When a business knows that major change is required, it needs a very steady, experienced hand on the tiller to guide it in the right direction. Ooredoo Algeria, a multi-national telecommunications company, hadn’t been keeping up with its sister companies; it was losing revenue while increasing expenses, prior to 2017. It needed help.
Enter: Saber Chrigui, CPO of Ooredoo Algeria. Chrigui has been part of the Ooredoo team since 2004, and has continued to climb the ladder through a variety of personnel changes, thanks to his background and skills. In 2017, he took over procurement at the Algeria branch, and was tasked with a serious improvement mandate.
“We needed to optimise costs, improve governance, and implement the group-negotiated contracts for the Algeria branch,” he explains. “The mandate also consisted of elevating the procurement and supply chain function within the organisation, and give it the same level of importance that was given to strategic sourcing.” He needed to prove that procurement adds enormous value to a business, and reposition it to reflect that. Additionally, a serious issue at Ooredoo Algeria was that too many people were reporting to too many other people, and there were seriously archaic practices in place – it had to be streamlined and made paperless.
The process
Chrigui’s team approached this transformation in phases, knowing what a mammoth task it was going to be. It was split into three segments, the last of which is currently being implemented. “The transformation of the procurement and supply chain functions started with wave 1.0, where we set the basis for the governance and processes, in addition to implementing the group-negotiated contracts in Ooredoo Algeria, mainly for the network and IT categories,” Chrigui explains.
“Wave 2.0 was more focused on the marketing and media spend. The third wave is focusing on the refresh of the governance bodies and policies, after getting our updated procurement policy approved by the board to better suit our business requirements. We worked on shifting the organisation’s focus from price to cost, we renegotiated the existing OpEx/CapEx contracts and migrated them to local currency wherever relevant, we’re implementing new digital solutions adopted at the group level, modernising the warehouses, and improving the custom clearance activities.”
A huge undertaking, and one which worked hand-in-hand with new technologies in order to be successful. The tendering process was modernised, alongside supplier relationship management and contract management. Ooredoo Algeria started using the Ariba solution from SAP, before migrating to Ivalua.
But what about the day-to-day running of Ooredoo Algeria? Surely the business can’t grind to a halt while large-scale change is happening. This is where Chrigui’s skills as a leader come in. “I convinced management that we would officially be compliant to the existing policy – however, I proposed that we follow a more stringent governance for certain decision-making by implementing more rigorous control on spend approvals and tendering process,” he explains. Essentially, the business had to work smarter in order to allow the changes to take place while business resumed.
Procurement as a business function
“I also worked in a collaborative way with the internal stakeholders to share clearer requirements and be more open to new ways of doing things, and to new suppliers while assessing operational disruption risks. Additionally, I worked on promoting the advantages of leveraging the competition, both on the business requirements as well as on budget savings.” Chrigui united the Ooredoo team, the stakeholders, and the suppliers to ensure smooth sailing across the board – and it worked. The positioning of procurement has been elevated and streamlined in equal measure, creating widespread benefits for Ooredoo Algeria thanks to procurement now being seen as a vital business function.
Procurement’s positioning and smooth operating was something that was already impressive at the group level, and Chrigui had the experience and skill to apply that to Algeria’s branch. “I built on the group level’s positioning, as I was coming from the group strategic sourcing,” Chrigui explains. “So I had the trust of the organisation thanks to what was done at group level, helping me to convince the local stakeholders to adhere to the new positioning of the procurement organisation within the company.
“With regards to the benefits of highlighting procurement’s importance as a business function, I have personally seen that the procurement KPIs became very coherent within the company’s financial KPIs, therefore none will see procurement as a challenger or stopper to business – rather, a contributor or facilitator.”
Spend rationalisation
Indeed, some serious savings have been achieved thanks to the transformation of procurement, driving home its importance as a function. Major savings were made in network, IT, marketing, corporate services, and general services departments of the business, and a spend rationalisation programme was put in place.
“The programme was driven by first implementing a new categories taxonomy – which was also implemented at group level – collecting the historic spend data and trend of consumption across different categories,” says Chrigui. “The data collected was very useful to set the right spend thresholds and the decision rights matrix for the suppliers awarding and purchase approval within the organisation.” This has reinforced the governance control and help optimise spend leakages for Ooredoo Algeria.
“In addition, the refreshed procurement policies and processes have led to a more cost-conscious way of working across the different departments, by setting clear, cross-functional targets around cost optimisation and budget planning. The digital tendering process and tools have also contributed to the success of the War on Waste programme (more on that soon) by using reverse auctions – electronic tendering that has improved the trust of the suppliers and led to more audit proof and transparent awarding processes. The local implementation of the group-negotiated contracts for the centralised categories gave us better pricing levels and reinforced our bargaining powers, both for prices and terms and conditions. It’s also important to mention that reinforcing the team by hiring subject matter experts has helped achieve great results in the War on Waste programme.”
The war on waste
And what exactly is the War on Waste programme? The idea behind that was to find where waste was occurring in high-cost categories, like network and IT, as well as in indirect categories, and eliminate that waste through smart improvements.
Chrigui explains: “The programme started by setting a stringent governance body for the tenders approval, and for important spend businesses cases where we needed to justify the requirements. In addition, we refreshed our supplier list and looked for regional and local suppliers to avoid spending on hard currency. We have led an aggressive control on cutting out ‘middle man’ suppliers. The War on Waste programme has also been driven based upon analytical data-driven decisions using digital tools for the tendering and contracting process.”
Focusing on and supporting local businesses is a point of pride for Ooredoo Algeria, as is the wide-spread procurement improvements and the connected relationship between procurement and logistics. Once fractured, they now sit side-by-side, as they should, and work together. “After the merging of the procurement and logistics departments, I had more control on the end-to-end cost and
time-to-market for our projects,” says Chrigui.
“In addition to that control on the spend, we became more efficient by placing orders only after checking inventory. In many cases, the request to proceed with an order was raised from the logistics department to the end-user forgetting to manage their stock. From the contract management side, we became more efficient managing the delays or penalties with the suppliers.”
Company culture
A major transformation such as this can only work – especially while the business continues to operate as normal at the same time – if the team works well together. Company culture is vitally important at Ooredoo Algeria, and a successful procurement transformation starts with an effective procurement leader. For Chrigui, this means having a customer-centric mindset and an agile way of working – something that trickles down and spreads to create a focused team.
Focusing on the customer has enabled Ooredoo Algeria to drive its business around customer requirements and attract them to stick around even in the face of fierce competition. To really hone in on this mindset, the company invests in its leaders through the Braveheart programme. “The Braveheart programme has led to improving ownership on our projects and commitments over time, and encourages us to focus on the customers rather than on individual targets or achievements,” says Chrigui. “the more procurement is elevated within the organisation, the closer they will be to the business and the better their understanding.” Rewarding a focus on the customer creates smart leadership improvements, which influences the entire business, in turn, and solidifies that customer trust.
Ooredoo Algeria leading the way
In the last few years of this ambitious transformation taking place, Ooredoo Algeria really has become one of the best procurement models across the entire group – a shining beacon for its sister companies. Gone is the old procurement mindset of it being merely a back-office function – “it’s now a key driver in the business,” Chrigui says.
“The complexity of the local market, starting from the high number of legacy suppliers of suppliers compared to our sister companies lower number in network and IT, is part of what makes Ooredoo Algeria so special,” says Chrigui. “It’s also the concrete contribution of the procurement and supply chain function to the improvement of the company’s financial KPIs, and the business turnaround in key areas. These really differentiate the local procurement organisation, for us.”
