1.Taking Control of the Purse Strings – According to Mckinsey, revenue and cash flows have dropped by an average of 6 percent a year since 2010 for the largest 250 telecom providers around the world. From 2005 to 2015, telecom organisation Sprint had been losing customers and staff, burning cash and watching its margins dwindle. CPO Mariano Legaz, joined the company in 2016 and has been instrumental in its transformation. He took control of spending and brought in a new regime to ensure that costs were managed on a project basis and that savings were rigorously measured. Procurement needs to be working with stakeholders to drive down costs, on a project by project basis.
2. Accept that you are living with disruption on a daily basis – Beyonce’s two-hour performance, last weekend at Coachella — dubbed “Beychella” by fans — was streamed simultaneously by 458,000 viewers on YouTube worldwide.This year was Coachella’s biggest yet on YouTube, with more than 43.1 million views and streams from 232 countries. The Coachella live stream was also the most-viewed live festival ever for the video platform. What does this have to do with telecom? How many were streaming from their mobile phones? OTT content is driving consumer decisions around mobile. The way we do everything from experiencing music festivals around the world, to tracking our health is changing.
3. Have a Go Fast or Go Home mentality – Gartner forecasts that 20.4 billion connected things will be in use worldwide by 2020. The priority for most telecom providers is to gear up for 5G – the superfast wireless network and is said to be the fabric that will truly enable the Internet of Things (IoT). For Telecoms providers this is one of those “go fast, or go home” moments. According to Deloitte, there will be a fourfold increase in mobile data traffic in the United States alone between 2016 and 2021. Relationships with key suppliers need to be strong and collaborative and new relationships, global relationships need to be part of the long term planning for telecom providers. Procurement needs to be part of the teams driving innovation in order to stay ahead of the competition and in order to future proof their organisation
4.Mergers and Acquisitions are hard, but not impossible – In 2016, Telecoms spent $224 Billion on M&A, this is going to continue. Procurement groups within telecom companies have to step up. When Softbank aquired Sprint, the latter continued to struggle and lay off employees, despite billions of dollars of investment. Sprint was losing customers at a rate of 2% a month. Fortunately Sprint has shown it can defy the odds and has managed a spectacular turnaround, this has been achieved by cost reduction, tighter management and in part by having a strong and strategically minded, and pretty modest CPO, in Mariano Legaz..
5. Stand up and be counted – even CPOs can be heroes! – Let’s be clear, Telecom is going through turbulant and exciting times and every organisation needs visionaries and the quiet heroes who dot the ‘i’s and cross the ‘t’s. Future Procurement Leaders need to be both – sticklers for process excellence, data and analytics, in order to make smarter decisions, and then they need to put on their capes and join the superheroes of innovation in the boardroom driving the strategy of their organisations.