As part of its Making Finance Brilliant Programme, BT is implementing SAP S/4Hana for finance to provide a digital core to streamline procurement. The company has also migrated its suppliers to the SAP Ariba procurement platform and is deploying SAP Concur to manage expenses.
BT Sourced, a separate procurement business within the telco, has recently deployed an artificial intelligence (AI)-powered smart sourcing platform from Globality to transform how employees source and procure services.
BT’s chief procurement officer, Cyril Pourrat, describes the role of BT Sourced as “buying the right stuff at the right price”.
This is an important consideration, given the company spends billions annually on buying things. “We have absolutely focused on our cost base for all our stakeholders and shareholders,” he says.
For Pourrat, a procurement system needs to do more than track purchase orders and provide a side-by-side comparison of goods and services. The ability to pull in historical data from the enterprise resource planning (ERP) system and track purchasing across BT Group is key to understanding spending trends and making more informed supplier negotiations.
Procurement with a difference
BT Sourced, which runs out of Dublin, was set up in 2021 to deliver digital transformation across the procurement function of the company.
Like other telcos, procurement spend accounts for a significant proportion of the company’s annual turnover. But while rival businesses also run separate procurement operations, Pourrat wants BT Sourced to be different.
“We want you to fully leverage AI, machine learning and the digital ecosystem to position ourselves differently compared to other procurement companies,” he says. “We truly believe that digital is the way to go. This is the way that technology will enable procurement to change.”
“We truly believe that digital is the way to go. This is the way that technology will enable procurement to change”
Cyril Pourrat, BT Sourced
He says even people who are not procurement professionals are able to use the Globality platform. For Pourrat, enterprise software needs to be “consumer grade”, which means users don’t need training to understand it. “We want everything to be achieved in two clicks, and ideally just by speaking,” he says.
In fact, Pourrat regards the use of natural language queries in such enterprise software as a means to simplify work. While there is plenty of debate over ChatGPT and how it might replace certain industry roles, Pourrat believes the role of the procurement team is not going away.
The team, he says, will focus on the more strategic areas of procurement. For instance, with greater levels of visibility enabled through digitisation, it becomes possible to deliver predictive procurement.
“We’ve got a lot of ideas,” he says, but the system and the workload of the procurement team has meant that they have not been implemented.
For Pourrat, the promise of natural language query processing is that it will greatly simplify the way users interact with business software that drives the procurement process.
For instance, he says, users simply need to answer a set of questions. “They will just enter their answer in natural language and the tool will be able to create a statement of work, which will be sent to our preferred suppliers,” he says.
Once it has been received, the supplier is then able to respond directly using BT’s procurement platform and the user is able to track its progress.
Analysing activity to inform actions
While the trend is towards simplifying the workflow so users do not have to be procurement professionals to use the system, Pourrat believes the procurement team’s role will become more analytical. The amount of data points they are able to collect and the ability to deep dive will improve their understanding of suppliers and help with the decision-making process.
He says: “What does it mean if I’m moving a bit more left or a bit more right? What are the consequences?” In the past, he says, those working in procurement needed a lot of knowledge in the area they specialised in to help them make such decisions.
Pourrat has a team of six data scientists working on what the company describes as “negotiation and analytics”. The idea is to go beyond merely presenting information on a dashboard. Instead, the goal is to look at how all the data that is being collected can be used to improve how BT negotiates with suppliers.
“We know the purchase patterns and can look at the last three years of purchase orders,” he says. Armed with this information, Pourrat says the procurement team can then have a conversion with the people in BT’s business units responsible for purchases.
The level of detail available from the procurement data makes it possible to understand how much is being spent with a particular supplier on a month-by-month basis. This becomes a stepping stone to predictive procurement.