BT was sourcing the software and hardware for its Smart Hubs from just two suppliers © BT
BT was sourcing the software and hardware for its Smart Hubs from just two suppliers © BT

How BT solved a sourcing dilemma

BT is insourcing software development for its broadband routers in order to widen its supply base for hardware design, a conference was told. 

Cate Warman-Powell, head of procurement, consumer technology and supply chain said more suppliers were available to provide hardware, whereas far fewer were capable of delivering both hardware and software.

Speaking at the eWorld Procurement and Supply conference, she told delegates previously they depended on just two suppliers to provide hardware and software, and the situation was leading to rising costs.

“We decided to insource the software development. We are going to create our own BT Hubs software platform. From a selfish perspective, it opens up a whole new pool of suppliers to me and my team, as original design manufacturers can now be included in our sourcing process,” she explained. 

“It means we've got a much bigger supplier base to go and seek the hardware from. It solves my issue but it also means we're going to be able to offer more features and services to customers quickly and reduce our time to market.”

When Warman-Powell took on the role in April 2019 the firm was facing cost pressures and a lengthy process of up to 18 months to get its routers to market.

“I wanted to try and make my life easier but I quickly realised something radical had to happen to break the existing cycle. We had to not only create a better sourcing model but also drive efficiency through the end-to-end lifecycle of the devices,” she said. 

Another challenge the firm is facing is the move towards a converged network – a plan to use its broadband, mobile and wifi capabilities to provide “seamless connectivity for customers”.

“Converged network services are going to take a huge amount of horsepower to deliver. By 2025, it's been suggested we're all going to have well over 100 devices in our homes all requiring connection and our gateway needs to handle that,” Warman-Powell said. 

Building an entirely new platform will take time, but Warman-Powell believed the positives outweigh this as the platform will be used across BT’s four brands – BT, Plusnet, EE, and Openreach. 

“We just develop this once. It's going to take us a bit of time to do it, but it means we're able to layer on all the new services and features and every brand will be using this platform but providing the different services its customers need,” she explained.

In order to get support from the wider business to take on a project of this scale, Warman-Powell said it was essential to build a strong business case with large predicted savings.

“Having a big number or something that you can really grab onto is really important. The investment is only going to come from the finance guys, and they're only going to do it if they can see a big result,” she said. 

The firm is working with a software supplier initially to build the in-house platform that will be called Indigo. It has also received over 20 responses from suppliers for the first stage of the process to design and build the hardware for its Smart Hub 3 router, which will be the first to use the platform. 

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