achieving true optimization of spend › 2013 › pres › public › ... · 2013-09-19 ·...

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e - AuctioningAchieving True Optimization of Spend

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Profile

• Mike Midgley (Telkom Executive, Direct Spend)• Mike joined Telkom in 1974 as an student

engineer and progressed through the engineering division to General Manager of the mechanical engineering division. He transferred to Procurement in 1995 where he is still at present. He has experience in end-to-end supply chain, project design and implementation and was involved in the implementation of the 1st full scale fleet card in SA. Mike holds a BSc Engineering (University of Natal) and B Com Honours (UNISA).


We have a unique, unrivalled fixed line network

Largest footprint in SA

› 80% of total fibre –

over 147,000 km

• Network upgrade

funded through cash

from operations

• Upgrade will yield

speeds of up to

40Mbps and reduced

fault rates

• Enable true converged

offering

• Commercially-led

national broadband

rollout


Telkom plays a mission critical role in South Africa

• Linking Africa to the world

› Submarine cables

› Terrestrial fibre connecting SADC countries

› Global VPN spans 70 countries & 700 cities

› 3 major satellite service stations

• Reliably transmitting mega data at high speeds

• Lifeblood to South Africa’s banking sector

• Playing a vital role in the success of major events,

• FIFA World Cup and 2013 AFCON

• State of the art National Network Operations Centre (NNOC)

• Leading provider of communications solutions

to South Africa’s corporate’s


Supplier Relationship Management (SRM)Contract Management

� Contract Authoring� Template & Clause Library� Contract Repository� Contract Distribution, Usage,

Renewal� Contract Performance &

Compliance

� Supplier Collaboration� Supplier Segmentation &

Development� Supplier Performance

Management� Supplier Retirement

Supplier Management

Analytics

� Spend Data Aggregation� Data Cleansing & Enrichment� Spend Analytics & Reporting� Fraud Detection

Strategic Sourcing

� Supplier Qualification� Project Management� Demand Aggregation� Optimization, Pricing� RFx, Auctions, � Supplier Performance � Management

� Catalog & Content Management� Source-of-Supply Determination� Order Management� Plan Driven Procurement� Self-Service Procurement� Services Procurement

Operational Procurement

Supplier Collaboration

� Supplier Onboarding� Supplier Enablement� Document Exchange

Finance

Excellence inProcure to Pay

Extensive Source to Contract

Optimize Contract Value

Comprehensive Spend

Visibility ProcurementFinance




Comprehensive Spend

Visibility ProcurementFinance




Comprehensive Spend

Visibility Procurement


E Auction Process

Key Principles

• Auction Events are run by a dedicated Core Team with participation from the Commodity Lead and Internal Audit

• Can be used for any type of Purchasing products (Reverse) or disposal transactions (Forward)

• At least 2 Bidders are required up to a maximum of 10 Bidders• Pre-qualification (meeting the specified Criteria) is required to have access to

the Auction Event• Prior to the start of the Auction Event Pre- qualified Bidders need to accept a

Protocol document (Final Protocol Electronic and exhange scrap 20130425docx.pdf) which spells out the rules of the Auction.

• Prior to the actual start of the Auction, the Bidders will have the opportunity to pre-view their initial bid/s

• Increments / decrements (Value or Percentage) is predetermined by the core team and only become visible to the Bidders in the bidding phase.


E RFX Process

Key Steps

• RFx is published on the Telkom Corporate web page• Potential Suppliers interested to participate in the RFx need to

register to have access to the RFx• Registration is done electronically and a Username and Password

will be given on registration.• Once registered Suppliers will have access to the RFx and are

now in a position to submit their response• During the preparation of submitting their response, Suppliers can

communicate electronically and direct with the Bid manager via a “chat box” or “discussion box”

• Bids are evaluated electronically after closing time• Pre-qualified Bidders are then eligible to participate in the e-

Auction process


E RFX Process (Continued)

• Auction event is administered by the Auction Administrator, and has full control of the event (stop/resume, chat, change increment/decrements, etc.)

• Proxy bidding is used for forward auction, where all bidders can see the leading bid value

• Open Bidding: Bidders see their ranking only. This is most commonly used for reverse auctions, meaning that Bidders must meet or exceed their own most recent Bid, but do not have to beat the leading Bid.

• Once the Bidding phase opened the bidders will have full visibility of their Ranking based on the following pre-determined setting by the core team

– Bidders cannot see any ranking information of other Bids– Bidders can see the ranking of their Bids compared to other bids. For example, a

Bidder might be ranked third or third out of four in the Auction

• Winning Bidder of the Auction Event will be notified by the Bid Manager


e - Auction Simulation

E Auction Open and Closing Time.docx


In Closing

� My presentation has demonstrated how Telkom addresses the business need to achieve optimal pricing on all we source and all we dispose of.

� Savings on reverse auctions average about 5% since they were started earlier this year. Only a limited number (6) of reverse auctions have been run but this number is expected to improve over the remainder of this year.

� Improved income on forward auctions (electronic scrap sales) averaged 81% since they were started. Twenty two(22) auctions events comprising of Hundred and sixty (160) auctions were conducted to date.

� This e - Auction tool enables Telkom to optimise spend on our Next Generation Network Infrastructure Program which in turn contribute to the Economic Growth National Strategic objective


e - Auction Simulation

Auction.wmv


Thank You

Achieving True Optimization of Spend

Thank You!

[email protected]

081 389 7184

achieving true optimization of spend › 2013 › pres › public › ... · 2013-09-19 ·...

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