Driving Change: Procurement as a catalyst

Driving Change: Procurement as a catalyst

Driving profitability is crucial for all procurement organizations eager to drive change.

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Excerpts from Dr. Volker Pyrtek


Procurement organizations have the ability to benchmark their own company through the lens of the supply base

A CPO can help industries to transform and can help operators to transform, because we see the company with the eyes of a supplier to a certain degree, and so we have the capability to benchmark our own company, because in our negotiations, and nowadays, questions and daily discussions with suppliers, we learn a lot about good practices in the market and what other participants in the industry are doing, so benchmarking is one area, benchmarking with good practices, which you see otherwise, somewhere in the market is just an easy way to help to transform a company.Pyrtek discusses the importance of the procurement organization being proactive to better act as a catalyst to the overall business.

Design to cost methodology can be driven by the procurement organization

Very often, we trigger some disruptive moves.  For example, the implementation of design to cost methodologies in the telecommunications industry was mainly driven by procurement, was not so much driven by more traditional parties in the companies.  We were pretty much sitting in the driving seat for design to cost at Deutsche Telekom, and now at France Telecom.

The procurement role can be proactive or passive

All of this is not done by procurement only.  Procurement is pretty much a team play, but the procurement role can be a proactive role, or just a passive role.  I prefer the proactive role.

Procurement can drive benefits beyond purely cost savings

The benefits of buying to shareholders is on one end of cost savings.  It’s a key bottom line contribution that makes the CFO happy. Besides pure savings there are other benefits which we deliver on a daily basis in the meantime.  One example is, for example, procurement engineering, which is an engineering team identifying cost drivers in our technology in devices and all this stuff we are buying.  That helps us tremendously to streamline the technology we are holding out, so we are contributing here with technical expert workshops and helping the company to streamline, because it’s not only the price, it’s also what you purchase.  If you want to become more efficient, you don’t have to challenge this price.  That’s a good negotiation, but that is more traditional.  But more modern approach is designed to cost engineering, cutting costs out of your requirements, which is more and more important for all industries.  Another benefit, on top of savings, would certainly be the whole value chain where you redefine what you make and what you buy, instead of producing and developing new services, we just partner with excellent companies in the valley, so I spend some time in the valley to find those partners and find also a commercial setup, which works for both of us. 

About Volker Pyrtek, BuyIn

Volker heads BuyIn, the 50:50 Procurement Joint Venture between Deutsche Telekom and Orange with offices in Paris and Bonn. He is responsible for strategic procurement activities in the customer equipment, network and service platforms areas of both operators, covering a spend of approximately 13 billion euros in almost 50 countries. Volker has more than 20 years of experience in various executive positions and sectors. He joined Deutsche Telekom in 2002, as Head of Procurement for T-Mobile International, Bonn. In 2007, he became Chief Procurement Officer for Deutsche Telekom. Before that, Volker held various management positions at Bayer in Leverkusen. In 1997, he became CEO of Investment Bank Spütz, Düsseldorf, and simultaneously became Chief Finance Officer (CFO) of Tullet&Spütz, London. He was co-founder of the E-Procurement marketplace Goodex in 1999 as CFO and Director for Central Europe.

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