KPN has transformed its procurement strategy and renewed the organisation’s goals based on a future where algorithms have replaced human processes.
KPN, a Dutch telecommunications and IT provider, has focused on the optimisation of human-to human-interaction and relationships through upskilling the workforce, building alliances and mergers and acquisitions, and exploring innovative problem-solving strategies such as crowdsourcing.
Michelle Baker, chief procurement officer at KPN, told SM: “We believe that somewhere between 50-70% of the source-to-contract process chain, as it exists today, and possibly higher in the purchase-to-pay process chain, is likely to be high potential candidates for robotics process automation.
“The use of artificial intelligence is in scraping vast amounts of data for supplier intelligence, performance, market trends, market statistics, supply risks, supplier results, news, rumours, and supply mergers and acquisitions.”
She said that the procurement strategy is underpinned by the belief that either the procurement organisation reinvents itself, or the procurement industry will be outsourced to machinery. The transformation process began in 2018 and is expected to be completed in 2020.
KPN have been building alliances with institutions and corporations to develop an “alliance-type structure” based on a model whereby “human-to-human interface will increase rather than decrease”.
This has involved an in-depth, purpose-led learning and development plan for all employees, with “70% on-the-job learning, 20% coaching and mentoring, and 10% classroom learning,” according to KPN. Also, the entire organisation has undergone training in understanding data models as it is believed to be a “fundamental skill for the future”.
“We believe in expanding the scope to the other types of relationships that can deliver an organisation strategy. Alliances will become much more of a future for successful organisations and, therefore, the skills required are human-based and centred around an efficient model by which you collaborate and get a one-plus-one-equals-three outcome,” Baker said.
“We believe we can become involved in the scouting for merger and acquisition targets much more,” she added.
KPN has also invested in different programmes which explore innovative solutions tackling organisational and procurement challenges.
“Increasingly, we want to challenge how we can create revenue for the organisation and bring specific elements of innovation, cost avoidance, and value-creation in from our supply base through structured intervention and more sophisticated collaboration techniques,” said Baker.
A successful pilot programme on crowdsourcing ideas was run last year with the aim to reduce cost. The programme asked all levels of employees to contribute ideas to cut costs based on the theory that decision-makers within procurement are not the only people with the knowledge to identify cost-cutting strategies. This will be refined and continued as a similar programme this year, according to KPN.
“We believe that our call-centre operatives, our engineers that go out and deal with our end users etc have a visibility of where we’re wasting money or not cost optimising, so we’re busy running gamification as an automated means for generating vast volumes of ideas,” said Baker.
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