Telecommunications giant expands e-procurement

By William Atkinson -- Purchasing, 9/21/2000

AT & T, the $60 billion telecommunications and cable giant, has been dabbling in e-procurement for a period of time and is now in process of upgrading and expanding its initiative. "Parts of our company already have experience with e-catalogs and Web ordering," explains Debra Bell, chief procurement officer for AT & T's Supplier Management Division in Basking Ridge, N.J.

The ultimate goal is to implement an end-to-end "e-enabled" process that will cover all of the company's buys, which include indirect goods (office supplies, MRO, etc.) as well as direct goods (system components, such as network switches and routers).

"Major reasons for expanding our e-procurement activities are to reduce costs and streamline our processes," adds Bell. "We will also be able to enhance the leveraging of our procurement volume by capturing more systematically our procurement activities throughout the company."

System development

AT & T decided early on that it did not want or need a proprietary system. "There are excellent market-driven products already available," she explains. "That made building our own system unnecessary." Currently, the company is in process of selecting a software provider.

Bell delineates the most important features the provider must offer: robust functionality, the ability to meet AT & T's business needs, speed and ease of deployment, ease of use by employees, and compatibility with the company's existing systems, which include an Oracle ERP system. "We believe that finding a system compatible with our existing systems will be our biggest challenge," she admits.

What will not be difficult is selling the system to users. "This is a fairly compelling business proposition," Bell explains. When the supply management organization began investigating opportunities for e-procurement, it spent a lot of time making sure it identified all the business needs of users and ensuring that those needs would be addressed in a final solution. "In addition, since parts of our company already have experience with Web-ordering and e-catalogs, we have been able to build on this experience in fine-tuning our needs for an even better solution," she adds.

Bell does not anticipate any security problems, since the system will be designed in line with the company's traditional security measures for other systems and processes. "We will have the appropriate checks and balances, including electronic approval routing, the use of preferred suppliers, and so on," she notes.

Anticipated benefits

"The system will more fully empower our associates to place orders directly against our existing national contracts via a Web-enabled process, instead of having to go through the procurement process," says Bell. This not only saves time for the users, but it frees up buyers for higher-value, more strategic activities. "As the system is introduced, we will migrate buyers who have these transaction-based positions to more strategic positions," she adds.

Preliminary results from the company's existing pockets of e-procurement have shown streamlined ordering and the ability to channel users to the company's preferred suppliers. "This has saved us money already," notes Bell.

She offers a recommendation: "Take the time to do your homework. It is worth the time to conduct the hard assessments up front so you get what you need."