Telkom – Brochure 2020

Procurement Telkom: Procurement transformation transformation and & communication communication Project Partners

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Telkom: Procurement transformation and communication Ben Van Zyl, Chief Procurement and Contracts Officer, discusses a significant procurement journey for Telkom, and how the internal stakeholder sits at the very heart of it...

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D al e Bent on Hey kel Ouni

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T

he challenge in any procure-

But the reality is that change is neces-

ment transformation is one

sary and procurement has transformed

of enacting true, tangible

significantly.

change. As many organisations seek to

Take Ben Van Zyl for example, Chief

realign their procurement and supply

Procurement and Contracts Officer of

chain functions, to make them more

OpenServe and Telkom. Van Zyl, who

strategic and key drivers of growth, the

has built a 20-year career in strate-

journey that’s required is one defined by

gic sourcing, procurement and supply

constant change and increasing pres-

chain management for leading finan-

sure to deliver. This is in part, thanks

cial and telecommunications organisa-

to often antiquated views that see it as

tions around the world, was tasked with

merely a cost centre and a back-office

lending his expertise to deliver a true

function designed to sign the invoices

procurement transformation for Telkom.

and in some cases, police spending.

One thing that he acknowledges as

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a common concern for procurement

delay them.”

professionals in his position is communi-

“That’s how you create resistance

cating the true value of procurement to

because they have objectives and in

an organisation. “I think when you listen

their performance plan, there isn’t a

to the business, you can really translate

dependency on procurement. Whatever

what their vision and strategy for their

I bring forward has to have a client focus

business is and approach it in a way that

in mind to talk to how we are going to

will enable them to realize that,” he says.

enable them.” Van Zyl beams that he has

“It’s about getting the language right.

been blessed to be in a business made

You do not say that you’re going to come

up of people and a board that under-

in and implement new control because

stands the critical role procurement

honestly, what really scares people is the

plays and welcomes the changes he has

idea that you are here to police a policy

recommended.

and put in new processes that’s going to

Van Zyl had already worked with Open Serve for a number of years but was tasked with a specific goal for Telkom; to “fix” procurement and supply chain issues that had arisen within the business. The bottom line for procurement first and foremost is one that focuses on the bottom line and to streamline and tighten up a number of performance issues around cost reduction. But, as is a common question raised by many procurement professionals, why stop there? Van Zyl very quickly came on board and resolved a number of issues presented by previous failed implementations and misfires or in his own words he “steadied the ship” but even he acknowledges that really, it was only the beginning for procurement. “We were w w w . c p o s t r a t e g y. c o m

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under pressure from a cost perspective,”

very cumbersome supplier onboarding

he says. “I was asked to come in and

process that was in place,” says Van Zyl.

steady the ship but also to try and take

“Alongside this was a focus on identi-

our procurement and supply chain envi-

fying any big opportunities from a cost

ronment to the next level.”

savings perspective and the key deals

Defining that next level was crucial in

that the business required to enable

order to make lasting and meaningful

them with their business objectives and

change for the business going forward

the business strategy and realizing that.

and so the first steps were to look inward

It was a challenge but I think listening to

and engage with stakeholders in order

the stakeholders and sharing with them

to identify the real pain points that the

to say this is where we are, here are the

business had and outline the “building

things that are critical and this is going

blocks” that would enable that change.

to my approach and my timeline - which

Running parallel alongside this initial

they approved - was key to getting things

assessment was a dedicated maturity

started.”

assessment that allowed Van Zyl to paint a clear picture as to the challenges that procurement and supply chain as well as the wider business faced and how the two went hand in hand. This, he notes, allowed the business to expose the gaps and design a plan to achieve key objectives and targets. On top of this there was an audit coupled with the pain points raised by suppliers enabled a prioritizing of required actions moving forward.

“My initial focus was on getting the basic building blocks in place like a center of excellence, operating model, a new procurement governance framework and policy and then at the same time fixing the big pain points like the 8

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One of those building blocks, a center

“ This model also allows for improved knowledge management so that you can create step changes in the skills of the team” — B E N VA N Z Y L , C H I E F P R O C U R E M E N T A N D C O N T R AC T S O F F I C E R

of excellence, was the key to all of this. Successfully establish and implement this at the very heart of this journey and the road ahead will look that little bit easier.

But what is meant by a center of excellence? Well, a core team of procurement experts that play a holistic procurement role within the organization that can drive scale and repeatability and best practice. Van Zyl highlights an example of this in action where the business has multiple ERP systems and processes which this team of experts can take on the responsibility for and advise on the implementation and the use of new technology. “They can also provide knowledge base services across the different procurement processes, platforms and standards designed to drive that scale and focus on delivering that value added performance throughout the procurement organization to enable the growth strategy,” he says.

“This model also allows for improved knowledge management so that you can create step changes in the skills of the team.” This is of particular interest to Van Zyl as there is a notable shortage of sourcing talent and so knowledge management is critical. Talent comes and goes and the people within the business, w w w . c p o s t r a t e g y. c o m

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Deliver the extraordinary

Plan now for 5G, says Nokia Communications service providers must ensure that they have the right foundations, or transport in place to take full advantage of 5G. This is the view of Mark Baptiste, director of the IP and optical business for Africa at Nokia.

“There are so many moving parts at the moment,” he says. “You have your transport or the mechanism to carry your traffic which includes Optic’s, IP and Microwave on the one side, but then we have things like virtualisation, public and private cloud, automation, software-defined networking (SDN) and security that are also fundamental to the network operations. That is why it is not only critical to get the transport right at the outset, but also to build it so that it can deliver today, while also catering for the requirements of the future.”

The CSPs have massive investments that they have made over the past 20 years, and this is not something they can just switch off. Baptiste believes this is where transport becomes so important.

“From a transport perspective, we do not distinguish between the existing and the future. What we are saying is that we must build networks that can operate securely, handle massive scale, and provide seriously high performance,” he says. “The biggest challenge for CSPs is balancing the present while investing in the future. We all know that 2G and 3G will be around in Africa for a long time. For operators in Africa, it is about striking that balance between keeping existing customers happy, while looking at the business case for 5G, because everyone wants to be the first to make it a reality.”

Baptiste says the most important thing for CSPs right now is to get a strategic blueprint in place that determines how they evolve their network from where they are today, to cater for the requirements of 5G and their network evolution. “Here Nokia is strategically positioned to work with CSPs to build this end-to-end architecture where we would look at each of these elements, firstly holistically, and

then we would strip them down in isolation to determine how we build each of these elements to meet their specific requirements. Then we would put it all together again in terms of a blueprint that provides the CSP with the Future X solutions Nokia always talks about.”

Nokia has recently revolutionised data centre networking by launching our new Data Centre switching fabric. Our DC Fabric provides generational steps in data centre networking; new operating system, tools and gives cloud builders unprecedented ability to adapt, automate and scale keeping up with the increasing demands from 5G. “Nokia’s DC Fabric also redefines openness, application development flexibility, robustness and operational tools for rapidly building and confidently operating data centre networks at scale. This puts Nokia in a unique position completing our end-to-end portfolio for 5G,” he says.

Baptiste concludes that CSPs must focus on getting the basics building blocks of their transport platforms right early on. “If you have an under dimensioned transport platform, it does not matter what you build, it will have a serious impact on your ability to deliver at scale on the rapidly evolving requirements of networking. So, the key thing is to build that transport platform that can address security, massive scale, high performance and gives you all the automation and end-to-end requirements that you need. Nokia is proud to be a partner of Telkom in South Africa and, together, we look forward to building next generation transport networks, which are the bedrock for enabling digital services for consumers, enterprises and the public sector in South Africa.”

Mark Baptiste

critical procurement experts, may leave and leave an organisation with key information within the hard drive.

“Then you end up having to redo and relearn the same things that that individual learned when he was there and you have to do everything from scratch,” adds Van Zyl. “Again, what’s critical for us as well in the center of excellence model, is that it helps us with improving our knowledge management along with everything else.”

When discussing procurement transformation, it’s not long before we fall victim to subscribing to the notions of trendy buzzwords that professionals like (and dislike) to hear. Flexibility and agility are two of the biggest and oft used words, but why? What do they mean to a business?

“I’ll be honest. These were not words that’s normally associated with procurement for Telkom,” Van Zyl boldly states. “It used to be an organization with structured and strict procurement processes and gateways, so those words were not normally associated with the whole procurement process environment.”

There is sound reasoning for this. Telkom has a number of unique and different business units within its portfolio. These include but are not limited to: a fixed line business and mobile business, a mast and tower, a property business, a commerce platform business with some financial services and an IT outsource business.

Each unit has its own strategy, size and cost plans. For Van Zyl and procurement, it was vital to acknowledge that one-size-fits-all process was out of the question.

“A standard recognized procurement process with no flexibility that is unable to respond to the individual business unit will become unnecessarily controlling 12

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and restrictive. It would create a direct

ultimately will never be ‘perfect’.

negative impact on the individual busi-

Improvements have been made but this

ness units that would struggle to achieve

is an ever evolving journey and so he

and maintain a competitive advantage

and his team will continue to acknowl-

in the open market,” he says. “We really

edge any emerging gaps in order to be

had to consider that in our development

able to adapt fast.

of the new procurement governance

Procurement is a numbers game. It

framework policy and processes, as well

always has been. The numbers and

as the selection of our digital tools that

indeed the successes count now more

we would like to implement. It allows us

than ever when undergoing significant

to be more flexible and more holistic in

transformation. Van Zyl can already point

our approach to shorten that timeline

to the addressing of the control envi-

for either the contracting process or that

ronment through the design and imple-

transaction.”

mentation of a new procurement policy,

Easier said than done and Van Zyl admits that this is a process that

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governance framework and processes that enables the business to move

faster and provide flexibility. Elsewhere,

of the CFO and in turn the CEO? These

by building a spend queue system it

are, ultimately, the key stakeholders for

allowed for a far greater understanding

procurement. Van Zyl has implemented

of spend and analysis by creating dash-

a supply chain financing platform to free

boards for performance, cashflow views,

up cash flow and reduce working capi-

and savings reports in order to track

tal. A very important focus for the group

real savings. “It sounds like basic stuff,”

CEO and CFO, this changed the payment

says Van Zyl. “But we had some contra-

terms for suppliers from 30 to 90 days,

dicting views on the spend. Depending

the industry standard for telco companies

on whether you look from a supplier

in South Africa. “By implementing the

perspective or contracts perspective

supply chain financing platform it allows

or business perspective you could get

the suppliers and even the small supplier

different numbers so we had to fix that so

to immediately trade their invoice at a

that. Now, there’s only one version of the

low interest rate where they could imme-

truth that can allow you consistency to

diately get the cash injection,” he says.

make the right decision as well as track

“That was also very helpful during this

deliverables.”

COVID period and a great achievement

But what of the successes in the eyes

in terms of our year-end result.”

“ The procurement function is able to develop and create innovative business models and become a valuable strategic business partner” — B E N VA N Z Y L , C H I E F P R O C U R E M E N T A N D C O N T R AC T S O F F I C E R

w w w . c p o s t r a t e g y. c o m

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Success is one thing, but failure is

process we’re engineering may succeed

another and admitting that things haven’t

due to acceptance of the solution, but

gone according to plan is often the place

the human factor too. Dramatic change

where real change is found. Van Zyl

brings tremendous resistance and it

recognizes this as an incredibly impor-

requires ongoing change management

tant part of any journey. “It’s a journey

to ensure that success.”

and there’s always room for improve-

Technology and process digitaliza-

ment,” he says. “It’s critical to contin-

tion play a real key role in the procure-

uously review and evaluate the new

ment transformation journey. Established

processes and tools that you implement.

and emerging technologies enable

We will implement new processes and

businesses like Telkom to become far

tools, which should bring significant effi-

smarter and more scalable.For Van Zyl

ciencies but let’s create checkpoints and

and procurement, digital innovation

evaluate and make improvements where

will enable a move away from a repet-

necessary. The procurement or the

itive manual task environment to a mix

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of more analytical and creative thinking

a people and relationship oriented

roles that’s focused on driving a compet-

function. This is nothing new, but as

itive advantage and strategic value. “The

we discuss transformation through

procurement function is able to develop

processes and digital tools one can

and create innovative business models

be forgiven for forgetting that they are

and become a valuable strategic busi-

worthless without the right people strik-

ness partner,” he says. “We become a

ing the right relationships. “The people

partner backed by real time access to

in your team are the biggest asset that

data and market trends to advise and

you can ever have,” he says. “If you

support strategic decision making in the

don’t have experienced, reliable, strate-

business, but also significantly improve

gic sourcing professionals, and not even

on timeline for contracting and transact-

only strategic sourcing, really in every

ing and approvals. That’s what digital

corner of the value chain, whether it’s

procurement means to us.”

somebody that focuses on analytics that

Procurement and supply chain is

can drive the insight for you, or whether

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the person actually needs to look at your procurement operations environment, you rely so much on them.”

With the right people, the right process and ongoing discussions with the suppliers, the relationships between both Telkom and said suppliers can evolve and take on new and more fruitful forms. Through a contract and supplier relationship management program that allows Telkom to navigate geopolitical tensions and restructuring of the global trade dynamic. As well as individual supply management account plans based on the supplier risk segmentation and joint balance performance scorecards, Telkom can continuously assess performance across multiple factors. Van Zyl points to substantial improvement of raw supply performance and noteworthy reductions in contract value leakage. “It also opened the communication between us, the suppliers and the internal business partners, because everybody is now seeing that value,” he says. “We’re also doing an annual supplier survey, to really understand their experience in dealing with us. So we’re looking at the entire process from onboarding, the RFP process, the engagement with the procurement team, transaction right through to the payment process. That helps us identify and address the pain points and to make the interactions with Telkom as seamless as possible.”This model truly enables Telkom to continue to improve the supplier experience because, as Van Zyl notes, Telkom wants to be viewed as the customer of choice, and thereby gaining access to the best offers from the best suppliers in the market.

In early 2020, the world stood still as the COVID-19 pandemic swept the globe. Even now, the ramifications w w w . c p o s t r a t e g y. c o m

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are still being felt, but through adversity

where there are single points of failure

comes opportunity and Van Zyl, along

on critical supply material or equipment.

with many procurement professionals,

In acting fast, Telkom were able to put

this crisis has highlighted the call for a

alternative sources in place where viable.

new approach where agility and change

Thanks to business continuity plans in

are not only essential but unavoidable.

play for its strategic suppliers and the

Telkom were able to identify concen-

suppliers where there’s significant risk,

trated risk with certain key suppliers, and

and the work that Van Zyl has been

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doing these past few years, Telkom was

understanding of our suppliers and the

able to thrive.

supply networks allowed us to make

“We were quite fortunate in that, thanks

sound decisions based on a comprehen-

to what we had in place, the disruption

sive understanding of the current poten-

to our business was actually not that

tial future supply sources, and develop-

significant,� he says. “Our analytical capa-

ing trends, all supported by detailed cost

bility and the role of analytics will play a

and risk analysis.

more important role, as a more detailed

Given the tumultuous path that 2020 w w w . c p o s t r a t e g y. c o m

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has put many on, how much has that changed the road ahead? Many can and have speculated that we will see a new world of procurement and supply chain thanks to a rethinking of what is truly effective and strategic in light of COVID-19. For Van Zyl and Telkom, the road ahead remains one of continued strategization. Cash flow will continue to be managed, cost reductions and further seamlessness in the process remain the core targets and further implementation and development of the analytics and automation of reporting and insight developing too. But what will be key for Van Zyl in order to succeed?

“If you always look for that opportunity to provide more value to the business, then you’ll earn your seat at the table,” he says, acknowledging this oft used expression. “It doesn’t take away that you need to be competent, and you need to execute well. But unless you have a seat around the table, you don’t even get the opportunity to deliver value, and you remain a support function to a support function. Seek that opportunity to provide value to the business, have a blind focus and you can do your job and deliver value.”

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