vendor management in today´s telecommunication market – selective sourcing and agile setup at...

CAST CIO Conference 2013 - Telefónica Germany

Vendor Management in today´s

Telecommunication Market –

Selective Sourcing and

agile Setup at Telefónica Germany

Public – Nicht vertraulich

Telefónica Deutschland Holding AG listed at the Frankfurt stock exchange and

quoted on the TecDAX index

Third biggest integrated telecommunication provider in Germany (by revenue)

Over 10 Mio. contract customers

25.3 Mio. customer accesses, including 19.4 Mio. mobile customers

Revenue of more than 5.2 billion € in 2012

5,000 employees nationwide

One of only three holders of a 800 MHz LTE-licence

Telefónica Deutschland is one of the top-players in

the German market

As of July 2013

CAST CIO Conference 2013 - Telefónica Germany

Telefónica IT Strategy

Cost Digital Simplicity

Future proof IT

CAST CIO Conference 2013 - Telefónica Germany 3 Public – Nicht vertraulich

Influencing factors of the IT Sourcing Strategy

Sourcing Strategy

Global Initiatives

RFPs (WP, DC)

Group contracts

Local contracts

Budget

Outsourcing & licence

IT Strategy

Competencies

Delivery Quality

Internal Stake-holder

M&A

e.g. sourcing portfolio hansenet


To make the difference we are now focusing on

simple subtle sourcing activities

Challenges for Sourcing Proof Points of VM

Efficient Supplier

Management

Focus on

Core Competencies

Sourcing Flexibility

Agile working mode

Global Scale

• Consolidation to a small number of

best possible suppliers

• Strategic Partnering

• Code of Conduct

• Outsourcing of non core competencies

• Flexible contract conditions, e.g.

duration, location, scope, m&a

capability, framework for agile

Development

• Aligned technical & commercial

governance


Vision of sourcing strategy – decision drivers

Selective Sourcing Vision Global Consolidation

Quality

Local costs

for OB/IT Synergies

in Service

e.g. Managed

Service

e.g. Global

Project

Dimensions which drive selective sourcing decisions

CAST CIO Conference 2013 - Telefónica Germany 7

Separated consideration along the supply

chain

Plan & Build

Run (Workplace & datacenters)

Strategic applications stay inhouse or are

covered by dedicated supplier

Define your sourcing object and decide

how you want to weight its dimension

Global consolidation must be synchronized

with local demand


Define common contract

model based on all global

learnings and align best

practices on corporate level

Analysis of right sourcing mix

for all applications

Settled quality standards +

measures with one Expert

Team

Lessons learned considered

on european / global level

Different contract models

New agile Annex to be

incorporated to all contracts

Actual requirements not

sufficiently reflected

Optim

ized c

ontra

ct, s

ynchro

niz

atio

n o

f

glo

bal a

nd lo

cal c

ontra

cts

and v

endors


Local contracts in different

operating models

Migration to global DC

Mismatch between local and

global workplace initiative

Pla

n &

Build

R

un

Identify and adress gaps

between ‘as is’ and new

operating model

Active involvement in global

tenders and local exit

management

Successful DC transition of

all assets & locations in

scope of global migration

Matching of global and local

operating model and its

related contracts

Current Situation Strategy 2013-15 Vision 2016

Sourcing Improvements till 2016 in several steps

to achieve the best – Globally and Locally


Data

Cen

ter &

En

terp

rise

Sys

tem

s

Wo

rkp

lac

e &

Cu

sto

me

r

tou

ch

po

ints

Ap

plic

atio

ns /

Deve

lop

me

nt

Organization Working method

Agile Methodology

Breakdown in three Clusters

e.g. Task Priorization

Sprints

Daily Standups

Backlog

…

New

Vendor

Management

VM setup regarding organization and working

mode proofed to be critical success factor


IT

Priorities Market

Trends

Budget

Challenges

Limited

Resources

Global Vendor

Management


Code of Conduct – „One voice to supplier“

a cultural change in the supplier relation


Stringent communication aligned between

all hierarchical levels

Similar Governance Setup for all strategic

suppliers

Contract trainings for all involved parties

Quality measurements

Claim Management integrated in project setup

Aligned VM and Line Management tandems

Code of Conduct principles

Mana-

gement

Technical Vendor

Management

Strategic

commercial

Vendor

Management

Monitoring, Reporting

Escalations

Strategic Guidance


KPIs as governing factor for our Sourcing Activities

For Example: Development

11 CAST CIO Conference 2013 - Telefónica Germany

Quality in Production

Examples:

Number of Defects in

Production and

reopen rate

Number of severity 1

and 2 defects

Development

Fulfilment of

deadlines in

development

Code Cleansing and

Transferability

Quality in Test Phases

Number of open

defects at delivery

Number of defects

not found in

Component Test

Additional KPIs for Agile Development

Alignment to Scrum

methodology –

Meetings and

Artefacts

Team Stability /

Fluctuation

Refunding System based on a yearly evaluation

Measure plans for improving performance if necessary

Supplier of the Year

SUMA – Global Supplier Management Evaluation


Critical Success Factors for effective sourcing

12 CAST CIO Conference 2013 - Telefónica Germany

Selective sourcing Global and corporate alignment Agile team setup with excellence

cluster

Established governance and escalation model with aligned ‘Code of Conduct’

Proof points

2010 2013

98.00

98.35

98.70

99.05

99.40

99.75

Number of Suppliers

Operational expenses %

SLA Compliance in RUN %


vendor management in today´s telecommunication market – selective sourcing and agile setup at...

Business

sourcing object

global learnings

dimension global consolidation

agile development

agile setup

global project dimensions

contract customers

ma capability