Euro Utility Targets Spend Analysis

RWE Systems aims to improve master database as first step toward supply base aggregation, cost reductions

Philadelphia  January 30, 2003  European utility company RWE has tapped ICG Commerce to help reduce its procurement costs by improving the company's capacity to analyze its expenditures through improvements in its master database.

RWE, one of Europe's largest industrial multi-utility companies, with annual net sales exceeding $32 billion, has recently experienced significant growth through a number of acquisitions. The company is now looking to capitalize on its increased size and reduce costs by standardizing the products and services that it purchases to run its business.

The company is counting on this initiative to help it to achieve greater visibility into stock keeping units, reduce inventory and enhance the company's ability to aggregate its total buying power across its more than 500 energy and industrial interests for optimal supplier pricing and service.

ICG Commerce experts will work with RWE Systems  the corporate services organization within the RWE group that manages the procurement and materials management for most of the RWE companies  to analyze companywide expenditure information. The data gathered will subsequently be used to identify opportunities to reduce their number of suppliers, aggregate purchasing volume and standardize purchases for optimal supplier pricing and service.

"In ICG Commerce we found a strong and very experienced partner for solving our specific needs in optimizing the master data structure within the ERP-system of the RWE group," said Dr. Thomas Holzapfel, RWE systems manager responsible for master data management.

RWE will leverage ICG Commerce's proprietary technology and experts to capture and categorize massive amounts of purchasing data generated by multiple RWE data systems. The ICG Commerce category experts, supported by customized applications, will turn the data into a format that is more user-friendly, providing RWE a clearer picture of their spend and the ability to make more informed sourcing decisions.

"With the significant growth that the RWE group has experienced recently, they are a perfect example of how large companies can become more cost efficient through a better understanding of their expenditures," said Ed West, chairman and CEO for ICG Commerce.

Services to RWE will be performed by ICG Commerce's operations in Frankfurt, Germany.