CASE STUDY / KPN
ENGAGEMENT
to be working with smaller organisations, more frequently, and we need to build a relationship that allows us to work with those smaller parties on innovation because that’s where a lot of the smart stuff will come from.” KPN currently juggles maintaining partners of very long standing, such as its 125-year relationship with Ericsson, as well as linking up with emerging tech companies that could provide for future needs. A division has been set up specifically to ‘prospect’ for these new suppliers. “The Dutch marketplace is attractive to many organisations because we’re considered a very good test ground for a number of demographically similar countries,” says Baker. “And last year, we were the most recognised brand in the Netherlands, so that cachet gives us an enormous amount of very attractive opportunities.” There’s a huge amount of innovation happening in the Netherlands too, she says. “For example, a spin off that’s just come out of Eindhoven University with Philips is very active, and ASML, another technological giant out here, is very active too. The KPN brand here in the Netherlands also gives us the chance to work in a very collaborative way with some very smart two or three- person companies before they become sufficiently large to attract the likes of Amazon, Apple, Google, Facebook and Microsoft.”
Baker joined KPN three years ago to help the business address this challenge. She brought with her a vast wealth of experience particularly in technology procurement and pedigree from previous roles at companies including SABMiller, Rio Tinto and Adidas. The way she sees it, since a considerable proportion of KPN’s costs are with its suppliers, that’s where they might expect to find most of the opportunities, and her team has been restructured to assist in mining for these. “The lion’s share of our organisation is technology, so we work with some of the bigger names in the business, the Ciscos, Googles, Oracles and Microsofts. In addition, we need
Fundamentally, the people who do the work are the differentiators as to whether you end up with a relationship or not, and the people part is absolutely the most difficult.
Relationships are the route to innovation
Interview with Michelle Baker
The 140-year-old telecoms company is used to change and now it is transforming again to find the suppliers of tomorrow.
W orking in a telecommunications business, CPO Michelle Baker and her team have to develop relationships with everyone from worldwide tech giants to two-person start ups. To understand how and where they dedicate their efforts, they divide their direct supply base into three tranches – tech suppliers, labour suppliers, and the suppliers of tomorrow. “It’s about segmenting your providers into the ones that make a difference, and importantly for us, the ones that will make a difference in future.” And when it comes to technology, that means identifying who you may need or want to work with in anything from three to 10 years’ time. Dutch telecoms company KPN has been through much change over its 140-year history. In the past 25 alone it has, like many telcos, transitioned from being a state-owned company to being sold off and publicly listed. Next it witnessed the introduction of the internet, invention of the smartphone, rise of China and more recently, the shift to providing infrastructure to support a wider network. “In the past decade we’ve seen the arrival of ‘over the top players’ such as Apple TV, Netflix and Amazon Prime, who are using our bandwidth to delight you the consumer with cheap as chips entertainment. And your demand of us is bigger bandwidth and smaller phone and internet bills. Wherever you are in the world, all telcos are in pretty much the same boat. It’s an industry in flux. One that is asking itself ‘do we grow up to become a utility business or a digital company?’ That’s the existential question every telco has been asking themselves for the past 10 to 15 years and we are no different.”
Procurement’s evolution
To make the most of these potential and pre-existing relationships, Baker restructured her 70-strong department. Its makeup now includes a team of around 25 dedicated to strategic sourcing, while another 25 concentrate on her version of SRM: ‘strategic relationship management’. It is part of a transformation effort that has been underway since not long after she joined. Her first move to bolster SRM at KPN was to get the right people on the journey with her, with tools and processes to follow. “We’ve flipped the typical transformation process,” she says, “we’re now in year three and we’re putting tool selection
Image right: The Digital Dutch goes Digital event: Presenter Jim Stolze (middle) interviews KPN CEO Joost Farwerck and Marieke Snoep, Chief of the Business Market at KPN.
36 STATE OF FLUX
2020 GLOBAL SRM RESEARCH REPORT
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