The Double-Edged Sword of Procurement Compliance

The procurement process is one of the most frustrating aspects of working for a telco. When I worked for telcos I found there were countless occasions when the process was so lengthy that by the time there was approval to purchase the product or service, I had pretty much learnt to live without it. Procurement processes were fraught with delays and complications. Even measures such as pre-qualification would sometimes fail to provide respite. The telco environment is also one where there is a vendor for everything. There is probably a vendor for providing a list of vendors [Editor’s note: there is, and it is called Gartner].

The biggest tragedy was seeing credible vendors fall by the wayside because they could not meet one or more items in the procurement checklist. Due diligence in procurement is of course important and comes with mountains of paperwork. Procurement is, after all, an area that can easily become the home of financial improprieties, bribery, corruption, cronyism and conflicts of interest. Bad procurement decisions can ruin reputations. However, there are also instances in which the process lacks agility, and rigidly applies the letter but not the spirit of the ‘law’.

Imagine a case where a certain item in the checklist requires the vendor to provide information, which, in the vendor’s country of incorporation, is not to be released unless certain conditions are in place. What should be done? Is the vendor expected to break procedures to get the job?  Of course not – that would indicate this vendor is a scumbag. Should the procuring company instead, make a call on alternative ways of meeting this particular requirement on the checklist? Making these calls in the process is risky. The buyer does not want too many deviations because that could also open avenues for abuse. Perhaps that is why companies opt to do a hard cut i.e. comply or you are out.

It is important to evaluate, after each procurement exercise, the reasons for dropping vendors at each stage. Over time, patterns will emerge and some of the patterns might show that vendors who are making it into the final stage are simply those who are good at filling in paperwork and were not hampered by other procedures that bind them. That might indicate the need to build in an exceptions process that is guided by proper principles and has adequate levels of management review.

The danger of sticking to checklists and not doing post-procurement reviews is that over time, the supply chain becomes just a list of entities that were in the right place at the right time and were able to satisfy requirements. Meanwhile, vendors that could have made a real difference are out in the cold – an unintended consequence that still costs the telco.

Joseph Nderitu
Joseph Nderitu
Joseph Nderitu is a director at Integrated Risk Services Ltd and specializes in revenue assurance. He previously worked as Head of Revenue Assurance and Fraud Management at Vodacom's operation in Tanzania, having previously served in the same role at Vodacom Mozambique.

Before his work with Vodacom, Joseph was an internal audit manager for Airtel, with responsibility that covered their 17 countries in Africa. Whilst at Airtel, Joseph led reviews of the Revenue Assurance, Customer Service and Sales & Marketing functions.

Prior to his stint at Airtel, Joseph was an RA manager at Safaricom in Kenya. He holds an MSc Degree in Information Systems.