Telkom is in the final phases of implementing a national, enterprise-wide e-procurement initiative that will incorporate a number of contract suppliers. The initiative is centred on software from iPlanet (formerly Sun-Netscape), supplied and installed by JSE-listed CCH.
Telkom is among South Africa`s largest buyers of goods and services, it has 48 500 employees and process 245 000 orders. Streamlining the procurement process will have manifold benefits for the telecommunications giant, including dramatic time savings, improved business processes and enhanced and accelerated delivery of ordered goods.
Telkom expects to eliminate at least half of the steps involved in the procurement process for standard contract items, and to slash order processing time from five days to five minutes.
"Telkom`s vision as endorsed by the procurement executive group 15 months ago was to streamline the procurement process through providing end-to-end e-procurement services; to accelerate Telkom into e-business; and to empower our formerly disadvantaged suppliers," says Natie Venter, senior manager R&D procurement services systems at Telkom. "We came up with an e-commerce strategy for procurement services, a business case and a benefit analysis. We took our requirements to market and CCH won the business based on its flexibility and ability to tie in with our overall vision."
Key for Telkom was not to be locked into a specific e-procurement- or e-business model. It needed open-ended options, specifically in three areas: a marketplace scenario, supplier-hosted catalogues, and buyer-hosted catalogues.
"iPlanet caters for all of these," says Alwyn Kruger: manager, research e-commerce procurement services at Telkom. "This early on we couldn`t decide which model would be the clear e-business leader, and iPlanet`s and CCH`s flexibility gave us the ability to support multiple or hybrid models."
Telkom`s order processing is executed through a formal process supported by structured business rules. This entire process has been mapped to the new e-procurement system, which will act as a one-stop shop for all internal customers.
"Whether an employee is requesting from stock or from a supplier, we will have one channel for communication. After a request is initiated, the system will determine what steps to follow and create a funnel where all procurement can be driven through a consistent process.
"Our buyers should be applying best practices in sourcing, buying and order management, not just recapturing data," says Venter. Telkom will start off with a buyer-hosted e-procurement model, and evaluate it on a supplier basis, due to the flexibility and the open-endedness of the iPlanet solution.
A fundamental aspect of the overall e-procurement initiative is the role Telkom, as a leading buyer, could play in enabling grassroots black empowerment. "Few SMEs are able to play in the e-marketplace," says Kruger. The solution we have chosen gives us the flexibility to have our suppliers e-enabled to varying degrees."
The iPlanet solution draws data from and feeds it into Telkom`s Walker enterprise financial system. The overall integration has been complex, because of the company`s huge data volumes. In addition, there were the teething problems associated with new software, and integration challenges with the back-end. But most of these have been resolved, and Telkom is set to go live with initial rollout to administrative staff.
"Our supplier adoption program will start off by reviewing our existing supplier contracts against the suitability criteria for e-procurement", notes Kruger.
iPlanet has been deployed against Oracle on highly scalable Sun 4500 servers, supplied by CCH Enterprise Solutions.
"There are many sceptics when it comes to e-business," says Andrew Procter, executive of CCH Hosted Services. "But e-procurement is one of the foundational building blocks to make e-business work, and Telkom`s clout and market reach will be a key enabler in the long-term success of e-business in South Africa."
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