Transforming Procurement: Real Stories, Real Results

Tele2, a mobile operator has been quite successful in the telecom market.

When Eugene Michael, the new Director of Procurement and Logistics, joined the company, he was given ambitious tasks that were as ambitious as the brand itself. He tells us how he managed to fulfill them.

Before automation: long procedures, non-transparency

In the past, tenders and competitions were held by mail. Voting of the tender commission took place in person or by e-mail. Low-value purchases, sole-source purchases, plus requests for information (RFIs) and requests for quotations (RFQs) were conducted there in the mail. That is, several hundred procurement staff communicated with each other in correspondence through a dedicated mailbox. All procurement information was collected manually and summarized in an Excel spreadsheet.

This approach was highly inefficient, not only because it was labor intensive, but also because the process was not managed in a timely manner. After all, to manage procurement “here and now” you need to rely on operational data, not on analytics that are collected manually with a long delay.

Business units within the company were also uncomfortable. The initiator of the procurement could not get real-time information about the current status, see the approval stage, download or correct the documentation. Despite all the rules, regulations, procurement plans and reports, the initiator could get all the necessary information only from the contractor, which meant that the process was not transparent for him.

After automation on Zinit: how procurement works in Tele2 nowadays

On average, the company's procurement time has decreased by 26% and now stands at 34 days. This became possible due to the alignment of processes and automatic generation of tender documents, as well as the possibility of “self-service” of employees.

Results of the system operation

During several months of implementation and use of the system, my team and I managed to develop a standard for implementation of the automation tool with customization for our needs. It is a fully described and digitized process. By changing modules and control points, you can use this template literally for any other business that needs procurement automation.

The following changes occurred in Tele2's procurement processes with the introduction of Zinit:

• On average, the company reduced the period of procurement activities by 26%
• The process became transparent for Tele2's internal customer
• Seamless coverage of the entire procurement cycle: from need to contract execution.
• It became possible to customize approval business processes with advanced features
• Documents began to be generated automatically and according to templates: tender documentation, protocols, contracts, notices
• A customizable system of notifications and reminders has appeared
• Built-in and customizable checks of compliance with Tele2 Procurement Policy at each stage are now available.
• Real-time analytics, which can be used after the system has been enriched with data

Summary and business plans

The objectives of the project were:

1. To increase systematization, transparency and service level for the business customer
2. Reduce the time to complete a procurement task
3. Automate reporting and analytics
4. Do not increase import substitution costs compared to the use of box solutions from Western vendors

All of this we have succeeded in doing. The strategy I am pursuing is to bring procurement processes into a single ecosystem as much as possible

Today, T2 has a tool for automating the procurement process, which shows that the company understands the requirements of the modern market.