Telecom
Transforming Business Performance  

Situation

Solution

The profits of QP Group’s international client, a large multi-national telecom provider, were under intense pressure. As a result of deregulation in the industry, competitors were deploying newer technologies and challenging traditional regulatory pricing models. To continue operating in this challenging environment, our client needed to transform itself into an entrepreneurial, profit-driven enterprise.

QP Group’s client wanted to impact savings by:

• Effectively managing supplier relationships

• Adopting a clearly defined category management process for all of its procurement professionals

• Reducing operating expenses

• Optimizing logistical operations

• Reducing head count to the proper size for its business

The overall spend, approximately $500 million, was fragmented across common suppliers in many cases and minimally leveraged across the region.

Contributing to our client’s challenge was the fact that 40% of the employees in procurement roles were not formally part of the supply chain organization; they had little training in purchasing or category management skills. These individuals controlled 70% of the company’s spending.

With the support of QP Group the client launched an initiative spanning 16 countries across Central America and the Caribbean. QP Group provided the tools, project management and coaching that enabled our client’s cross-functional, cross-national teams to develop value drivers that could catalyze change. These teams also developed business requirements that would provide the framework for our client’s new organizational design.

Jointly, we established an agreed set of value drivers for both the initiative and the proposed organizational structure. The value drivers were sustained cost reduction, rigorous category management, regional integration, lower supply chain operating expenses, increased purchasing scope, rapid implementation, management by facts and data, increased service levels, reduced inventory and improved quality.

Benefits

Our client’s transformation was sustainable, delivering both tangible and non-tangible benefits across the entire company and throughout their new, world-class procurement organization. The benefits included:

• Hard savings of $80 million (16%) within two years in reduced operating costs

• Improved service levels and customer focus across the organization

• Eliminating redundant approval steps

• Reducing time and effort spent expediting orders

• A virtual, centralized organization attuned to industry dynamics

• Reduced cycle times

• Upgraded employees’ skill sets and tools

• Identified opportunities for additional savings and continuous improvement

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