- Deutsche Telekom is a large telecommunications company with over €58.7 billion in revenues, 129 million mobile customers, and over 235,000 employees worldwide.
- Procurement is undergoing a transformation from a service function to one that shapes demand and manages spend across the company.
- New skills, mindsets, and roles are needed for procurement professionals, including demand shapers, strategic negotiators, and spend managers who work closely with internal partners.
1 of 16
More Related Content
Eva wimmers, SVP Procurement at Deutsche Telekom AG - Procurement Transformation
2. Deutsche Telekom.
• Revenues of EUR 58.7 b
(more than 50% outside Germany)
• 129 m mobile customers
• 34 m fixed‐network lines
• 17 m broadband lines
• More than 235,000 employees worldwide
• Operating in 50 countries
• Procurement responsible for a total order volume
of EUR 21.5 b
1
4. Procurement is evolving from a service to a
function.
€€ +
Spend
Management
Demand Demand
Shaping Shaping
Strategic Strategic Strategic
Sourcing Sourcing Sourcing
Vendor Vendor Vendor Vendor
Management Management Management Management
Contract Contract Contract Contract Contract
Management Management Management Management Management
Order Order Order Order Order Order
Management Management Management Management Management Management
3
6. Mandate Demand Shaping.
The preparation phase before the RFQ or negotiation can be done with the help of vendors.
Transparency of demand definition
Discussing with stakeholders the reasons for their demand
definition and the targets by which they are measured
Understanding concrete examples of standardized demand
Discussing demand with stakeholders and alternatives such
as make or buy, feature‐shaping, etc. according to the
actual necessity
Redefining new demand definition agreed with
stakeholders
Key is: Setting up a functional RFQ aligned with stakeholder
vs. specification based RFQ!
5
7. Mandate Spend Management.
Spend Management is per definition not related to the vendor, unless combined with related processes.
Spend Management embraces an existing potential. For exmaple some budget
lines are common across all departments, like Marketing materials, Consulting
and IT Controlling. However the non‐transparency of spend means these
categories cannot be steered
Create transparency on spend externally and internally through cohesion with
the functional side and countries
True transparency enables sourcers to act as cross‐functional budget
managers (not possible from the functional side because the view is too
narrow)
Analyze what stakeholders buy and cluster costs
Discuss findings with stakeholders
Create “rules” on how to spend such clusters in the future
Monitor and manage the newly created spend transparency
5
8. Bringing the mandates to life.
Personal acceptance of the changing roles.
Demand Shaping requires a new level of trust with vendors ‐ allowing vendors
to join discussions instead of simply negotiating. Accepting that vendors
sometimes know best
Spend management brings completely new elements to a traditional
Procurement role, e.g. similarities to Controlling tasks. Individuals must be
willing to learn new skills and Controlling needs to be the third partner in the
club
The mode of operation changes with Demand Shaping and Spend Management
because the vendor can contribute to savings in this without touching the
margin
Part of accepting the new Procurement roles is accepting you can’t achieve
successful results if you work alone: Procurement power means cohesion!
6
9. Bringing the mandates to life in your company.
Demand Management requires Board‐level
acceptance. If you are not in Board‐level discussions
with the functional side, your mandate may never
become official
Create acceptance of the new Procurement roles in
your teams
Cohesion on the functional side and with the
countries is essential: Create willingness and pride
to work with your teams and be part of it!
7
10. Bringing the mandates to life in your teams.
The skills required to deliver Demand Shaping and Spend
Management are not always instinctive. People need
training, and must be given time to adopt new ways of
thinking and working
Sourcers need a new level of expertise in product areas
and in the processes surrounding products. They need an
understanding of where demand comes from and where
transparency can be created within internal processes
New skills are needed to manage vendor relationships as
the focus moves to discussion and partnering. A dialogue‐
rich organization needs to be encouraged to talk and to
make time to listen
8