Best Practices in Bulgaria & Globally
Bjorn Rakkenes, Sourcing & Logistics Director
Telenor Bulgaria
Telenor Bulgaria
Transparent & Sustainable Sourcing
2
What bad looks like…
Single Decision Maker & Signature
Sourcing Based on «Etnisity»
• I will to
only
buy from
friends, from
company
X, from
Leads
reduced
competition.
Vendors
outside
the «circle» are
«Romania»,
etc.
not motivated to compete
Weak Policy & no Independent
Controls
May
lead to business
business,
• Independent
control in
is the
a key
hygienerepeated
factor fortransactions
any policy, up
even a weak onetowards approval limit, etc
Undocumented Process & Closed
Decision Loops
3
A single
can do level
massive
damage
• Combined
with person
high authority
it can
lead towhen
significant
loss
no question is asked
• Nobody
knows how
a decision
was
Scoring
is done
Documentation
fixed
in arrears
to made.
fit «friendly»
vendors.
ad-hoc
Decisions made in private
How Do We Tackle This?
Transparency & Top Management Involvement
Low
Amounts
Medium
Amounts
High
Amounts
Manager-level
+ Sourcing
Director
«Just Buy»
Tri-party Memo
for Approval*
Director-level
+ Sourcing
Director
Full Sourcing
Process
Tri-party Memo
for Approval*
C-level +
Sourcing
Director
Full Sourcing
Process
Vendor Selection
Committee
Approval*
*Any Deviation from Policy means that a Competition Waiver is filled in
4
What is the Vendor Selection Committee?
Consists of 4 x C-Level + Sourcing Director, meeting weekly
Phase 1
Focus on:
• Relevant vendors invited to RFQ
• Technical specification locked
• Scoring model fit for purpose
• Requirements locked
Phase 2
Focus on:
• Disqualified vendors. Why?
• Scoring model applied correctly?
• Awarded vendor fit for purpose?
• Final Award is made here
The single Sourcing Professional and the Process is in charge
5
A Key Principle in Telenor is that the “Commercial Lead”
is 100% in charge of the process
Input to the process cannot be submitted to anyone else, not even to the CEO
Request for Offer (RFO) – Timeline of an actual case
Management
Receive
Last Offer
19:00
VSC
Phase I
12.11.2015
RFO Sent to
Vendors
13.11.2015
First offer
Deadline
23.11.2015
EoB
Second offer
Deadline
25.11.2015
13:00
Management
Sees &
Understands
Last Offer
30.11.2015
VSC
Phase II
26.11.2015
In this case the vendor lost the tender, despite presenting the best commercial offer
Reason: Not respecting the communication channels and deadlines set
6
Key Principle in Telenor Bulgaria is that Vendor
Complaints on the Sourcing Process is Taken Seriously
Any vendor can complain on a process, has happened 5 times in 2 years
Sourcing Expert,
Vendor + Director.
Disclosure of
actual Prices +
Message
Sourcing Expert,
Vendor +
Director.
Disclosure of
actual prices
Case X
Vendor A
complains
on not being
awarded
Meeting
Vendor Never
Responds or
Challenges the
Explanation
Given by us
Case Y
Vendor A
Complains
again
Meet
again
Vendor Pulls
Complaint
Complaining is fine but it has to have substance
Repeated complains without substance are not tolerated
7
Back to the Bad – How Telenor Bulgaria Tackles it
8
Single Decision Maker & Signature
•All
Combined
with3high
authority
it can2lead
to significant
Memo’s has
Approvals,
alllevel
contracts
signatures,
Vendor
loss
Selection decision for major cases
Sourcing based on «etnisity»
LOVE
vendors,
we shop
from the cheapest
•We
I will
only new
buy from
friends,
from company
X, from qualifying
«Romania», etc. vendors from anywhere
Weak Policy & no independent
controls
Strong Policy,
Strong
and External
Audit
• Independent
control
is aInternal
key hygiene
factor for
anycontrol,
policy,
even a weak
one
supported by a strong Authority Matrix
Undocumented Process & Closed
Decision Loops
Clear Process, Clear Limits, Sourcing cannot commit for
• Nobody knows how a decision was made. Scoring is done
anything without a stakeholder and No person or role can
ad-hoc
commit without Sourcing
What Else Do We Do To Ensure Control?
Zero
Tollerance for
Frand &
Corruption
Company
Ownership
Register
«Wine and
Dine Rules»
Gift Register
& Rules
Vendor
Lotteries Not
Allowed
Vendor Right
to Complain
Biassed
Behavior is
Frowned
Upon
9
Constantly
trying to
Increase
Sourcing
Control
Ensure
Build
Good
Competition
Vendors
Why Do We Take Sourcing so Serious?
Mismanaged
Managed
Secure
Stable
Deliveries
10
2012
2013
2014
2015
2016
Sustainable
Business
Sustainability is everything we do
Strong CrossFunctional
Inspection Regime
Agreement of
Responsible
Business Conduct
Vendors Need to
Follow Bulgarian
Law
Vendors Need to
Make Money
11
On Top of This Telenor Globally Does Several Other Things
to Further Improve Sourcing
Strong
Central
Policy Team
Support in
Critical
Activities
Global and
Regional
Projects
Analytical
Support
Manage
Global
Agreements
& Vendors
12
Central
Team
Coordination
of Sourcing
Activities
Yesterday the Global Ethics and Compliance Hotline was
Put In Operation
It is new in a few crucial ways:
• It is a global hotline, common to all our business units
• The report intake is operated by an external professional vendor
The Ethics and Compliance hotline remains a confidential channel where
any employee can ask questions and raise concerns about possible
breaches of Telenor's Code of Conduct, including relevant laws,
regulations and governing documents
We all have a personal responsibility to act with integrity and speak up if
we become aware of potential breaches. Leaders have a particular
responsibility to act as good role models and to build a safe, trustful and
transparent culture in our winning team
13
Questions?
14
Thank You!
15