BT buys a vast range of products and services and has a huge number of relationships with different types of organisations.
‘The key to our strategy is segmentation,’ says Claire Garrett, vice president of procurement policy and systems team at BT. ‘We don’t take a one-size-fits-all approach.’
BT has collaborative relationships with some of its long-term suppliers, especially where there are joint developments in place. But with a number of other suppliers the company takes an approach that Garrett calls ‘benign neglect.’
‘The right thing to do is not to speak to that supplier from one end of the year to the next,’ she says. ‘And the right thing for that supplier to do is not speak to BT from one end of the year to the next. If the contracts work and the performance measures work, then we don’t need to meet on a monthly basis to talk about things that are working.’
Garrett has not seen a particular shift towards more collaborative relationships over recent years.
‘Collaborative relationships with suppliers have always been there,’ she says. ‘But I think to some degree we’re getting cleverer about which ones they need to be and what it is we want to achieve from them.’
The key to BT’s procurement approach is to be clever with how the supplier base is managed; not everyone is treated in the same way.
‘An organisation of BT’s size would need an army of buyers if we treated them all the same,’ says Garrett. ‘It’s about having very clever models so that we’re not increasing the risk by different types of relationships, but ensuring that we get the maximum impact and benefit from the right types of relationships.’
Garrett is no fan of the mantra that every supplier needs to be a partner. ‘Every supplier does not need to be a partner, but you must be clear about which ones are, why they are, and what it is you’re trying to mutually achieve from the relationship,’ she says.
In big organisations, such as BT, suppliers form many relationships with procurement teams right across the business.
‘And that’s absolutely right, because you can’t funnel all of that communication through one individual,’ says Garrett. ‘But those people need to understand the totality of what that relationship is.’
If your company is not joined up, you may end up with different deals in different parts of the organisation, or you may end up with different go-to-market strategies. There is also the risk that, if you are not clear about your strategy, you stand exposed to being divided and ruled by suppliers.
‘My number one tip to CIOs is to get your own company lined up before you talk to a supplier,’ says Garrett.
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