As part of its Making Finance Brilliant Programme, BT implemented SAP S/4Hana for finance to provide a digital core to facilitate procurement. The company also moved its suppliers to the SAP Ariba procurement platform and deployed SAP Concur to manage costs.
BT Sourced, a separate procurement business within the telco, recently deployed an artificial intelligence (AI)-powered smart sourcing platform from Globality to transform how employees procure services.
BT’s chief procurement officer, Cyril Pourrat, described BT Sourced’s role as “buying the right thing at the right price”.
This is an important consideration, as the company spends billions every year on purchasing goods. “We are completely focused on our cost base for all our stakeholders and shareholders,” he said.
For Pourrat, a procurement system must do more than track purchase orders and provide a consistent comparison of goods and services. The ability to extract historical data from the enterprise resource planning (ERP) system and track purchases across the BT Group is key to understanding spending trends and making more informed negotiations with supplier.
Shopping with a difference
BT Sourced, which runs out of Dublin, is set up in 2021 to deliver digital transformation across the company’s procurement.
As with other telcos, procurement spending accounts for a large portion 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 said. “We truly believe that digital is the way to go. It’s the way that technology can transform shopping.”
“We truly believe that digital is the way to go. It’s the way technology can transform shopping”
Cyril Pourrat, BT Sourced
He said that even people who are not procurement professionals can use the Globality platform. For Pourrat, business software should be “consumer grade”, which means users don’t need training to understand it. “We want everything to be achieved with two clicks, and preferably just by speaking,” he said.
In fact, Pourrat considers the use of natural language queries in such business software as a way to simplify the work. While there is much debate about ChatGPT and how it will replace certain roles in the industry, Pourrat believes the role of the procurement team is not going away.
The team, he said, will focus on more strategic shopping areas. For example, with greater levels of visibility enabled by digitization, it may be possible to deliver predictive purchasing.
“We had a lot of ideas,” he said, but the system and the procurement team’s workload meant they weren’t implemented.
For Pourrat, the promise of natural language query processing is that it can greatly simplify the way users interact with business software that drives the purchasing process.
For example, he said, users must answer a set of questions. “They just enter their response in natural language and the tool generates a statement of work, which is sent to our preferred suppliers,” he said.
Once it has been received, the supplier can respond directly using BT’s procurement platform and the user can track its progress.
Activity analysis to determine actions
As the trend moves toward simplifying the workflow so users don’t need to be procurement professionals to use the system, Pourrat believes the role of the procurement team will become more analytical. The number of data points they can collect and the ability to deep dive can improve their understanding of suppliers and aid in the decision-making process.
He said: “What does it mean if I move a little to the left or a little to the right? What are the consequences?” In the past, he said, those working in procurement needed a lot of knowledge in their area of specialization to help them make such decisions.
Pourrat has a team of six data scientists working on what the company describes as “negotiations and analytics”. The idea is more than just presenting information on a dashboard. Instead, the aim is to see how all the data collected can be used to improve how BT deals with suppliers.
“We know the purchasing patterns and can look at the last three years of purchase orders,” he said. Using this information, Pourrat says the procurement team can then have a conversion of people in BT’s business units responsible for purchases.
The level of detail that can be obtained from procurement data makes it possible to understand how much a particular supplier is spending on a monthly basis. This becomes a stepping stone to predictive buying.