MTN Group – 2023 Digital Award Winner, Source-to-Purchase

By Vin Kumar and Andrew Savage
April 11, 2024
Season 5, Episode 22

MTN Group’s Procurement Center of Excellence Leader Andrew Savage talks with The Hackett Group’s Managing Partner and AI and Digital Operations Practice Leader Vin Kumar about MTN Group’s Procurement Cockpit, a digital transformation project which received The Hackett Group’s 2023 Digital Award in Source-to-Purchase. The central procurement intelligence platform focuses in three areas: sourcing intelligence, supplier governance, and best practices.

Welcome to The Hackett Group’s “Business Excelleration Podcast,” where week after week we hear from experts on how to avoid obstacles, manage detours and celebrate milestones on the journey to world-class performance. This episode is hosted by Vin Kumar, principal and AI and Digital Operations practice leader. Vin is joined by Andrew Savage, global lead of Procurement Excellence at MTN.

To begin, Vin explains that MTN won the Digital Award for Source-to-Purchase in 2023. Andrew starts off explaining the challenges they faced that led to creating solutions. He states that their data was in different places, and some suppliers had immature data processes, along with some data that was not always clean. Their solution was to put all data together to drive data decision-making and analyze data quickly. Another challenge was their geographical perspective with 17 markets across the globe and some in the mindset of a civil war. From a technology perspective, they conducted behavioral analytics to enhance the data to analyze how suppliers negotiate in different markets. This helped them understand negotiation strategies and how the suppliers would react in certain situations. They also could change the negotiation strategy to make the most optimal outcome.

Next, Andrew explains how to identify these problems. MTN has been ahead of the curve with data scientists starting five years ago. They have also used advanced analytics and artificial intelligence (AI) analytics for a significant amount of time. They mostly identify problems by walking the floor and speaking to people in procurement about problems. These problems are developed through conversations in identifying where the missing gaps are and the insights. It starts with a small idea from a brainstorming perspective, and then they get buy-in from teams and create something valuable. MTN keeps on developing different use cases with a huge use case library, and they bring them into the solution whenever possible.

The solution is Procurement Excellence 360, or PX 360, with a 360-degree view of procurement. This was created by the data science team, and they created the first module for it and the first use case for a sourcing calendar. All of the data now resides in the same place, creating the ability to advance or consolidate. You can also easily put in a supplier name or category, and it will throw out the opportunities for bundling demand. There is also multiple category bias and consolidating requests for proposal (RFPs) into a single one. This was quickly adopted and very successful, and they built more modules as the use cases developed. They now have 10 modules all within the same platform, and you can get all the information on a supplier.

In addition, Andrew discusses the technology solution insights that span a variety of markets with low maturity levels to high. There is less attention paid to the data in low maturity markets, but they can rely on data more in high markets. The main problem is solving data that does not exist; therefore, they must get imaginative in how to get that data. They pull open source, DMV and other operations to get data. Once they have the data, they ensure that the rest of the organization has it. The PX 360 has had a huge impact on MTN business. The return of investment (ROI) is critical, along with the center of excellence (COE) function and tracking the ROI. They run a constant check on savings for the business, and they have had 50 or 60 bundling opportunities. They consolidate that demand and save.

Robotic process automation is always tracking the man-hours saved, which is a huge time savings. Sourcing teams also need to wait for onboarding before they can start an RFP, which may delay them 20 days going to market. This cuts out 20 days on overall cycle time. The savings in negotiations is also significant because they know the behavioral analytics of the supplier, so they can assess missed opportunities. This has helped the buying teams, and they already know what they are bidding for. It is difficult to measure lost opportunity, but they do track when bundling opportunities are not used or converted. They also request feedback from the procurement teams and ask if they have used the tool in a transaction to assess total transaction value. This can’t be quantified, but it is being actively used. If people are using it, then it has value.

In conclusion, Andrew talks about the solutions that were built from the COE and if they are changing the profile of procurement talent. Procurement is always a people business with stakeholders and suppliers. This includes soft skills, and combined with data that could be a very powerful procurement practitioner. You don’t need to be a data scientist, but you do need to know how to use these tools and be prepared. For 2023, they have a list of different modules that they are planning on introducing. They want to bring that data science element in, and the next level is behavioral analytics in testing how the supplier reacts in different environments. They also want to look at past disruptions to predict how they will react for future disruptions. Lastly, he has not seen other functions applying these solutions. The CEO can support systems and their COE is more holistic. MTN plans to apply for the award again in 2024 because it shows great validation internally and helps to attract talent and compete with other market leaders externally.

Time stamps:

0:54 – Welcome to this episode hosted by Vin Kumar.

2:01 – Challenges faced to create solutions.

3:53 – Challenges in the environment.

6:36 – How does identifying these problems work?

8:15 – Explanation of the solution.

12:05 – Technology solution insights.

14:33 – Impact of the solution on MTN business.

17:12 – How do you measure the lost opportunity?