When Schneider Electric wanted to transform its procurement processes with digital tools and automation, digging into the detail needed a collaborative approach. Srini Ramakrishnan shares how far they've come with UiPath, and why the journey isn't over yet.
In the fast-evolving landscape of procurement, digital transformation is no longer a buzzword but an imperative. Schneider Electric's Global Procurement Capability Center (GPCC) is all about modernizing and streamlining the company's procurement operations. Located in Budapest, it acts as the nerve center for Schneider Electric's extensive supply chain, which stretches across 25 countries and supports 74 manufacturing plants in Europe.
The GPCC's main goal is to make procurement more efficient and sustainable. By centralizing these functions, Schneider Electric can improve how it manages suppliers, cuts costs, and meets its ambitious sustainability targets, such as achieving net-zero carbon emissions by 2025 for operations and by 2050 for the entire supply chain.
With over 26 years in the procurement field, Srinivasan Ramakrishnan, VP and Global Head of Procurement Services at Schneider Electric, has navigated the transition from traditional methods to digital solutions. His career, including roles at ABB, Credit Suisse, has seen regular cycles of change, from the early days of sending out RFPs and Excel spreadsheets to using intelligent automation tools and processes.
Ramakrishnan was brought into Schneider Electric to reimagine how global procurement operations were organized, and to enhance the value delivered by the procurement team while maintaining operational efficiency. This strategic vision was encapsulated in three core pillars - simplification, synergy, and scale.
Procurement processes can be excessively complex, so simplification was an obvious strategy for reducing these complications, he explains:
You need to simplify yourself because if you keep yourself extremely complex, you cannot scale it up.
Simplifying processes not only enhances efficiency but also lays a solid foundation for further digital interventions.
Creating synergy within procurement involved fostering closer collaboration with internal stakeholders. This collaboration was not just about internal alignment but also about using technology to address pain points effectively.
Once simplification and synergy were achieved, the focus shifted to scaling operations. This approach enabled Schneider Electric to harness technology effectively and drive significant efficiencies across the procurement function.
Finding the right fit
Among the myriad automation vendors, Schneider Electric was looking for a tailored automation strategy that could be developed collaboratively. Ramakrishnan had experience with various platforms, including Blue Prism and Automation Anywhere, but a few things stood out, he recalls:
What I really learned was, you have this concept of the citizen developers within UiPath, which helped me and my team to quickly get an idea and evolve within that process.
The collaborative approach of UiPath was a particular highlight during the implementation phase. Ramakrishnan recounts an instance where UiPath’s team dedicated significant time to understanding Schneider’s specific needs.
We spent like six hours going line item by line item to see what those potentials were, because sometimes internally we would know what was better for us, where UiPath may not have had that visibility. But they took that interest to really understand it.
One of the first strategic moves was to restructure the procurement organization into two main engines - Purchase to Pay (P2P) and Source to Contract (S2C). This division allowed for focused improvements, explained Ramakrishnan:
The P2P engine was more focusing on speed or agility. The S2C engine was more focusing on value.
With this structure in place, Schneider Electric could systematically identify and automate critical processes. Initial efforts led to automating around 10 business-critical processes, which soon expanded to include 40 more ideas in the pipeline, spanning both RPA and generative AI.
Embracing change and measuring results
Successful digital transformation hinges not just on technology but also on effective change management. Schneider Electric adopted a balanced approach, combining top-down strategic directives with bottom-up engagement and feedback. Ramakrishnan cites the importance of this dual approach:
You calibrate within your leadership team, and then it goes like a bottom-up approach. You agree on what needs to be done as a strategy and then you implement it.
Education and upskilling were central to this strategy. The Schneider Electric Procurement Academy played an important role in certifying employees and preparing them for the new digital landscape. Ramakrishnan emphasizes the need for professionals to have a mindset of continuous learning, blending technical awareness with traditional procurement skills. This is different to how things were when he first joined the company, he observes:
Everybody was doing everything. It was like a jack of all trades and master of none. So, for example, if I'm an individual, I will do vendor onboarding in the morning process, and I will get into an RFP process in the afternoon, followed by some other processes after that.
The transformation at Schneider Electric has yielded substantial measurable benefits. In 2021, the introduction of automation saved approximately 1,200 hours, equating to 1.2 headcounts, and processed 42,000 transactions. By 2022, these figures had dramatically increased, saving around 10,000 hours (7.5 headcounts) and processing 400,000 transactions with eight bots.
The momentum continued into 2023, with 20,000 hours saved (equivalent to 12.5 headcounts) and 900,000 transactions processed with 16 bots. Ramakrishnan set an ambitious goal for 2024 - to double these metrics, leveraging both RPA and Generative AI.
Lessons learned
A key lesson from Schneider Electric’s journey is the importance of standardization before automation. Ramakrishnan cautions against viewing automation as a mere “band-aid” solution, stating:
Don’t do that, because the patch will fail over a period of time. Maybe it works this year. Tomorrow, there is a change in the policy, this patch is gone. You need to change this whole model again. That’s not going to work.
Looking ahead, Schneider Electric’s future plans include integrating generative AI for decision-making, and developing contract intelligence to ensure compliance and value, making it more strategic and impactful. As Ramakrishnan succinctly puts it,
This is just the beginning. We need to buckle up, upscale ourselves, and stay relevant to the current challenges.
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