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Procurement has evolved from a service into a function within companies in the past decade, according to the CPO at Deutsche Telekom.
Eva Wimmers, SVP of group procurement, told the eWorld Purchasing & Supply conference in London yesterday that purchasing today was “sometimes not even recognisable” and now had to take account of “demand shaping” and spend management, which were functions beyond order, contract and vendor management and strategic sourcing.
“A service always comes at the end, when everyone else in the management have taken their decisions. Procurement is a function like technology, IT or marketing,” she said. “You have to prepare for this, it does not come by itself.”
She told delegates at the event demand shaping involved working with suppliers and stakeholders to establish exactly what was needed.
Instead of a one-hour meeting with suppliers involving buyers presenting what they required for 50 minutes, she said a “buyer in the future goes there and asks questions for 50 minutes and listens carefully”.
Wimmers described spend management as “creating transparencies in your company on what money is spent on”. “In the beginning there will be lots of digging into budgets. Then you create new spend rules,” she said.
She said creating new rules for business mobile phone handsets used by Deutsche Telekom employees saved the company â‚¬14 million (£11.8 million).
“Our company needs much higher savings in these economically stretched times than we can get in a pure volumes negotiation,” she said. “It’s not a different job, it’s doing your job differently.”
Wimmers said two factors were necessary to bring change, and these were board level acceptance and acceptance of new roles in procurement departments.
“It’s quite different capabilities and skills which are needed today,” she said after her speech. “Some people won’t be able to follow this route but many people are.”