TXU Corporation (“TXU”), a Dallas-based energy company hired Apptricity - an enterprise software provider for fulfilling its goals of consolidating procurement practices and improving its supplier relationships management.

1. R
Case Study:
Best Practices in Spend Management (TXU)
TXU corporation Creates Added Business Efficiency, Operational Cost-Savings
and Enhanced Customer Service with Enterprise Apptricity for Energy Solutions

2. Table of Contents
Executive Summary ..................................................................................................... 3
Pinpointing the Problem ............................................................................................. 4
Searching for a Solution .............................................................................................. 5
Reaping the Benefits .................................................................................................... 6
Summary ...................................................................................................................... 7
Challenge: .......................................................................................................... 7
Strategy: ............................................................................................................. 7
Results: ............................................................................................................... 7
Apptricity – TXU Case Study – Best Practices in Spend Management Page: 2

3. Executive Summary
TXU Corporation (“TXU”), a Dallas-based energy company, manages a portfolio of compet-
itive regulated and unregulated energy businesses in North America, primarily in Texas. In
the company’s unregulated business, TXU Energy provides electricity and related services to
more than 2.4 million competitive electricity customers in Texas, more customers than any
other retail electric provider in the region.
In order to accommodate its aggressive growth objectives during the deregulation of en-
ergy sector, TXU moved to a shared services model. TXU sought through a formal diligence
process to engage an enterprise software provider to fulfill its goal of consolidating procure-
ment practices company-wide as well as improving its supplier relationships management.
Leveraging its Advance Framework technology, Apptricity could and subsequently did meet
TXU’s defined objectives and more.
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4. Pinpointing the Problem
Streamlining business processes related to vendor invoicing and employee spend was par-
amount to TXU. The company’s vision for creating cost-saving efficiency in these areas was
similar for both internal and external transactions:
Eliminate the manual, paper-based process for submitting, processing and reconciling pro-
curement transactions through web-based automation.
Enable a unified approach for automating spend transaction for vendors as well as employ-
ees, whether the purchases are product or service oriented.
On the enterprise side of TXU, decentralized credit and non-capital procurement account-
ing functions challenged the energy company’s ability to manage and enforce uniform pro-
cesses and approvals. The extensive paper-based purchase, invoice and approval functions
could take the company up to ten weeks to complete, minimizing TXU’s opportunity to cap-
ture favorable pre-negotiated discounts. Additionally, delayed payments could also damage
supplier relationships. TXU wanted the ability to consolidate multiple business units under
a shared services umbrella and improve visibility and management of corporate spend
throughout the organization. The ideal technology would enable complete automation and
acceleration of their “procure-to-pay” business transaction processes while capturing early
pay discounts and improving supplier relations.
On the workforce management side, TXU knew it could not afford to waste valuable time
of any employee. They wanted to pay their executives to lead their organizations and pay
their sales staff to win new business or their operating personnel to fulfill customer needs –
not to spend cumbersome hours putting together, approving and reconciling procurement
transactions and reports. TXU required the technology solution (internally branded EZ Pay)
to be user friendly necessitating minimal training. While simplifying the process for employ-
ees, the technology would also provide visibility into employee spending throughout the
organization categorically and in aggregate to locate opportunities to negotiate additional
corporate discounts for volume spending.
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5. Searching for a Solution
TXU conducted a thorough due diligence process as the utility looked for a solution with the
scalability, flexibility and interface capabilities essential to replace its then-current systems
and accelerate its business. After engaging in a comprehensive request for proposal (“RFP”)
process, TXU selected Apptricity’s highly adaptable solutions for their flexibility and cost-ef-
fective scalability.
Apptricity promised dynamic adaptability within an integrated solution that could be easily
customized to TXU’s best practices for decentralized procurement with centralized payment
and rapid integration to existing financial systems. TXU implemented Invoice Management,
Purchase Card Management, Expense Management, Boots Compliance Management within
the Enterprise Apptricity for Utilities & Energy solution offerings* to drive transactions exter-
nally with suppliers and internally with employees. TXU’s implementation included the de-
velopment of several industry-specific custom compliance applications, leveraging Apptricity
Advanced Framework, to further enhance its internal control and compliance management
processes.
“In addition to interfacing with existing legacy systems, Apptricity’s advanced service-ori-
ented architecture allowed our business to replace several homegrown applications with a
web-services based solution,” said, Steve Speer, Project Manager, TXU. “The additional func-
tionality provided a common front-end user interface as well as back-end integration into
our financial systems.”
The Apptricity integrated enterprise solution was customized to replicate business functions,
as well as automate cumbersome business processes. Not only did the integrated solution
need to be able to scale to 16,000 users and require minimal training, it also needed to ac-
commodate TXU’s business or shared services operating environment. As a shared services
solution, Apptricity’s suite of applications had to have common security, workflow, compli-
ance and audit management functionality and provide consolidated reporting for various
business units.
Upon implementation, users obtained the ability to enter multiple types of procurement
invoices including materials, service, education, union compliance, purchase card, expense
and others, and route them to the accounting department for distribution coding and ap-
proval. Workflow automatically advances approved invoices directly to the accounts payable
system for disbursement.
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6. Reaping the Benefits
Leveraging Apptricity’s solution, TXU efficiently processed approximately $1 billion non-cap-
ital procurement transactions in the first year alone after implementation. The implemen-
tation of Enterprise Apptricity for Utilities & Energy applications also resulted in process
improvements such as improved process compliance, faster procure-to-pay turnaround and
maximized use of personnel time -- including Accounts Payable for external and internal
procurement and expense management transactions. TXU could accelerate as desired its
payment of vendors to the capture of early pay discounts and increase field level produc-
tivity. The Apptricity solution allows TXU to streamline the invoice submission and approval
processes, take advantage of early pay discounts and reduce the costs associated with pro-
cessing non-capitalized invoices.
Additionally, TXU now has a solution that facilitates Sarbanes-Oxley compliance, where all
approvals are captured with electronic signature and the company maintains a uniform pro-
cess compliance procedure for all non-capital spend transactions.
“It’s essential that we maintain positive supplier relationships and the Apptricity solutions
have enabled us to not only communicate better with our suppliers, but leverage cost sav-
ings from process improvements in our interactions,” said Speer. “Internally, the savings
we’ve gaining from automating invoice and expense transactions handling are immeasur-
able. How do you quantify the lost time from paid employees across the company with vari-
ous salaries spending hours on transaction creation, submission and approval that can now
be applied to generating sales and managing the company? The system has definitely paid
for itself and delivered significant ROI.”
Subsequent to changes in senior management during early 2004, TXU began rationalizing its
international asset base to focus on its core competencies, which included forming an ener-
gy-focused information technology company with Parisbased Capgemini to create Capgem-
ini Energy LP. This new corporate entity was formed to improve customer service and dra-
matically reduce TXU and other companies’ annual information technology operation costs.
* Enterprise Apptricity for Utilities & Energy reflects Apptricity’s current industry solution branding and en-
compasses a broad selection of enterprise applications for asset management, workforce management and
spend management. When TXU purchased Apptricity’s Invoice Management, Purchase Card Management,
Expense Management, Boots Compliance Management and several custom-built applications, they were
applications within Apptricity’s Spend Management suite.
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7. Summary
Challenge: In order to retain its edge in an increasingly competitive marketplace within the
Energy Industry, TXU wanted to increase its operational efficiency within Accounts Payable,
enhance its customer service operations and dramatically reduce the company’s annual
information technology operation costs.
Strategy: With an increased corporate focus on process improvement, the company invest-
ed in Enterprise Apptricity for Energy, known as Spend Management at the time of purchase,
from Apptricity Corporation for its highly adaptable procurement business value. Specific
Solutions: Invoice Management, Purchase Card Management, Expense Management, Boots
Compliance Management and several additional customized applications.
Results: Leveraging Apptricity’s integrated solution, TXU can efficiently process over $1
billion annually in non-capital procurement transactions and has improved its business
processes including process compliance, procure-to-pay turnaround and Sarbanes-Oxley
compliance.
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