THE FACULTY QUARTERLY 

Autumn, May 2015

Telstra’s CPO takes home prestigious award

Richard Allen takes out The Faculty’s ‘2015 CPO of the Year’

At this year’s annual Asia-Pacific CPO Forum, Telstra’s Richard Allen was honoured with the prestigious CPO of the Year title.

Awarded for his significant contribution to Telstra for a range of initiatives as well as his functional excellence, leadership, commercial capabilities and personal drive, The Faculty Quarterly sat down with Richard to discuss his recent win and what makes a top CPO.

Richard, tell us about your role as CPO at Telstra.

Predominantly, I am responsible for the engagement of all third parties into Telstra both locally and offshore. That works out to be procurement spend in excess of $12 billion. In addition, I am responsible for supplier relationship management for Telstra’s key partners.

The judges of The Faculty’s CPO of the Year award said that your key achievement was contributing to Telstra’s customer-focused strategy. Can you tell us a bit about this initiative?

Over the past four years, Telstra’s corporate mission has been to improve the service offering for customers. The Procurement and Supply Chain team at Telstra have rolled out a number of initiatives that improve customer service and provide better value to our customers. Our key highlight has been introducing a business model in call centres which includes a payment model, and core performance measures which provides incentives for our Partner-managed agents to improve customer service. The model drives first call resolution and promotes customer advocacy.

This model is unique in the telecommunications industry globally, so it’s been encouraging to see we have piqued the interest of other telecommunication and financial service companies internationally who are looking to replicate our model.

Our team also introduced an innovative service evaluation which helps measure and increase advocacy within Telstra’s suppliers. After all, they are often our customers too, so it’s important to develop tools that can strengthen our relationship with them.

What other key projects have you introduced at Telstra?

Payment terms –

We adopted a more consistent approach to payment terms, implementing standard payment terms aligned to industry norms. We did not settle on just implementing the revised terms, we also looked at providing a better payment experience for our suppliers. We unlocked a significant incremental cash benefit to the business, provided our suppliers with greater payment certainty and removed up to seven days out of the previous payment cycle process.

Supplier Partnerships –

We’ve also embarked on a program to provide a cohesive enterprise-wide approach to maximise supplier performance. We are transforming our key partnerships to enhance customer advocacy, reduce supply risk, enable business growth and drive mutual value.

We identified 18 strategic relationships: 12 current and six emerging. Each has an assigned Relationship Owner at the executive level focusing on innovation, opportunity creation and growth aligned with our company strategy. We conduct quarterly sessions with each Strategic Partner to align with and identify joint projects for mutual benefit.

This is expanding into a broader Supplier Relationship framework and approach aimed at the next 100-150 critical and key suppliers focussed on supplier performance, risk, innovation and mutual value. For Telstra, this style of relationship management is instrumental if we want to remain ahead of the curve in terms of technological innovation.

My team was also awarded a CIPSA award in 2014 for best Capability Development Program, which was certainly exciting. We developed this program in partnership with The Faculty and Melbourne Business School, so it’s great to be recognised for this broader employee transformation initiative.

In your mind, what makes a top CPO?

A top CPO needs to provide a vision and strategy and clear performance targets that enable the team to focus and be single-minded in their execution of the plan. The CPO needs to understand the fundamentals of the business - what is important and a priority at that point in time. A top CPO needs to be commercial and impact both the top and bottom lines.

My advice is to hire good people - they don't necessarily have to have a long history in procurement. Find talent that can engage and influence a diverse group of stakeholders , and we can teach the rest. We strive to do all of this within Telstra Procurement: we don’t always get it right, but continue to review and adjust to ensure we are delivering exceptional service for both internal and external customers.

What does the CPO of the Year award mean to you?

It’s an honour and recognition of a lot of hard work from the whole Telstra Procurement team. It’s validation of the strategic plans we made two to three years ago and have since executed. Hopefully it inspires our team and others to keep driving the profession of procurement within their organisation. Having such a prestigious award in our profession elevates the role of procurement in corporate life, and is influential in ensuring procurement has a seat at the table.

Thanks for your time Richard, congratulations on the award again and best of luck this year at Telstra.

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