About PETRONAS
CARIGALI:
Petronas LogoPCSB is the operational arm of PETRONAS
(Petroliam Nasional Berhad), Malaysia's national oil company, which has grown
to become a multinational corporation with an increasingly significant global
presence. From being a mere regulator and manager of Malaysia's upstream
sector, it has evolved into a fully integrated petroleum company engaged in a
broad spectrum of oil and gas operations worldwide.
As a state-owned entity, PETRONAS is responsible for the
effective management of Malaysia's oil and gas resources, for adding value to
this national asset, and for ensuring the orderly and sustainable development
of the country's petroleum industry. As a business entity, it must conduct its
operations in the most prudent and commercial manner; and compete in the
increasingly challenging business environment in order to maximize returns to
its stakeholders.
·
Challenge
While PCSB's existing SAP procurement system incorporates
the issuance of ePurchase Orders, the system did not allow users to reconcile
Purchase Orders, Service Notifications (S/N), Goods Received Notes (GRN) and
Invoices online or enable vendors visibility into payment processing, leaving
them in the dark on the timing of receiving payment. Furthermore, the vendors
still had to operate through faxed Purchase Orders and were responsible for
compilation of documents by gathering appropriate forms from the appropriate
PCSB department for approval before submission for payment. This often led to
long delays in finalising bills.
PCSB was seeking a system that would provide optimised
purchasing practices and a seamless integration to its existing back-end
financial system introducing buyer catalogues, profiling and automatic
reconciliation, all of which would save time and effort for PCSB and its
vendors alike.
·
Solution
A Procurement Portal incorporating Covalence ™
BusinessRelationshipNetwork software was implemented This system was integrated
with PCSB's existing SAP system, so information could be passed between systems
with minimal relearning and disruption to existing PCSB SAP users. With tight
integration between SAP and PePP and the training and enablement of vendors, a
variety of purchase scenarios were shortened and made transparent according to
corporate constraints and goals.
·
Results
Standardised and streamlined purchasing practices caused
a reduction in paper work and duplicated records, resulting in improved
transparency on all purchases and control of maverick spend. The time taken for
issuance of Purchase Orders to Suppliers was reduced from an average of 4 weeks
to 48 hours. Supplier
bills were also paid in timely fashion. Invoices which are processed
electronically do not suffer the lead time necessary for manual approval, which
necessitates execution by an approving authority who may be overseas. The
time-savings here are especially apparent with time from issue of invoice to
payment being cut from 82 days to 22 days. More importantly, staff have to
field less enquiries with regard to invoice payment as details are available
online, resulting in improved customer service.
