Whether cell phone contract, fixed line, or MagentaTV – it is all very easy for us as end customers to order and buy from Deutsche Telekom. But did you ever ask yourself who organizes all that from behind the scenes and what Deutsche Telekom’s shopping list looks like?
Fundamentally, there are two different types of procurement at Deutsche Telekom: strategic and operational. Strategic procurement covers analytical planning and the optimization of purchasing and procurement processes with a focus on controlling the development of material costs. As part of my cooperative study program I had the opportunity to work in Operational Procurement at Deutsche Telekom. Operational Procurement is part of “Deutsche Telekom Services Europe SE”, a fully owned subsidiary of Deutsche Telekom AG, and is responsible, among other things, for internal procurement where a wide range of products are ordered to cover the entire Group’s internal demand.
What is on the shopping list of a large corporate group?
Our shopping list is probably not that different from your own. We need office material, keyboards, headsets, desks, office chairs, laptops, smartphones, etc. so as to ensure that our employees’ workstations are optimally equipped. The key difference is – naturally – the quantities that are needed. In a group with approx. 211,000 employees worldwide, office equipment such as desks, office chairs, or laptops must be replaced, and therefore reordered, on a regular basis.
Apart from that, Deutsche Telekom obviously purchases many other products and services too. These include for example servers and licenses to ensure that the best network in Germany remains stable at all times and is continuously improved. And on top of that, many services are needed which are offered by external providers.
Here is a simple example: A customer wants fiber-optic cabling to be installed in his home for faster connection to the internet. This means we need to work with an underground engineering company for our FTTH (Fiber to the Home, Video) buildout. This company lays the required cable underground, connects it, and then backfills the trench they dug for it. A third-party provider is contracted to do this work and Procurement places the order for it.
What exactly is Procurement’s role?
Procurement’s role is extremely important as all purchases are combined where possible in order to get the best terms and conditions, for example. All orders placed within Deutsche Telekom must be processed by Procurement. The Procurement unit then contacts the company, negotiates the prices, and approves the purchasing order. So, what you need as Procurement employee is not only the social skills to interact with external companies but also a certain talent for negotiation. Once the price has been fixed, it is sent to the relevant contracting party via a business software program from SAP. Using the software is a good way to familiarize yourself with the order system and processes. These have already been automated to a large extent, but some things require manual input and attention. Some technical background knowledge is definitely an advantage here. If questions arise, for example regarding delivery details, Procurement is the interface between customer and contractor.
Digitalization in Procurement
Anyone who still thinks procurement is not up to date should think again. Here, just as in other business areas, there are many projects and topics that are part of the move towards digitalization and automation. And it is “FEAs” (Front-End-Assistants) that play a key role. To put it simply, there are bots that simulate and automatically perform the actions and clicks of a user. As their digital helper is doing it for them, Procurement staff no longer have to write standard emails or carry out repetitive steps in the order process, and so their workload is lessened. Negotiation is another area where we are seeing innovations. Take for example our chatbot “Nelson.” It’s role is to support Procurement’s internal processes and negotiate with suppliers. All procurement employees benefit from these bots as they save them a huge amount of time. What is more, Nelson is hard at work at any time of day or night – and even on weekends. And these are just a few examples. Automation is a permanent topic on Procurement’s agenda and drives its continuous improvement.
With more than 1.5 years of procurement experience under my belt, I can say that it is really fascinating to work in this field. Apart from its varied range of day-to-day activities, it was the digitalization projects which I found particularly captivating and which made a lasting impression on me. Although it can take some time to get the hang of systems like SAP it is well worth the effort. I had a brilliant time in Procurement and worked with many nice people. Now I look forward to going back after my next academic semester.