Jordan Telecom joins Tejari to cut costs

Jordanian PTT takes its procurement online with B2B marketplace in an attempt to streamline its purchasing and cut costs.

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By  Vijaya Cherian Published  July 28, 2003

I|~||~||~|Jordan Telecom (JT) is looking to streamline its procurement process and expand its supplier database by signing up with Tejari.com. Through its entry to the B2B marketplace, the telecom operator hopes to increase the overall efficiency of its business operations, cut its procurement costs and create a more effective buying cycle.

“Our partnership with Tejari is critical for the growth of our business in a number of key areas, as it will increase the scope of our buying activities while also consolidating our procurement processes,” says Pierre Mattei, chief executive officer of Jordan Telecom.
“We aim to enjoy a number of strategic advantages from this agreement, including a reduced inventory and wider access to a large number of suppliers in the local, regional and international markets,” he adds.

JT will be able to solicit and submit tenders as well as accelerate its time-to-market for key projects by using Tejari. However, to begin with, the PTT will use the e-marketplace to buy technology equipment. “We will first start our e-procurement by buying computers and networking supplies on Tejari,” says Raslan Deiranieh, chief financial officer, Jordan Telecom. “In the second phase, we shall look into the operational and administrative requirements such as stationery and furniture. Once we are comfortable with these purchases, we will consider looking at telco suppliers for data network and ADSL equipment,” he adds.

JT has already automated most of its internal IT and business processes to ensure that its e-procurement process run smoothly. It has also worked with Ross, its enterprise resources planning (ERP) vendor to customise its e-business suite so that it extracts data from each field accurately to suit Tejari’s requirements. However, this integration between its ERP system and Tejari’s Oracle-based backend systems is not yet complete.

“We have worked on fine tuning our internal processes for more than a year,” says Deiranieh. “During this period, we have put in place new processes and procedures to ensure complete automation and we are almost there. For instance, most of our approval processes have been automated. When there is a request for a product, it needs to be approved by the manager and sent to budget control and then, from there, it goes to the purchasing department. This entire process has been automated,” he adds.

||**||II|~||~||~|However, the next sequence, whereby the order goes from the purchasing department to Tejari, has not yet been automated. Currently, the purchasing department retrieves all the data from the ERP system and manually transfers it to Tejari. “This is because we don’t yet have in place the actual wired interface that connects our ERP system with Tejari’s but we will have it soon,” explains Deiranieh.

Although JT is unwilling to predict the cost saving its relationship with Tejari will generate, it is confident that the savings will be significant. “We saw a 40% reduction in costs when we automated our systems. Now, we will compare the prices we used to take manually with the new process. From our random sample findings, we already know that we will have more savings and many more suppliers,” says Deiranieh.

The telecom operator currently has over 200 suppliers offline and for each tender it contacts between seven and ten suppliers manually. However, through Tejari, it hopes to attract at least a minimum of 25 to 30 suppliers for each tender. Moreover, it is also expecting to see more of its suppliers join the e-marketplace. “When our suppliers see the exposure and the number of tenders that are placed on the market place, they will also be motivated to join Tejari. This in turn, will be very beneficial for us,” continues Deiranieh.

In the meantime, Tejari has held a two-day training course for eight of JT’s employees to teach them how to place orders and work in the B2B marketplace. JT has plans to eventually train more of its employees on the system. “This will be the final step to having a well-rounded A to Z e-procurement system,” explains Deiranieh. “The processes are almost in place. Now we need to also train our employees so that they are well placed to be an integral part of our paperless process. Once this is done, we will be able to realise maximum benefits from our tie up with Tejari,” he adds. ||**||

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