Sacre blau! Procurement JV transcends 2,000 years of history….

We featured the proposed procurement joint venture between France Telecom-Orange and Deutsche Telekom back in April, and indeed Jason Busch was also moved to cover in some detail this bold Franco-German tie up.

Supply Management now reports that Volker Pyrtek, CPO at the German firm has been appointed to lead BUYIN, as the joint venture has been named, which launches on Monday.  As we indicated last time, we have our own views on this - let's just say we can't think of a single successful precedent, but good luck to them and to Herr Pyrtek.

However, we felt had to get a more informed view from our very own Franco-German Telecommunications guru, Wolfgang Henri LeClerc-Meyer. Born in the Alsace region,  brought up bilingual, and fed by his parents alternatively on Bratwurst and Coq au Vin through his childhood years, he loves both fine nations equally and understands both the purity of Bavarian beers and the terroir of the finest Burgundy.  He also  worked in procurement (and in Telecomms) for many years, and now spends his time ensuring harmony between the two wonderful nations. Here's his take on this move.

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So now we have the latest innovation in the procurement world – France Telecom/Orange and Deutsche Telekom/T-Mobile pooling their buying activities in a new “collaborative” joint venture  snappily christened “BUYIN”. The organisation will be headed by Volker Pyrtek, currently CPO of Deutsche Telekom, based in Brussels and comprise around 250 employees.

The familiar expressions of “synergy”, “savings”, “expectations of €1.1-1.3 billion benefits” etc. abound, along with glowing testimonials to Mr Pyrtek as being a “truly entrepreneurial leader” over some eight years at DT. Of course, we are also aware of the similar towering leader of France Telecom Procurement during the last decade, Louis-Pierre Wenes, and his fondly remembered “TOP Sourcing” programme.

As we all know, if you get bigger without getting smarter, aggregation benefits are, at best, unsustainable or, at worst, fictitious, with suppliers cost of sale spiralling upwards with new layers of complexity and confusion within the buyer’s organisation.

What puzzles me is that both FT and DT are pretty huge organisations already and, if they have been led respectively by these two Procurement legends, and they have implemented rigorous and “entrepreneurial” procurement approaches, how come there is still so much “synergy” still left to exploit?

Oh, and by the way, suppliers did get a mention in the Supply Management feature, just a small one at the end, stating that they would benefit from “the standardisation of equipment used by European operators”. I’m sure they’re most gratified and will look forward to collaborative and entrepreneurial engagement with BUYIN (or perhaps those with choices will SHIPOUT?)

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