Telco procurement giant harnesses data to navigate volatility

When Béatrice Felder was appointed Chief Executive of BuyIn in 2020, the international telco procurement alliance was focused on obtaining products and services at the best price, quality, and delivery times. Almost three years later, the world has changed and BuyIn has navigated turbulent times for the telcos it supports by adopting a broader set of priorities and more agile ways of working.

The deepening trade rift between China and the U.S., the coronavirus pandemic, war in Ukraine, and extreme weather events are some of the crises over the last few years that have caused severe supply chain disruption, chip shortages, high inflation, and a surge in energy costs. Meanwhile, demands for urgent climate action are growing.

Given the continual upheaval, BuyIn put in place a new process for crisis management so that it can be prepared for disruption. “I hope there won’t be any new crises, but BuyIn has proven its ability to manage, and we are ready for sure,” said Felder.

The procurement company has also adapted its strategy and expanded criteria for suppliers. For example, to address logistics disruption, BuyIn works closely with the suppliers to define tighter delivery requirements and to ensure the supplier’s ability to ship products on time. To work around chipset shortages, the company has started to source from tier-two suppliers when needed.

Strategically, BuyIn has added requirements for CO2 emission reduction commitments to support Orange and Deutsche Telekom’s sustainability targets of reaching net zero. And when it comes to IT procurement, both groups include criteria for supporting TM Forum’s Open Digital Architecture (ODA).

BuyIn was originally set up as a strategic procurement 50-50 joint venture by Deutsche Telekom and Orange in October 2011. Since then, it has grown into a partner alliance with the additions of Bell Canada, Proximus in Belgium, and NOS in Portugal and supports 45 operators around the world, most of which are local affiliates of DT and Orange. In total, BuyIn manages €20 billion of spending across networks, IT, devices and platforms, working together with the stakeholders from sourcing strategy to signature. The mother companies and partners are responsible for the ordering and billing relationships. BuyIn has about 270 employees based mostly in Bonn, Montreal, and Paris.

Agile IT procurement

It is not just global events that BuyIn must adapt to - telco networks and IT are also changing and driving the need for faster and more flexible procurement processes.

Felder said her role is to work with the groups and partners in order to understand their technology and IT strategies and put them in place to “find the best solutions, best partners, and best suppliers.” She stressed that “proximity to our stakeholders is very important.”

BuyIn, DT, and Orange have adopted agile ways of working together, whereby cross-functional groups comprising people from procurement and stakeholders can make faster purchasing decisions than the traditional RFP process. “We learned with the technology team a long time ago and that’s now completely embedded in the way we work with our stakeholders,” she said. The first “agile contracts” for IT were completed a few years ago and BuyIn now has many agile contracts with IT services companies.

However, Felder does not want to “kill all RFPs.”

“It’s a strategic discussion with stakeholders … It depends if it makes sense to foster competition … or we consider that we are locked in and we want to open the game to another supplier or have a [second] source,” she said.

Some projects are not suited to an agile process. “It depends on the type of projects … you will still have RFPs in IT for laptops or servers, for example, where competitors exist and we need competition to obtain the best conditions,” she said.

In some cases, an RFP is the best way to achieve an operator’s strategic goal.

Disaggregation creates more complexity

Traditionally, IT procurement was always more complex than network equipment purchases. In broad terms, IT purchases are sprawled across software, hardware, and IT services, whereas network deals are for pieces of hardware that are usually from one supplier. Disaggregation adds complexity to network procurement that could be on a par with IT.

The shift to network disaggregation is also bringing BuyIn’s network and IT teams closer together. “As the network is becoming more like IT, we do cross-fertilization between the teams to avoid silos and work together,” said Felder.

“Disaggregation is good from a procurement perspective because we will introduce new suppliers. It also means more work for us. In the past you had only one supplier for a complete stack and one solution. Now you have layers with different suppliers to handle as well as the complete integration of the different elements,” she explained.

Overcoming uncertainty with data

Felder pointed to BuyIn’s data strategy as one of the keys to its ability to weather the current volatility in supply chains and stay a step ahead as conditions change.

“We have a bigger need for visibility and to anticipate, which is why the usage of data and data analytics is even much more important now,” said Felder.

In the current high inflation environment, she said there are more requests from suppliers to raise prices. BuyIn relies on data analytics to support decisions on whether to accept proposed price changes or look for alternative suppliers. Data analytics are also essential in target costing and understanding the total cost breakdown of products, including everything the chipsets to the materials and transportation.

“This is all about expertise, agility, data, and commitment,” she said.