RHB Banking Group in Malaysia  has a long and proud history, starting as Kwong Yik Bank in 1913 and then merging with D&C Bank in 1997 (to become RHB Bank). In 1999, it merged with Sime Bank  to form the RHB Banking Group and in 2003 absorbed Bank Utama. To initiate cost savings, synergise and standardize processes throughout the group, a Request for Proposal was issued in mid-2008 with the following as one of the objectives:

 “RHB Group intends to implement the e-Procurement system as part of our commitment to improve our service to our internal as well as external customers. It is one of the cost saving initiatives undertaken to improve on workflow efficiency, SLA tracking and response time for items requested and purchased via Central Admin”

About RHB Banking Group:

The RHB Banking Group has four broad categories of businesses – Retail Banking, Islamic Banking, Corporate and Investment Banking and International Banking. RHB Bank Bhd and RHB Investment Bank Bhd  are wholly owned by RHB Capital while RHB ISLAMIC Bank Bhd is wholly owned by RHB Bank. The asset management and unit trust businesses are held under RHB Investment Management Sdn Bhd, a wholly owned subsidiary of RHB Investment Bank.

The RHB Banking Group is the fourth largest fully integrated financial products and services group in Malaysia. 

The Group has a staff strength of 10,000 and as of 31 December 2009, Total Assets were RM115.0 Billion with Total Shareholders' Funds at  RM8.7 Billion

►  Challenge

As part of its Transformation Program, RHB Banking Group decided to centralise  the Procurement  function across all  entities : RHB Investment Bank, RHB Property, RHB Islamic Bank, RHB Insurance, RHB Hartanah, RHB Kawal, RHB Research, RHB Investment Management,  RHB Capital (the holding company) and RHB Bank itself.

Rather than combining different processes from different divisions, The Group decided to start with a clean sheet and implement Procurement Best Practices across the board. The challenge was to ensure smooth adoption throughout the Group and complete delivery in a compressed timeframe.

►  Solution

RHB successfully implemented an eProcurement Portal incorporating BusinessRelationshipNetwork™ software. After stringent evaluation following their RHB’s Request for Proposal, MyBiz Total Spend Management products (MyProcureNet, MyAuctionNet and MyContractNet) were selected for roll-out in early 2009. 

MyAuctionNet is a sophisticated eBidding solution designed to deliver high operating efficiency and significant purchase savings while MyProcureNet realises those savings by automating and streamlining the purchasing process to ensure compliance, limit off-contract buying and reduce associated operational overheads. MyContractNet  creates a single repository of contracts, enabling information about projects and performance of vendors to be shared across the entire organization aiding centralisation, collaboration and standardisation of all Contract activity (e.g. contract language, contract authoring and processes for contract approval)  to increase efficiency on an Enterprise Wide basis.

The RHB eProcurement Portal was launched in February 2009, with the first eBid event conducted within 30 days of project mobilisation. By end of the year, the project has successfully gone live nationwide, in more than 600 branches and Head office departments for all Group subsidiaries

This system was integrated with RHB’s existing back-end system and invoices are posted directly into Accounts Payable for electronic payment directly into Suppliers’  accounts  with the bank. MyBiz also customised user interfaces and configured workflows to accommodate corporate policies. With tight integration between the RHB eProcurement Portal and the training and enablement of suppliers, a variety of procurement processes were shortened and made transparent according to corporate constraints and goals.

►  Results

Procure-To-Pay, eBidding and Contract Management was successfully implemented across the entire RHB Group of Companies in less than 11 months. This is a feat no other financial services group in Malaysia has even attempted let alone succeeded.

The experienced project team was able to meet all project go-live dates set by the Project Steering Committee from branch and regional pilots to nation-wide roll-out. Project Delivery was achieved On-time and On-Budget. Most spectacularly, the project generated a return on investment to cover the entire costs of the project within 3 months from project kick-off.

RHB Group companies now share a common electronic procurement system across a common group of Suppliers. This has helped to lower administration and operation costs in addition to leveraging Group spend by aggregating purchase volume for better service and/or better pricing. Suppliers receive Approved Purchase Orders electronically and submit Delivery Orders and Invoices over the Web for automated payment into their bank account. Their business relationship with RHB Group is improved by faster turnaround of documents for faster payment, elimination of manual errors and increased business volume.

RHB Group has utilized MyAuctionNet such that, in less than one year, purchase savings exceeded internal targets by a significant margin and their implementation of MyContractNet has ensured that all Tenancy Contracts for its numerous branches are monitored and effected optimally.

All customer objectives were met within an accelerated timeframe - the holistic and integrated approach to Total Spend Management enabled RHB Central Procurement  to take control of the system and services they require to strategically source, negotiate, contract, procure and pay for their materials and services.

The Head of Procurement, RHB Banking Group opined at the end of the project: “With the MyBiz eProcurement system in place, we are not just paper ‘less’ - we are truly paperless”