Genting Malaysia Berhad realises procurement savings with ‘systems-thinking’ strategy, powered by cloud-based SAP Ariba suite

Moderated by SAP general manager (customer engagement & experience, intelligent spend and business network) Chon Raman (left in pic), the session also included SAP regional vice president and FSI & services industries head Bambang Moerwanto (right in pic) and PwC South East Asia procurement consulting director David Hodge (second right in pic)

For leading integrated resort operator Genting Malaysia Berhad (GENM), the recent year-long implementation of SAP Ariba on the cloud, which was completed in May 2021, was part of the procurement division’s digital transformation programme. The transformation was driven by the need to remove redundancies and inefficiencies caused by multiple systems, processes, and policies.

Being the visionary group that it is, GENM embarked on a strategic ‘systems-thinking’ approach to look at cross-functional relationships within and beyond the four walls of the group. This is based on the premise that procurement and supply chain practitioners can lead the way in developing new business models, embracing innovative technologies, and increasing employee engagement through a systems-thinking approach.

Darrel Lim (second left in main pic), Assistant Vice President of Procurement, Genting Malaysia Berhad said that, with SAP Ariba, GENM is now able to “upskill our employees within the supply chain to provide value-added services.”

“Our business strategy was based on our digital transformation initiative to digitise the manual work that we were doing, before turning to a system to do the work for us instead.”

He said this during a panel discussion at the SAP SAPPHIRENOW event called ‘Fit for the Future: Procurement's Digital Evolution’.

WATCH: Discover how you can take data-driven action to transform procurement processes and continuously improve the spend experience, deliver resiliency, accelerate savings, and innovate with speed.

While the digital transformation was already in the pipeline, Darrel was assigned to lead the implementation of the Ariba project within a fortnight of him joining GENM. “I received consistent input from our stakeholders whereby they would like to see more value-added services, as well as participation from our procurement team, along with any possible reduction in turnaround time to complete our entire procurement process.”

“Of course, this included warehousing, receiving, material requirements planning, and finance.”

At the time, Darrel also discussed with his team the challenges they faced with their existing systems. The team then noted the ‘handshakes’ of various processes, before concluding that manual preparation of documents and approvals were slowing down productivity.

“Things like tender write-ups meant circulations to obtain approvals, report preparation and preparing data to export it into another module of another system so that the workflow continues,” recalled Darrel. “Since some of our Ariba on premise modules were not integrated or talking to each other, my team had to spend so much time overseeing these manual activities.”

Find out how you can leverage SAP Ariba Sourcing to drive fast, sustainable results with automated and streamlined critical tasks across your entire sourcing lifecycle

As an existing SAP customer, GENM made the decision to move from its current on-premise solution to the cloud-based SAP Ariba suite. The suite comprises SAP Ariba Sourcing, SAP Ariba Supplier Info, Performance Management, SAP Signature Management by DocuSign, SAP Ariba Contract Management, and SAP Ariba Commerce Automation.

Enormous benefits with the SAP cloud based Ariba suite

The benefits were enormous: The SAP cloud based Ariba suite helped to resolve IT audit issues, retire other satellite solutions to a single platform, and provided GENM with transparent processes to manage all types, sizes, and volumes of procurements.

Aside from financial cost savings, Darrel also highlighted a significant improvement in the approval process time for tender write-ups.

“Our headquarters, where 80% of our team works, is based in Kuala Lumpur while majority of our end-users reside in different states. In order for us to get sign offs, it would require a number of couriers for the physical document which takes up a lot of time.”

Because of this, Darrel’s team was averaging close to 36 days to get all the necessary approvals.

With the SAP cloud based Ariba suite, the time taken for the approval process was reduced by 80%.

“By relying on the system to manage that activity for us, and using e-signatures, we are now able to record a seven-day average turnaround time to get all the necessary approvals,” he said.

Other benefits included prevention of loss of documents and full-time equivalent employee (FTE) savings for his team to manage and follow-up on approvals. With all the FTE time savings realised, Darrel’s team was able to reassign five of his team members into new sections to assume ‘higher value’ and more strategic roles for the company.

“We set up a Vendor Management team comprising of 3 FTEs and their new roles are to improve our vendor engagement activities and identify potential business partners that can assist in positioning our business ahead of our competitors.”

“We also set up a Strategic Sourcing Team comprising of 2 FTEs who are assistant managers and they are tasked to focus on our critical contract engagements, bringing in greater value be it in a technical or commercial perspective.”

Meanwhile, SAP Malaysia managing director Hong Kok Cheong cites GENM as an example of its over 16,000 customers and partners worldwide that use the SAP Cloud Platform to build application extensions and seamlessly integrate landscapes.

At SAPPHIRE NOW, the company had announced the SAP Business Network, an innovative new solution that reimagines how businesses collaborate with their network of trading partners and will empower companies to unify all the points of interaction and integration across that network to move faster and smarter than ever before.

“A unified network based on a ‘cloud-first’ strategy enables all trading partners to leverage combined intelligence to apply learning from past experiences to future decisions, ultimately driving success across the board,” said Hong.

“Because when a network reaches across functions, across industries, across the world, companies have the power to reshape how business gets done, including collaborating to solve some of today’s biggest social, economic, and environmental issues,” concluded Hong.

Source: SAP Malaysia

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