
This evolution allowed Metro Trains Melbourne to shift its focus to high-value spend areas, ultimately leading to improved supplier pricing and
reduced lead times, thereby increasing the share of revenue. Overall, the project yielded cost reductions, boosted profit margins, and provided
valuable insights into spending patterns and market trends, positively impacting EBITDA, especially concerning project scopes.
SAP Ariba played a pivotal role in this transformation, catapulting the company to the top 25% in key performance metrics over the past few
years. By automating processes, mitigating risks, and fostering supplier relationships, SAP Ariba has become an integral part of Metro Trains
Melbourne's operational excellence, facilitating smoother operations and a profound impact on the community and customers alike.
The gain in Operational Excellence has enabled MTM to take additional important Projects like Metro Tunnel, which is vital for Victoria and Australia
growth.
“”“We have achieved significant business transformation with our change and system implementation, which
would have taken many years longer in other organisations. This was possible as a result of the Metro Train
Melbourne’s executive sponsorship and organisational commitment along this journey.
We now have over 80% of spend and volume going through our procurement systems and managed
processes, strong controls and compliance and performance metrics that are approaching best in class.
Ariba is a true enabler for our organisation creating value, control and compliance.”
Simon Rabl, Head of Procurement Operations, Metro Trains Melbourne.
“ MTM’s procurement and supply chain management bears no resemblance to what MTM inherited in 2009
when there were very few contracts, no purchasing system and frequent supply chain problems.
It has taken two evolutions to get where we are today, within these last three years taking MTM to a level
of which we can be proud and is consistent with MTR’s high quality brand. “
Pete Ryan, ED Finance and Commercial, Metro Trains Melbourne.
would have taken many years longer in other organisations. This was possible as a result of the Metro Train
Melbourne’s executive sponsorship and organisational commitment along this journey.
We now have over 80% of spend and volume going through our procurement systems and managed
processes, strong controls and compliance and performance metrics that are approaching best in class.
Ariba is a true enabler for our organisation creating value, control and compliance.”
Simon Rabl, Head of Procurement Operations, Metro Trains Melbourne.
“ MTM’s procurement and supply chain management bears no resemblance to what MTM inherited in 2009
when there were very few contracts, no purchasing system and frequent supply chain problems.
It has taken two evolutions to get where we are today, within these last three years taking MTM to a level
of which we can be proud and is consistent with MTR’s high quality brand. “
Pete Ryan, ED Finance and Commercial, Metro Trains Melbourne.