Business goals
- Reduce reliance on manual updates to address changes required by policy changes
- Reduce contract cycle time
- Increase user productivity, refocusing on high value, revenue-producing activities
- Cost reduction and cost avoidance
Results
- Initial solution delivered in 14 weeks
- Automated process expected to save 12,000 hours annually
- $2 million value creation
- $750,000 cost reduction
- $500,000 cost avoidance
“Reduction of manual processes and duplicate entry has allowed procurement resources to redirect their time to higher value activities”
Chief Procurement Officer, Oil & Gas Supermajor
Challenge and vision
Reduce contract cycle time.
This oil & gas supermajor was committed to reducing contract cycle time, which is a measurement of the time required to establish or change a contract. To reduce contract cycle time, the company needed full visibility into contracting processes and cycle time components. However, that wasn’t possible with its poorly integrated point solution ERPs, contract content systems, and homegrown systems. Additionally, to comply with continuously shifting global and local policies, the procurement organization was forced to manually update already complex business processes, which created new systems in the process. These repeated inefficiencies took a toll on productivity, increased costs, and had a negative effect on contract cycle time.
How Square BPM helped
Delivered contract cycle management in 14 weeks.
Square BPM provided a Contract Lifecycle Management Solution to orchestrate the process of creating, reviewing, approving, and processing contract requests. Dashboards were configured to give users a high-level view of their organization’s workload, pending deadlines, and user productivity. Within the company, IT created standard reports for the various roles in the organization. Users were given the ability to create their own reports on the fly. The initial solution was delivered in 14 weeks. Pega’s user interface capabilities delivered a consistent, intuitive look and feel, ensuring successful adoption of the solution.
Approximately 3,500 procurement professionals globally now use the Pega platform to manage the contract lifecycle. Pega’s business process management and case management capabilities allowed the procurement organization to easily define, configure, and maintain complex business processes and rules, which supports full compliance with both global and local policies. Pega’s reporting capabilities provided the procurement organization with a vital view into its own processes. Service level agreements were established, reported, and improved as a result of timely and reliable data reporting.
Outcome
Time savings of 12,000 hours annually.
The leading oil & gas company now has full visibility into procurement processes and has begun identifying additional process improvements to reduce contract cycle times. Eliminating manual processes is expected to save 12,000 hours annually, time which can be redirected to higher value activities such as contract negotiations (potentially adding up to $2 million annually). In addition, two major homegrown systems will be decommissioned and additional homegrown systems will be avoided, resulting in an additional annual savings of approximately $1.25 million. Future changes to processes and business rules can be made directly by the procurement organization, ensuring full compliance with global and local policies. The system leverages business process flows and rules to automate the programming, so many changes are now made rapidly and directly by procurement professionals, reducing the need for IT involvement.
One of the world’s largest integrated oil companies, this oil & gas supermajor is engaged in every aspect of the oil, natural gas, and geothermal energy industries. The company’s expertise includes hydrocarbon exploration and production, refining, marketing and transport, chemicals manufacturing and sales, and power generation.