BT Sourced powers procurement transformation with AI, automation and analytics

BT Chief Procurement Officer Cyril Pourrat wants to make buying telecoms equipment, software and services as easy as ordering a takeaway from a smartphone.

As head of BT Sourced, the standalone procurement company that the operator spun out in April 2021, Pourrat has bet big on digital tools to streamline processes and on negotiation analytics, which, wherever possible, put some of the sourcing, ordering, and buying decisions into the hands of data scientists and artificial intelligence (AI)-powered bots.

The company uses 11 digital platforms in its procurement operations. Pourrat said that “consumer-grade user interfaces” are making these systems easy to use for BT stakeholders who are not trained procurement professionals. He wants people to be able to access the information they need in just “two clicks” from any device whether it is a smartphone, tablet, or laptop.

In a sign of how things are changing, the first users of some of the new digital tools are not from the finance department or the procurement company but from BT business units.

“We’ve cracked [open] a bit the procurement black box … so [the business units] can have visibility and access to any of our tools whenever they want … This is a change in the way we’re interacting with the business,” said Pourrat.

Some processes are getting faster. For simple purchases, one of BT Sourced’s digital solutions has shortened ordering times from days and weeks to seven minutes, he said. In some cases, a bot can take purchase requests, select product options from the market, present them to stakeholders, and if approved, can place the purchase order “immediately,” he explained.

BT Sourced recently flagged on LinkedIn a few of its digital tools, including:

• Automated payment platform from U.S.-based Candex, which is part of BT Sourced’s Procurement Garage that works with startups.
• Smart sourcing platform and AI technology, called Glo, from U.S.-based Globality, which BT Sourced uses to procure suppliers in the areas of consulting, marketing, IT, legal, and human resources. Last year, BT Sourced said it had placed around £2bn of spend on the platform.
• AI-powered automated sourcing platform for tail spend from U.S.-based Fairmarkit.

Pourrat’s ambition is for the company to become an “open platform” for transformation across BT Group and within the procurement function. The company is also exploring new business models and ways of partnering with third parties to differentiate itself from common “procurement-as-a-service” providers. Pourrat noted that the open platform is “not there yet,” because the company has been focused on building its operations practically from scratch from its new headquarters in Dublin over the last two years, but he is clear that this is where the company is headed.

Digital boost for ESG

The digital strategy is intended to not only speed procurement processes and reduce costs, but also enable the company to track “at scale” risk management and supplier commitments to BT’s Environmental, Social, and Governance (ESG) targets, he said.

In the increasingly strategic area of sustainability, procurement plays a big role because most telecom operator carbon emissions are indirect and come from their supply chain and customers’ use of products and services (i.e., Scope 3 emissions).

According to BT Group’s Manifesto Report 2022, the operator reduced Scope 3 emissions by 28% compared to target base year 2017 by working with its suppliers as well as helping small businesses to set net zero targets. BT aims to cut indirect emissions by 42% by 2031 and to become a “net zero carbon emissions business” across its entire operation, including suppliers and customers, by the end of 2041.

BT is among the highest-rated companies for engaging with suppliers on climate action, according to the Climate Disclosure Project (CDP)’s latest annual review of company practices. In 2022, BT increased the weighting of “responsible and sustainable” criteria from 10% to 15% in initial supplier assessments.

BT Sourced is working with startups to track how BT’s 14,000 suppliers contribute to its carbon footprint, Pourrat said. For example, it has mapped the manufacturing locations of all its suppliers and their logistics routes to measure the emissions of delivering products to the operator.

Digital ambition takes on legacy complexity

However, despite the new company’s digital sprint, Pourrat acknowledged that complexity and “cumbersome” processes persist with traditional RFPs and they are particularly acute for IT procurement. In the telecoms sector, an RFP can drag on for months, out of step with fast-changing technology and stakeholder requirements. Stakeholders can feel disconnected from the process when procurement and finance teams takeover and sometimes do not get what they originally requested or intended.

With an air of been-there, seen-it, done-it, Pourrat recognized these difficulties and had some sympathy for IT teams because their buying tasks are much more complex than network teams. But he also acknowledged that there can be better ways to work together among stakeholders, suppliers, and procurement.

“The network people are buying equipment that they use themselves. The IT people are going to source something on behalf of a business unit, which is not always very clear their need… So on the procurement side, dealing with the network is easy because they know what they want… [whereas] IT is a go-between and very different in the way they are approached,” he said.

The drive to roll out stakeholder-friendly digital procurement tools is aimed at easing these traditional pain points.

Looking ahead to automated buying

In future, procurement could have less of a hands-on role in certain transactions as AI and negotiation analytics become more sophisticated to handle basic decision making. Stakeholders would be able to make deals with suppliers directly with procurement “in the background checking that everything is ok,” with “all the proper analytics and controls” and intervening as needed, he said. “So the idea for me is really to bring the tools to the users, while right now we're asking the users to go to the tools and the process,” he added.

Pourrat described the negotiation analytics team is the “Area 51” of BT Sourced. They are data scientists who are looking ahead to what comes next in procurement technology. For example, they are exploring how to enable a stakeholder to issue a statement of work via a voice command.

It is also working on “machine-to-machine procurement.” If a satellite-based monitoring system detects a fault in a base station, for example, it can notify an auto-procurement system that will dispatch an engineer to the site, log the engineer’s report and invoice, and process the payment, all without human involvement.