Accenture Helps FirstEnergy Identify More Than $450 Million in Cost Savings Over Three Years
Accenture Strategy engagement helps drive enhanced competitiveness
Accenture (NYSE:ACN) has helped FirstEnergy (NYSE: FE), a leading U.S.
diversified energy company, develop its Cash Flow Improvement Program
(CFIP) that is expected to help deliver $453 million in cost savings
over the next three years.
The project, currently being implemented, was launched in April 2015 to
capture both immediate and long-term savings to help drive
competitiveness and improve the agility of operations. With the support
of Accenture Strategy, FirstEnergy conducted a 12-week analysis of
savings and operational improvements that focused on cost savings in
supply chain, finance, customer care, transmission and distribution and
power generation.
The CFIP program is an enterprise-wide effort to help improve cash flow
through reduced expenses in both company operations and the generating
fleet, with a particular focus on sub-critical fossil-fuel power plants
and lower fossil fuel and fuel-related commodity expenses. Employee
attrition across the company and a more selective hiring program also
are helping drive cost savings.
The project identified more than 100 cost-reduction opportunities, with
about 65 percent of the savings expected from lower operating expenses
and 35 percent from lower capital expenditure and nuclear fuel
expenditure improvements over a three-year period.
“Accenture is a key team member with FirstEnergy, and its recent work on
our Cash Flow Improvement Process has been critical to the success of
this project,” said Chuck Jones, president and CEO of FirstEnergy. “I
set a very demanding schedule and financial targets, and the project
exceeded the targets and was delivered on time.”
“Our support of FirstEnergy’s leadership team is helping the company
overcome the impact of lower prices for natural gas and electricity,”
said Jack Azagury, senior managing director for Accenture North American
utilities practice. “FirstEnergy dedicated an outstanding and very
senior team to this effort, which allowed our combined team to have a
material impact on the company’s financials and competitiveness within a
short period of time.”
About Accenture
Accenture is a leading global professional services company, providing a
broad range of services and solutions in strategy, consulting, digital,
technology and operations. Combining unmatched experience and
specialized skills across more than 40 industries and all business
functions – underpinned by the world’s largest delivery network –
Accenture works at the intersection of business and technology to help
clients improve their performance and create sustainable value for their
stakeholders. With approximately 373,000 people serving clients in more
than 120 countries, Accenture drives innovation to improve the way the
world works and lives. Visit us at www.accenture.com.
Accenture Strategy operates at the intersection of business and
technology. We bring together our capabilities in business, technology,
operations and function strategy to help our clients envision and
execute industry-specific strategies that support enterprise wide
transformation. Our focus on issues related to digital disruption,
competitiveness, global operating models, talent and leadership help
drive both efficiencies and growth. For more information, follow
@AccentureStrat or visit www.accenture.com/strategy.
About FirstEnergy
FirstEnergy Corp. is a diversified energy company dedicated to safety,
reliability and operational excellence. Its 10 electric distribution
companies form one of the nation's largest investor-owned electric
systems, serving customers in Ohio, Pennsylvania, New Jersey, West
Virginia, Maryland and New York. Its generation subsidiaries currently
control nearly 18,000 megawatts of capacity from a diversified mix of
scrubbed coal, non-emitting nuclear, natural gas, hydro and other
renewables. Its home page is www.firstenergycorp.com.
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