Uso: riservato aziendale 1 eProcurement strategy Case: Enel Spa Ermanno Boeris Bratislava, February 2007
Jan 17, 2016
Uso: riservato aziendale1
eProcurement strategy
Case: Enel Spa
Ermanno Boeris
Bratislava, February 2007
Uso: riservato aziendale2
Our Mission
Enel in brief
Our mission is to be the most efficient, market driven, quality focused provider of power and gas creating value for our customers, shareholders and people.
Reducing power generation costs through plants conversion and alignment of our other
operating costs with international best practice;
Increasing electricity generated from renewable resources;
Growing natural gas distribution business in Italy, where we are the second largest distributor;
Extracting value from the integrated management of electricity and gas services, and meeting
our operating efficiency targets in the distribution and sale of electricity and gas;
Expanding our operations outside Italy particularly in countries where we are already present or
where market liberalization and privatization efforts are in progress, allowing us to exploit the
skills and experience we have acquired in the Italian market.
Our Strategy
Uso: riservato aziendale3
Enel Group structure
Board of directors
Chief Executive Officer and General Manager
Generation and Energy Management
MarketInfrastructures and
networkInternational
Corporate Activities
Chairman
(F.Conti)(P.Gnudi)
(S.Fontecedro) (F.Starace) (L.Gallo) (F.Conti a.i.)
Uso: riservato aziendale4
Results overview
1H2005 1H2006 %
Revenues 16,152 19,065 18%
Ebitda (1) 4,202 4,361 3.8%
Group Net income 1,915 1,978 3.3%
of which net ordinary income (2)
1,587 1,722 8,5%
Net debt (3) 12,312 14,077 14.3%
Millions €
(1) 1H05 EBITDA restated(2) 1H05 net of Euro 328mn capital gain on Terna disposal. 1H06 net of Euro 256 mn income on Wind-Weather share transaction(3) 1H05 figure as of December 31,2005
Uso: riservato aziendale5
La presenza di Enel nel mondo
ROMANIA51% of Distribution companies Banat e Dobrogea• 1.4 million customers
RUSSIANorth Western thermal power plant management contract 450 MW
• 1.592 MW Thermal• 671 MW Hydroelectric• 600,000 customers!
80% of EUFR:• 294 MW Wind• 89 MW Hydroelectric• 62 MW Cogeneration
SPAIN
BULGARIA
67% of Maritza East III:• 732 MW Thermal
5% Powernext
Europe: 4.005 MW and 2 million customers North and Latin America565 MW
Data as of Aprile 15 1th 20041 – On the regulated market
• 286 MW Hydroelectric• 67 MW Wind• 21 MW Biomass and Biogas
• 171 MW Hydroelectric• 20 MW WindSLOVACCHIA
66% of Slovenske Elektrarne•6.881 MW
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eProcurement project brings a common vision on the process
Vendors Vendors MgmtMgmt
Vendors Vendors MgmtMgmt
TenderingTenderingTenderingTenderingContract Contract fulfillmentfulfillmentContract Contract fulfillmentfulfillment
Enel eProcurement
model
Vendors Scouting• Portal• On-line qualification
Economical offer and negotiation
• Tender mgmt• On line tender system
Contract Mgmt• Electronic catalogue• Electronic data exchange
(EDI)
Comunication(contractual and managerial)
• Enel Portal
Vendors Evaluation
• Vendor Rating
Technical offers
Sistema di codifica prodotti
Linee Guida e Regolamenti
7
TasksPortale Acquisti
WebEDI
Catalogue
Aste e Gare online
Scouting/RFI/RFQ
Strumenti Operativi
Abilitatori del processo
Uso: riservato aziendale7
• Implementation of controlling activities
• Extensive use of strategic sourcing• Broader use of Framework
Agreements• “Compliance” improvements• Lower fragmentation on spending• Improved efficiency• Centralized management and
controland local operational activies• Use of new methodology (Electronic
catalogue, e-tender, etc…)
• Implementation of controlling activities
• Extensive use of strategic sourcing• Broader use of Framework
Agreements• “Compliance” improvements• Lower fragmentation on spending• Improved efficiency• Centralized management and
controland local operational activies• Use of new methodology (Electronic
catalogue, e-tender, etc…)
AfterAfterAfterAfter
Extensive use of microcontracts Poor knowledge of contracted
amounts No synergies within the whole
group Low “compliance” on existing
Framework Agreement Split spending Technical and tactical aspects
overcome strategic issues Lack of efficiency in the process “Traditional” purchasing approach
Extensive use of microcontracts Poor knowledge of contracted
amounts No synergies within the whole
group Low “compliance” on existing
Framework Agreement Split spending Technical and tactical aspects
overcome strategic issues Lack of efficiency in the process “Traditional” purchasing approach
BeforeBeforeBeforeBefore
Results of eProcurement projects implementation
The new role of buyer
Uso: riservato aziendale8
“On-line” tenders follows traditional procurement steps
ENEL uses a web based application that allows any buyer to generate, customize and launch tenders of any kind of goods, services and works.
ECONOMIC OFFER(“Closed
Envelope”)
TECHNICAL OFFER
INITIAL PHASE -
ANNOUNCEMENT (exchange of technical
infos )
ECONOMIC OFFER(Tender)
NEGOTIATION PHASE
AWARDING
On Line tender follows traditional steps of any negotiation
Higher interaction with vendors
Better knowledge of markets
Improve efficiency, transparency, traceability
Achievable benefits
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Electronic Catalogue
RequesterIssue Request
Request for Purchase
ChiefApprove RfP
SupplierReceive order
Send Order
The electronic catalogue is a simple and shared tool that allows end-users to order materials listed in the catalogue. The catalogue is the results of a Framework Contract negotiated for all ENEL by Central Procurement Office
Request for purchases issued through catalogue
Electronic approval workshop
Receive goods and control on invoices payments
ERP
System
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Improvement area of electronic catalogue
Reduce micro-contracts
Semplify management of requests and partial contracts
Scale EconomyScale Economy
Despite the complexity of the implementation path, with the electronic catalogue there is an high rate of return considering price discounts and process efficiency gains.Achieved benefits
Prices dispersionPrices dispersion
Process costsProcess costs
Rationalize spending
Concentrate spot purchases
Same price applicable to any office or power plant
Extented use of framework agreement
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Exchange of technical and administrative data
EDI
Internet
EnelPartner
XMLXML
Semplify realization activities
Reduced management costs
High compatibility between different hardware and software
The Web-EDI based systems uses internet as communication channel allowing the transmission of data and document with very low costs (almost zero)
Major strong points
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Tender
Catalogue
QualificationOver 10.500 suppliers registered and out
of those 1.880 already pre-qualified
PortalAvg. Visits by month
Reduced costs by contract standardization
2.617 tenders (of those ca.78% on-line) for a value of 2.057 mln € and average savings of 15% • Reduced time to qualify vendors
• Reduced costs on documentation handling
• Ca.60 contracts (with 50 suppliers)• Increased compliance on Framework Agreements
• Increased number of tenderers• Improved quality of process
• Ca. 80 link/month per visitor• Publishing of tenders • Access to on-line documentation
Achieved results
WebEDIExchanged documents: 677.620• Of those invoices: 178.096• Other administrative documents: 361.786• Other technical documents: 137.738
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Thank you for the attention