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How South African telecom company Openserve is taking its procurement function to new heights

How South African telecom company Openserve is taking its procurement function to new heights

Tirelessly providing a connection to its customers, wherever they are, Openserve’s procurement transformation is helping to cement its position as the leading telecommunication company in South Africa

Whether you’re downloading a report for your business, browsing the internet, or streaming your favourite songs, connectivity has become a key building block in our day-to-day lives.

Championing this technology-empowered, connected future, Openserve has laid down approximately 150,000km of fibre optic cables and connected over 81,000 homes to fibre, making it the largest telecommunication company in South Africa.

Though you may not have noticed they were there, Chief Procurement and Contracts Officer, Benjamin van Zyl, believes that it's often the companies behind the scenes, like Openserve, that are having a big impact in the country.

“Openserve is a division of the Telkom Group and it has been instrumental in enabling connectivity across South Africa and its borders”

“Openserve is a division of the Telkom Group and it has been instrumental in enabling connectivity across South Africa and its borders,” explains van Zyl.

“Our mission is to be the connectivity provider of choice and enable a data-driven ecosystem. For us, it’s been important to drive a performance-based culture where ‘doing what’s right’ for the client, customer and the company takes precedence over anything else. I am proud to say that we have created a strong foundation to build on.”

As the largest fixed wholesale operator in South Africa, Openserve operates across global, enterprise, carrier and consumer market segments. This, of course, means that the company has multiple competitors.

Van Zyl says he welcomes the rivalry as it drives the firm to improve and compete with rigour and perhaps nowhere can this be seen better than Openserve’s approach to cost-efficiency.

“To survive in a world where the cost of infrastructure is expensive and the price the client is willing to pay is continuously coming down, cost optimisation has been weaved into our business strategy,” notes van Zyl.

“Openserve has been very successful over the last few years in reducing costs through workforce optimisation, consolidating the supplier base, reducing the onerous specifications in our contracts and tightening our controls to avoid cost leakage and unnecessary spend.

“In all these initiatives, strategic sourcing and contract management play a key role, but it remains a cross-functional team effort to deliver the benefits. Our focus now is on improving our return on investment (ROI) by reducing the capital cost of the value chain in our Metro Ethernet and Fibre to the home (FTTH) deployment.”

In today’s supply chain sector, improving visibility continues to rank as one of the most necessary but challenging tasks facing procurement professionals today.

As a listed company, van Zyl believes that improved visibility is “absolutely critical” to driving efficiencies and managing risk.

“When I joined Openserve, I created a control tower capability to create visibility in our supply chain, do analytics and identify opportunities to drive efficiencies,” he notes. “An example would be in our network build environment, where we are busy creating a supplier interface portal to manage the supplier build capacity per region and ensure optimal work allocation.”

Understanding that today’s new technologies could be obsolete tomorrow, Openserve prides itself on being agile and unafraid of change. As such, it has spearheaded digital transformation across the company to remain one step ahead of its competitors. Zeroing in on its network and IT platforms, van Zyl describes how the firm aims to create a ‘holistic’ approach to digitisation.

“We have introduced digital touchpoints that enable us to monitor and secure our network,” he says. “The Telkom Group is working with SAP Ariba to digitalise the source to settle process to free up resources from tactical work. We are also exploring the use of robotics to automate various processes.”

The South African firm has also implemented a forecasting and planning tool to improve delivery, optimise inventory and reduce working capital. On top of this, it has also created an innovative control tower to improve supply chain visibility, conduct analytics and improve efficiency in its supply chain.

With a next-generation fibre network, Openserve has provided a gateway for communities to connect. However, the company doesn’t underestimate the potential of emerging technologies like robotics, machine learning, artificial intelligence (AI) and automation.

The company’s CEO, Alphonzo Samuels, highlights that making the region more connected and digitally-enabled is not only beneficial for Openserve, it could also help to revitalise the economy and improve the region’s quality of living.

“Enabling the fourth industrial revolution is something that developing markets absolutely need to get right,” he says. “The Organisation for Economic Co-operation and Development (OECD) clearly warns that the digital divide will only widen if developing markets don’t seize the opportunities that digitisation will bring. We are therefore excited, but also understand that we must get this right. It’s a call to action that is founded on our desire to develop Africa.”

To remain agile and adaptive, Openserve has not only invested heavily in its network infrastructure it has also created long-lasting partnerships that have helped it meet the needs of today’s digital world.

In the past two years, the South African giant has joined forces with companies such as Huawei and Nokia to help provide a high-speed fibre packet and optical transport network.

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“Under the leadership of our Chief Technology and Systems Officer, Hugo van Zyl, we are implementing an IP-enabled optical transport network – we call it POTN (for Packet and Optical Transport Network),” explains van Zyl. “The POTN establishes an IP enabled optical transmission capability that can scale to meet the demands of the fourth industrial revolution, catering for higher speeds, increased capacity requirements, lower latency requirements and digitalisation of the network fabric.

“Fibre deployment remains a key future enabler for end-user connections, as well as small cells in mobile networks. Huawei’s contribution is important, providing this state of the art technology in a dual-vendor scenario.

“We also have a long-standing relationship with Mthiyane Construction. They are part of a panel of sub-contractors doing build, maintenance and repair work in different layers of the network. They are important as we need experienced service providers in all parts of the country to build a high-quality network.”

Partnerships have also been integral to areas such as supply chain – with Bidvest Fleet, for example, supplying and maintaining over 4500 vehicles used by the company’s technicians. It’s clear that this rich ecosystem of industry partnerships has been integral, helping to ensure that Openserve can continue to provide a connection, wherever its customers are.

Celebrating the company’s collaborative approach, van Zyl is also keen to highlight the efforts of his team, citing their passion as critical to the company’s success.

“What’s unique about Openserve is its people,” he says. “We have highly talented individuals with institutional knowledge as well as young talent with the zeal to take risks and try innovative solutions. Such a mix is seldom seen and I am excited about the unique blend that will take this company forward.”

Openserve has embarked on a radical procurement function and embraced technological innovation. To cement this new-found change, van Zyl outlines how the company has seen a cultural transformation as well as a digital one.

“Transformation always involves a change in human behaviour and people resist change when they cannot see its value,” he says. “People see digitalisation as a threat as they translate it to job losses, but I see it as an opportunity where it can make our jobs easier, better, faster and more fulfilling. However, you need to be willing to make this culture change as digital transformation involves new skill sets with millennials and baby boomers responding differently to this learning process. Unless our managers, employees and support staff embrace the change of digital transformation, it will fail.”

With this cultural change in motion, Openserve is not resting on its laurels. In fact, today it is now striving to become the largest open-access infrastructure connectivity company in South Africa.

“We are clear that we want to transform into a Digital Service Provider (DSP) that is able to expose the network as a service through open Application Programming Interfaces (APIs),” explains van Zyl. “This is enabled through the ongoing virtualisation of hardware through NFV (Network Function Virtualisation) and managed through the concept of Software Defined Networks (SDN), truly digitalising our network.”

With a rigorous, digitally-enabled plan underway, the South African firm is preparing for the next chapter of its journey. But regardless of any changes, it seems Openserve will unwaveringly remain at the heart of connectivity in South Africa.

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How South African telecom company Openserve is taking its procurement function to new heights

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