BAA has been embracing the new electronic era with enthusiasm. Matthew Riley, director of e-business, has taken the client head first into the world of electronic procurement with promises of multi-million pound annual savings across BAA's annual £1.2bn construction spend.
The new high tech procurement system up and running across BAA now sees every purchase made online.
'We now have seven airports in the UK operating as a group, ' explains Riley. 'Everything from business cards to construction services is now bought online. We have seen our cost per transaction fall from £90 to £20.'
And with over 100,000 transactions a year there is substantial potential for cost savings. There are now only four ways for BAA staff to buy goods and services. Some 85% of items are now bought via an online catalogue with noncatalogue items handled through a separate electronic credit card authorisation process. There is also a separate route for small one off items and another for larger single items like construction services.
'The next stage is to improve the process down the supply chain, ' says Riley, explaining that often, for example, online purchase simply results in a fax being sent to a supplier.
Hence BAA's enthusiasm for Asite. With construction the company's top single expenditure, it is the logical progression of its e-procurement strategy and Riley sees big advantages and savings on the horizon once this new marketplace is created.
BAA expects to spend serious amounts of money over the next 10 years. Even without Heathrow Terminal 5 it is likely that £6.5bn will be invested.
BAA can clearly see that there is a potentially huge saving to make and is keen to ensure that it is delivered.
'Asite should enable BAA to see further down the supply chain, ' he says, although accepting that it will be a while before any real savings are seen. 'We are investing now to safeguard our future needs. We are not really expecting any bottom line benefits within the next two years.'