uso: riservato aziendale 0 eprocurement strategy case: enel spa ermanno boeris bratislava, february...

Uso: riservato aziendale1

eProcurement strategy

Case: Enel Spa

Ermanno Boeris

Bratislava, February 2007


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


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.)


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


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


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


• 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


“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


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


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


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


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


Thank you for the attention

uso: riservato aziendale 0 eprocurement strategy case: enel spa ermanno boeris bratislava, february...

Documents

mw slide

mw hydroelectric

mw thermal

mw data

mw biomass

riservato aziendale

mw wind slovacchia

mw cogeneration spain