Sorry, it has been a while since we’ve delivered the CPO News, so let’s get to our top stories for and about Chief Procurement Officers.
New Chief Procurement Officer for Telkom (CEO Expounds on Importance of Procurement)
Telkom, Africa’s largest integrated communications company, has appointed Ian Russell as its new Chief Procurement Officer as it continues to build a “top leadership team” to lead its turnaround strategy. The appointment follows the recent placement of other executives at the Telco and will be effective from 1 February 2014.
Russell joins Telkom from South African Breweries where he was the Head of Procurement. Prior to that he held senior positions in Barclays and ABSA, among others, as chief procurement officer.
Telkom CEO Sipho Maseko highlighted Russell’s appointment as emphasis on the importance of having “the right person in the right place doing the right thing. For Telkom, procurement is a transformative tool that can stimulate economic and social development in a broad context. [emphasis added] I am confident that Ian’s vast experience in his field of expertise will help us drive cost transformation as we rebase our third-party spend through consolidation and disciplined vendor control and management. Ian will be tasked with the development of more efficient supply chain options that enable us to relentlessly drive down our costs. He will further drive Telkom’s property portfolio optimization by freeing up some of the capital and reining in the maintenance costs of these assets.” CEO Maseko said in the statement announcing Russell’s hiring.
In an email circulated to all employees Maseko also said “Our organisational goals, from the ongoing drive to enhance efficiencies to the building of an invincible network and the pursuit of profitability, are highly dependent on the Procurement function. I think it is fair to say that the way we manage and steer procurement can, and will, play a decisive role in our future business success.” [emphasis added]
Russell holds a BSc (Hons) in economics and an MBA in strategic procurement. He is a fellow of the Chartered Institute of Purchasing & Supply.
UK Government Abandons Plan to Outsource Military Procurement
The UK Government plans to recruit a private consortium to buy military equipment will be abandoned after all but one of the external bidders pulled out. The Ministry of Defence hoped to outsource the procurement of equipment to a private organization under a government-owned, contractor-operated arrangement. UK Defense Secretary, Philip Hammond, is now examining other options – which could still involve the private sector despite the failure of the current bid process.
Hammond said he would examine “whether it is in the public interest to proceed with only a single commercial bidder and an internal option, or whether alternative approaches should be considered”. The compromise plans include streamlining procurement teams and greatly increasing the pay and bonuses available to successful civil servants within the department to compete with the private sector. Said one unnamed insider “It is clear that the status quo is not acceptable and reform is needed to bring in private sector skills and experience.”
Australian State Procurement Seen as Laggard
An audit of the procurement operations for Queensland (a state in Australia) found that its departments lack the skills, governance and systems needed to ensure they are receiving the best value for money with procurement arrangements, a new report by the state’s auditor-general has found. The Queensland Audit Office studied 62 contracts from three major departments and the numerous agencies contained within, to determine whether Queensland’s annual procurement spend of $10.9 billion was being well spent. While it found gaps in necessary skills and governance, it also discovered a state-wide contract management system, implemented almost two years ago, was only being used by a minimal number of agencies.
Given the above, my question to our readers: What would an audit of your sourcing/contract/procurement systems find?
Accenture Completes Acquisition of Procurian
From last week’s press release announcing the deal closing:
“Accenture (NYSE: ACN) has completed its acquisition of Procurian, a leading provider of procurement business process solutions. The acquisition, originally announced on Oct. 3, 2013, further enhances Accenture’s capabilities in procurement business process outsourcing (BPO) across a range of industries including manufacturing, consumer goods, high-tech and financial services, and adds key analytics capabilities and technology assets. Through the acquisition, Procurian’s approximately 780 employees in the United States, United Kingdom, Czech Republic, India, China and Brazil have joined Accenture.”
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