BT to halt supplier 'gravy train'

2 July 2008
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03 July 2008

BT will not renew contracts with long-standing suppliers that are not prepared to collaborate as the company overhauls its purchasing processes.

Neil Rogers, chief procurement officer at the telecoms company, told SM some vendors are more focused on their sales figures than investing in the future of BT. He said the firm wants to work more closely with suppliers and would cut ties with those who have become complacent about the company's business.

"Some people in the past have got into BT and ridden the gravy train because we've not been joined up and have not been strong enough. I can see where those deals are and over time I'll break them," he said.

"Some suppliers see their quarterly sales targets as being the way to behave, and it isn't, so we'll change that over time."

Rogers wants to dispose of "old-fashioned" procurement relationships and build partnerships with suppliers that are going to consider the challenges that BT faces. These include managing costs and improving its competitive position in the sector.

He said when suppliers are asked to look to the future and take on different contracting models, which balance both risk and reward, the response is underwhelming.

"Some of it just doesn't compute, it's like you're talking a different language. They think we can't shift them - well, we will."

Suppliers that are willing to co-operate will be able to share in the benefits of the relationship. But Rogers is keen to discover who these are himself and will apply a hands-on approach to assessing the organisations that BT buys from.

He is involved in every project, which allows him to gauge who will invest with the company and who won't. "You've got to feel it, you can't have it written to you. You have to see it in the way people respond to your pushes, challenges and demands."

His ambition to see suppliers delivering more forms part of a wider procurement overhaul at the firm. Since taking up the CPO role last September, Rogers has introduced a 13-step plan to transform the way the function operates.

He aims to boost the reputation of the department both externally and within BT. But although perceptions are beginning to shift, he said procurement at the company is nowhere near where it needs to be.



SMjul2008

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