Kenya Power deploys SAP solution to enhance procurement processes

Kenya Power currently spends most of its procurement budget on foreign sourced supplies, but now aims to support local industry by promoting local suppliers of key materials. The system is thus set up in accordance with government guidelines that 40 percent of the budgets of all state corporations and ministries must be used for local sourcing.

“Kenya Power is very proud of what it has accomplished,” said Samuel Ndirangu, General Manager of ICT at Kenya Power. “But, this is only the beginning. The energy landscape is changing and we need to be able to adapt and change if we expect to reach the goal of connecting all of our citizens.”

The challenge for access to electricity in Africa is arguably no more acute than in Kenya. A rising giant on the African continent, Kenya has never had it easy and is faced with staggering shortfalls in terms of supplying power to its people.

By 2005, only 15% of the country’s estimated 40 million citizens had access to power. Today, that picture has changed with approximately 40% of people enjoying access to this basic service. This has resulted from intensified initiatives to connect more people to electricity in the last ten years.

The SAP system will allow Kenya Power to better manage suppliers through a vast improvement of the company’s inventory management, which will reduce the stock level Kenya Power has to carry on an ongoing basis.

In addition, the solution will enable an online and more transparent method of working with suppliers via a Supplier Relationship Management platform.

The result is that Kenya Power will be able to evaluate the performance of its suppliers, allow them to respond faster to suppliers, and also enable suppliers perform self-service for invoices and purchase orders.

Additionally, the SAP system has been set up to support a Kenyan government rule, which stipulates that each entity must set aside 30 percent of procurement supplies for disadvantaged groups comprising women, youth and people with disabilities

After deployment of the system, Kenya Power is now able to leverage underlying Enterprise Resource Planning data for faster reconciliation, manage budgets as they are being utilized, and check how far the budget utilization is in relation to the overall plan.

With SAP’s treasury and operations engine, the firm is able to manage its growth and gain better visibility of the financial supply chain. The new general ledger will help Kenya Power do more in financial reporting, thus better managing different parts of the business.

Big data analytics will help Kenya Power project future uptake of electricity, thus advising policy in term of how much power the country will need to invest in and when the investment needs to be done.