The Customer

Industry: Energy
Geographics: Headquartered in Kansas City, Missouri
Revenue: $40 billion, ranked No. 33 on Fortune 500
Employees: More than 7,000

PeopleSoft Products

• PeopleSoft Human Capital Management
• PeopleSoft Financial Management Solutions
• PeopleSoft Supplier Relationship Management

"PeopleSoft is the best win-win solution in the supply chain space — for our suppliers as well as for us." — Brett Carter, vice president of e-business and procurement

Business Challenge

Aquila wanted to:

• Organize its supply chain data in a format that could be used strategically to add value and generate process efficiencies.
• Move to paperless communication with suppliers.
• Reduce and ultimately eliminate maverick spending.
• Leverage its supplier base through strategic sourcing.

PeopleSoft Solution

PeopleSoft was the ideal supply chain management (SCM) solution for Aquila because the company was already using PeopleSoft for its ERP and HRMS backbone systems. PeopleSoft offered an innovative SRM solution with seamless integration, flexibility, and scalability.

Business Benefits

PeopleSoft is enabling Aquila to proactively address the business challenges listed above. In addition, PeopleSoft Pure Internet Architecture™ saves Aquila time and money by providing its employees and suppliers with universal access to applications anytime, anywhere.

Quantifiable Benefits

The process of creating a requisition to cutting a purchase order used to take a minimum of 45 days. With PeopleSoft, the same process now takes only 10 days.

Previously, it cost Aquila's AP group roughly six dollars to process a single paper invoice. With PeopleSoft, that cost has been virtually eliminated. Little things add up. For example, Aquila was processing 2,000 invoices per month with a single supplier; the $12,000 per month saved with PeopleSoft represents immediate ROI.

Aquila Energizes Supply Chain with PeopleSoft

Aquila operates electricity and natural gas distribution networks serving more than ove million customers in seven U.S. states and in Canada, the United Kingdom, and Australia. The company also owns and operates power generation assets. As of September 30, 2002, Aquila had total assets of $10.7 billion.

Strategic Supply Chain

"Supply chain has always been an issue for us," says Brett Carter, Aquila's vice president of eBusiness and procurement. "We need easily accessible data in a format that we can use — to extract value and add process efficiencies. We have struggledwith that on a daily basis.

"On both the indirect and direct sides, PeopleSoft Supply Chain Management acts as an intermediary for us. We have thousands of suppliers in our database. How do you manage that? PeopleSoft lets us identify our strategic relationships — now, we can look at our data from a different perspective, so that we can add value at many steps along the line. Specifically, PeopleSoft eProcurement gives us the ability to begin communicating with our strategic suppliers on a pure Internet, electronic platform."

Paperless Communication

Pure Internet Architecture may seem like a catch phrase — until you start adding up the tangible time and dollar savings. According to Carter, "We're taking our supplier relationships to the electronic world: we're communicating directly to the supplier without paper, and then that supplier is communicating back to us without paper. We've eliminated thousands and thousands of pieces of paper that would otherwise be ofloating around our organization looking for coding and sign-off, and other disruptions.

"Since we've had PeopleSoft SCM up and running, we've taken things to a whole new level, especially with the electronic purchase order and invoice pieces. For example, PeopleSoft's auto-replenishment lets us handle the entire reorder process automatically. It's very exciting."

Sourcing Strategically-Reducing Maverick Spending

PeopleSoft is helping Aquila rationalize its vast number of suppliers. Carter says, "PeopleSoft SCM gives us a tool to leverage our supplier base. What we're talking about is determining who you're spending your money with, and how much money you're spending with them. What we've been able to do with PeopleSoft is actually evaluate suppliers: determine which suppliers should be in a core group of our strategic suppliers.

"PeopleSoft lets us identify the strategic suppliers we're currently working with, bring them onto an electronic platform, and thereby leverage our spend with them. This is a benefit for our strategic suppliers, too: we give them an opportunity to participate in our electronic procurement model. They see it as a compelling advantage-they see it as an opportunity to gain more business."

Collaborative Real-Time Business

Pure Internet systems lead to collaborative relationships with suppliers. Visibility into systems is key. "We want to buy an end product from a supplier," says Carter. "If we can get the right kind of information from a supplier-automatically, electronically-then we don't have to spend money on handling that manually. When we have a truly collaborative relationship with a supplier, then they know what we know-because in the real-time enterprise, we can both get the information we need-it's literally at our fingertips."

Dinosaurs

What will happen to companies that don't take advantage of now-available technologies for supply chain management and electronic procurement? Carter has a definite opinion: "They'll become dinosaurs, if they aren't already-dinosaurs that just don't know that the ice age is coming. If they're smart, they'll get on board with technology that's available today: they'll use PeopleSoft as a real-time enterprise solution."

PeopleSoft, PeopleTools, PS/nVision, PeopleCode, PeopleBooks, PeopleTalk, and Vantive are registered trademarks, and Pure Internet Architecture, Intelligent Context Manager, and The Real-Time Enterprise are trademarks of PeopleSoft, Inc. All other company and product names may be trademarks of their respective owners. The information contained herein is subject to change without notice. Copyright ©2002 PeopleSoft, Inc.

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