How Schneider Electric transformed its Global Procurement Capability Centre

Every company needs to change with the times, but how do you change when you’re one of the world’s biggest energy companies? One way is to hire someone with fresh eyes, and that’s the route Schneider Electric chose when it hired Srinivasan Ramakrishnan to be Vice President & Global Head – Global Procurement Services in 2023.

First, a word on Schneider Electric. Its roots date back to the 19th century, when two brothers – Adolphe and Joseph-Eugene Schneider – bought mines and forges in Le Creusot, France. That was in 1836, and in 1891 the company began its first transformation when it saw the opportunity in the early glow of the electricity market.

Now, Schneider Electric is a global company that operates in over 100 countries. From mining and those first sparks of electricity, it has become the go-to company for its expertise in energy management, automation and connected technologies. And it puts sustainability at the heart of its operations, which is one of the many factors that Srinivasan must consider in his role as VP of Global Procurement Services.

So now let’s dial back to early 2023 when Srinivasan joined the company. One of his chief tasks was to embrace digital transformation within the company, and particularly within Schneider Electric’s Global Procurement Capability Centre. In this exclusive interview, he explains how it has partnered with UiPath, the business automation platform, to bring AI and automation services to the fore.

First of all, please can you explain what Schneider Electric’s Global Procurement Capability Centre does?

It really represents the culmination of decades of transformation in the procurement function within Schneider Electric. The role of the buyer has significantly changed from managing the end-to-end sourcing process to focusing more on developing the supply base, moving the spending concentration to more strategic suppliers, sustainability, and towards increased use of green materials in our products, etc. 

This led to the birth of our Global Procurement Capability Centre to manage all operational and tactical related activities including, but not limited to, PO processing, vendor onboarding, purchase info records, RFx management, tactical/tail buying, tail spend consolidation, supplier onboarding and qualification support, and associated activities. All of this has freed up energy for our category teams, regions and business procurement arms to deliver significant impact elsewhere.

You joined Schneider Electric in February 2023, so did you quickly identify this as a transformation that needed to happen or was it a project already in progress?

After I joined, we were quick to realise there was a need for structural change. Our approach and vision were then clearly laid out to move from a typical cost centre model to one based on value drivers. This further led to a key structural change, which we refer to as our Twin Engine Approach. As part of this Twin Engine model, we restructured ourselves into two core service towers called Procure-to-Pay (P2P) and Source-to-Contract (S2C), supported by our transversal function and Capability Centres. The Twin Engine Approach focuses on efficiency (P2P) and value generation (S2C) to drive further simplification and synergies.

From this structural shift, we have introduced a first-of-its-kind Tactical Sourcing Buy Desk for direct purchases, focusing on the head, middle and tail of the spend, using AI to gather pricing intelligence, and performance analytics, and to better select suitable suppliers including across the B2B marketplace.

We talk a lot about digital transformation as a whole, but its meaning is hazy. Before this project/partnership started, was there anything in particular that you were looking to digitally transform?

Very rightly, digital transformation is the buzzword across various enterprises. My perspective of digital transformation in procurement is that it delivers enhanced speed, control, and efficiency across all source-to-pay activities as well as streamlined, lower-cost operations and superior performance, and reduction or elimination of routine tasks from work streams.

More generally, before the work with UiPath, what did the Procurement Capability Centre struggle with?

As mentioned, it was more about how we could streamline our processes with a lower cost of operations and superior performance. Rather than us reacting to a challenge or struggle, the move to UiPath was manually driven, with it being more around how we can bring in the much-needed technology intervention so we can free up the energy of our employees and focus on upskilling and tackling the challenges of the future.

Let’s talk about timelines. How long ago did you/Schneider Electric start talking to UiPath? What was it that attracted them to you? Or vice versa?

We began our journey in 2021 from a procurement standpoint. Among the myriad of automation vendors, Schneider Electric was looking for a tailored automation strategy that could be developed collaboratively.

I have had experience with various platforms, but a few things stood out about UiPath:

1. UiPath has this concept of the citizen developers. This helped my team and I to quickly get an idea and evolve within that process.
2. The collaborative approach of UiPath was a particular highlight during the implementation phase. I recall an instance where UiPath’s team dedicated significant time to understanding Schneider’s specific needs so it could better understand us and where it could have better visibility. UiPath took an interest in really understanding us.

Was it a typical project in terms of “here are our end goals, here’s the budget, here’s the time span – let’s go” or was it more fluid and adaptive as you went on?

Excellent question – there was no specific budget, but the focus was more on how we achieve our end goal. This goal was very simple – ensuring processes we wanted to be automated, are automated.

As such, we had to put everything onto the table and pick and choose which makes sense to automate from an effort-invested vs time-saved perspective. This helped dissect the potential problems we may encounter. With the help of our partners at UiPath, we worked on the nuances, carefully manoeuvred and, with the right governance in place, were able to address and predict all the potential challenges, putting us ahead of the game!

When did you know for sure that you had made the right decision to partner with UiPath?

Witnessing the positive impact of automation on our procurement services is how we know it was the right decision to partner with UiPath. For example, our teams began proposing solutions to enhance their work experience. Following a successful pilot, we have automated ten business-critical processes using 26 automations over the course of two years. For 2024 we would want to double this with an additional 40 more ideas in the pipeline for future automation. This is where UiPath has come in. Its advanced features empower us to extend our automation capabilities and focus on innovation, without being hindered by software limitations.

As the benefits of automation become increasingly evident across our Capability Centres, our focus has turned to establishing an effective automation journey that enables scalable deployment across all our Centres, driving substantial and enduring business transformation. To achieve this, we initiated work directly with UiPath to impact our transformation through two evolutionary paths: ‘Do it More’ and ‘Do it Better’.

Related: A greener supply chain is possible, but it will take innovation and cooperation

In practical terms, what has changed? What are the key benefits you’ve seen?

There are two key paradigm shifts which we see within our teams. They have an innovation mindset and a customer-driven approach.

To further elaborate on this, for me, the key word is ‘impact’. In this respect, our focus has been on developing five core capabilities: agility, innovation, customer centricity, efficiency, and digital transformation. These capabilities are intangible assets and are the outcome of investments in talent and workforce development.

We have also invested in the development of our people by having a structured plan to assess and close the critical skill gaps through education, experience, and exposure. We use a growth mindset to coach and give feedback on performance, development, and career paths. This helps to create opportunities and an environment for people to learn and grow.

We aim to upskill our people on critical skills like Lean Six Sigma, project management, digital technologies, and functional expertise, to drive results with efficiency and innovation. We have curated programmes to develop high-potential talent through exposure to cross-functional, cross-regional projects, mentoring and other talent development initiatives. As a result of this, we’ve nurtured trust and made people believe in their abilities to form a culture of high performance and significant impact.

What has the response been within the Global Procurement team? Did it take a lot to persuade them that AI could help? And if so, how did you win them around?

Luckily for me, one of the key mantras of Schneider Electric is ‘digital transformation’ and therefore we did not face any challenges to embracing technology. That being said, we did need to equip our people with the best technologies possible for them to thrive. For example, our supply chain transformation has recently revolved around aligning all processes and data on one platform, automating key processes, and using AI and machine learning to help filter and analyse the massive amounts of data we have to deal with. All with a view to better identify, predict, and prevent problems.

In procurement, you need to constantly evolve how you develop your supply base and this calls for more robust digital intervention across the digital ecosystem to ensure a single version of truth. Not only does this ensure customer reliability and employee satisfaction but it aids areas of compliance, ethics, and sustainability as well. Within procurement specifically, we will continue to focus on guiding processes through enterprise automation, AI and ML, and greater analytics engines to give our people the best chance possible of dealing with relevant, timely, customer-serving information.

Let’s go to brass tacks: how will it save you money?

You are right – at the end of the day, it all boils down to money. Having said that, I would like to draw a parallel to a different way of looking at this. While automation brings in much-needed efficiency, we should also look at the overall growth rate of the organisation as well. My philosophy is different, and I would prefer to have my procurement experts cater to the long-term vision of the organisation rather than short-term goals.

This means the time of category teams, regions and business procurement teams freed by automation can be diverted to deliver significant impacts on Schneider Electric’s top and bottom lines. This also includes better anticipating the next wave of disruption by systematically building resilience in the form of ongoing supplier risk management, business continuity planning, extra inventory buffers, and building competencies across the complete procurement landscape.

Finally, let’s talk about sustainability. How important is sustainability to Schneider Electric as a whole?

The foundation of Schneider’s sustainability strategy and Impact Company model is the belief that investing in the transition to a more sustainable future – in energy sobriety, gender equity or low-carbon solutions – is about future-proofing the company. Doing so drives the company’s competitiveness, innovation, and resilience, it secures sustainable growth (any company’s health is deeply interconnected with the health of the environmental and social systems it evolves in), and it encompasses continuous improvement of environmental, social, and ethical dimensions across an organisation’s entire value chain and stakeholders. This holistic approach allows the Group to greatly mitigate risks and brings tangible added value by being more attractive to stakeholders while boosting innovation.

Schneider Electric is an Impact Company investing in and committing to impact principles in the long run​, proving it can generate sustainability for all.​ This is built on two principles:

• Do well to do good and vice versa: business and financial performance enable environmental and social impact. Sustainability is a source of performance and growth.​
• Bring everyone along on the journey: positive impact cannot happen if you’re a lonely leader, but only if you foster a movement of global goals and local efforts to leave no one behind.​

Our purpose is to empower all to make the most of our energy and resources, bridging progress and sustainability for everyone. Climate change, biodiversity loss and rising inequalities are issues that have long-term consequences and cannot be solved with a short-term mindset alone; it requires a combination of a long-term vision and concrete short-term action.

How will this partnership help Schneider Electric achieve its sustainability goals? And those of its clients?

Transformation never stops, and, with digital transformation, we see huge potential to bring our employees an enjoyable experience. We can augment their efficiencies, continuously bring them best-in-class digital experiences, and better support their work-life balance while offering new and exciting career opportunities.

Moreover, we enjoy co-innovating with partners like UiPath so we can both be ready for what the future has in store. We can leverage our open ecosystem and platforms and empower each other to create more value while tackling shared challenges. One of those challenges is, of course, climate change and sustainability and this next frontier also seeks to provide end-to-end sustainability and more efficient solutions. Ultimately, we want to do all of this at scale, to meet not only our digital vision in procurement but the vision of our entire global ecosystem.