21 June 2001 | David Arminas
Mobile telecommunications company Orange has embarked on a major five-year e-procurement plan to save 13 per cent on its UK division's spend.
"It's a long-term plan and, by 2006, we hope to save £45 million from our annual £2 billion budget," Tina Fegent, head of UK commercial procurement, told SM. "Our immediate goal is to save £5 million in the first year, but e-procurement is not a driver on its own. It's about empowering purchasers to do strategic category management jobs with the best toolkit."
Last year, Orange designed and implemented an internal SAP-based online requisition system called Buy. "It uses free text and has no catalogues," said Fegent. "It is very basic and allows staff to top up requisitions. The move to a more sophisticated system, to eventually include auctions and tendering is about giving the purchasing team more power to be strategic with the information collected."
Orange, which employs about 14,000 people in the UK with a purchasing staff of 55, is working with consultancy PMMS on the design and implementation of systems. Pilot schemes are expected to start early next year.
"A well implemented e-procurement strategy can expect to deliver savings of around 15 per cent," said Karen Watson, a PMMS senior consultant. "We think that Orange has already achieved savings of 2 per cent, so we believe that there is another 13 per cent up for grabs."