Strategic Sourcing And Procurement Cycle Of Telstra

Critical Examination of strategic outsourcing

The foremost determination of this unit of the paper is to focus on the background of the chosen organization Telstra and risks associated with the project and the procurement management.

Largest telecommunication industry in Australia, Telstra operates and builds around different types of telecommunication networks and market voices. The mobile networks and the internet access and pay television are the other type of product and services provided by this telecommunication organization. Started as a public service organization this tele communication organization is now a private service organization. This business organization is going through lots of changes as the market value of the organization is fluctuating very much in recent years. Pay TV and data cable network are the other types of service known as Foxtel are provided by this organization. The privatization of this telecommunication organization was in three stages such as T1, T2 and T3 (Telstra.com.au 2018). The government of Australia owns about 51% of the total share of this organization which was later sold to the Future Fund of Australia which provides pension schemes for the public servants of Australia. The entire national broadband network of Australian is mostly managed by this telecommunication industry.

The management team of this organization is very much efficient in their operational strategies. The introduction of Telstra digital is one of the most significant step for this business organization, it was helpful in improving the use of the digital channels for the clients of this business organization. The optimized application of Telstra is very much new to the consumers, the stakeholders of this business organization use Facebook applications to manage their Telstra accounts. Different types of payment gateways are integrated with the working condition of the Telstra such as PayPal. In the year 2016, Telstra is the most valuable brand in Australia. This business organization sponsors many international sports events such as National Rugby League premiership and the Formula 1 races.

This paper will be focusing on the activities of this organization such as the purchasing power, quality control measures, transportation, incoming inspection and outsourced process. The ever changing business conditions are the main reasons behind the need of constantly improving the source process of this organization (Zuiderwijk et al. 2014). This business organization updates its operations strategies according to the needs and requirements of all the stakeholders associated with the organization. The other need for updating the policies is the competitive advantage considering the rival telecommunication organizations.

This unit of the paper will be focussing on the strategic sourcing cycle of selected organization. Telstra has a very impressive commodity use forecasting planning measure. The strategic sourcing of this telecommunication industry also includes the market analysis which is very important for the aspect of this telecommunication industry. This business organization evaluates the role of its suppliers to find the effectiveness of their services. Implementations of the different types of contracts are other aspects of strategic sourcing of this business organization (Hughes, Morrison and Ruwanpura 2018). The management of the different modules of this industry such as the supplier are managed with the help of the strategic out sourcing.

Challenges Associated with Strategic Sourcing

This telecommunication industry maintains very good relationship with all the stakeholders associated to this organization as they always want to expand the business reach of this organization. The standard of behaviour is always set by this organization. The labour and the human rights are always focussed in this organization. Along with that, this business organization deals with health and safety measures of all its employees. The business integrity is a very important criterion of the operational strategies of this business organization. The privacy and the supplier diversity are the other characteristics feature of this business organization. This business organizations deals with the e-sustainability initiative which is the most important characteristic feature of sustainable procurement of this business organization (Raganelli and Mauro 2016). The other essential aspect of the sustainable procurement of Telstra is the partnership with the other type of tele-communication organizations of Australia by the name of Joint Audit Cooperation. This association helps this organization in developing the corporate social responsibility in the ICT industry. Confidentiality is maintained in the working environment of Telstra with the help of the exotic sustainable procurement.

The organizations need and requirements are successfully meet with the help of this approach. Human value as well as the values of the assets of this organization is successfully managed with the help of these discussed parameters of the strategic sourcing.

It can be also said that the different aspects of the strategic sourcing can bring different types of issues and challenges associated to this business. Inefficient market analyse could lead to heavy business loss for this business organization (Muange and Chirchir 2016). The incorrect evaluation of the suppliers can be a huge source of concern considering the growth of this organization. The employment contracts should be properly explained so that clarity is maintained in the business process.

On the other hand, it can be said that the existing procurement strategy adopted by this organization is vulnerable to market conditions. All the telecommunication industries of the world are finding it difficult to cope up with the risks associated with these industries. The operational strategies adopted by this business organization is successful to a significant extent, however, plenty of changes in those strategies could have been better for this company. The business partners or the subsidiary organization of this organization should have been awarded with bonus schemes in their joint ventures. The human rights of this organization should be regularly checked as the needs of the stakeholders of this business organization are changes with time (Ghadge et al. 2018). The labour of this organization should be aware of the mission and visions of the company instead of imposing any harsh regulations on them. The method by which the business integrity is maintained in this organization should be very much flexible as the employees always wanted to work more freely according to their wish. The method by which privacy and integrity is maintained in this organization can be replaced in a more effective way by the implementation of the IT based ERP systems. The challenges and the issues associated with the business organization can be very much minimized with the help of these proposed strategies.

Enterprise Focus

The resources and business processes associated with this industry are maintained with the help of the effective procurement strategies, which considers every single entity associated with this telecommunication industry. The organization have their branches throughout Australia which are managed their respective operational heads are based on the procurement strategies of this organization.   The back office leads and the transactions leads are effectively handled with the help of a secured and efficient payment gateway which fulfils procurement strategies.  

Enterprise Focus The third party expenditures are reviewed by the ERP management system which is based on the procurement report of the organization. The different departments are analyzed with the help of the sustainable procurement strategies (Bryson 2017). The buy in from the field is the other strategies of the optimal procurement report. Harmonization of the processes across the enterprise is maintained with the help of their procurement report.

Customer Proximity The customer proximity unit of the procurement helps this business organization to deal with their internal customers. The business processes can be improved with the help of the strategic planning.

Table 1: Two most important aspect of strategic sourcing

(Source: Created by the author)

All the discussed contribution will be helping Telstra to have a competitive advantage over the other telecommunication industries of Australia. The complexities associated with the telecommunication industries can be solved purposefully with the help of the discussed aspects of the strategic sourcing (Bateman, Hines and Davidson 2014).  The importance of strategic sourcing can be understood with this section of the paper.

The prime focus of this unit of the assignment is to focus on the successful implementation of the procurement cycle principles in the selected organization Telstra. The procurement cycle principle is defined as the circular process consisting of key steps; it is very much important for business organizations such as Telstra to follow this procurement cycle principle when procuring goods and services (Ishak and Said 2015). The integrity of the entire business process can be effectively maintained with the help of these procurement cycle principles (Harrison and Lock 2017). The procurement cycle principles are directly related to the governmental legislations and complexities such as the taxation and the other government regulations associated with the business organization can be solved purposefully with the help of these procurement cycle principles. 

Transparency: It is one of the most important principles followed in the procurement processes of most of the public business organizations (Waddell 2017). According to this procurement cycle principle, all the stakeholders associated to the business organization such as the service providers, suppliers and the contractors must have the access to every information associated to the business and industry unless there are valid reasons such as the confidential information such as the future marketing strategies, as leaking of these information may lead to the loss of the corporation.  

Telstra is very much sincere about their transparency considering their circulation of information among their stakeholders. The organization categories the confidential information with the general information and release the general information’s of the Telstra accounts of their employees (Sonnekus 2014). This business organization have stringent regulations related to the circulation of information as any kinds of violation in terms of information outside the business organization may have a direct negative impact on the concerned stakeholder.

Integrity: Integrity or reliability is one of the other vital aspects of the public business organization. According to this procurement cycle principle, the information which is sent by a procuring entity of a business organization should be very much reliable (Lozano et al. 2016). This principle helps in restoring confidence in any business cycle which is expanded to many complicated business situations. The information must be very much dependable and free of the ambiguity factors.

The selected organization Telstra ensures that integrity is successfully maintained in their working environment but there are few instances which were found that the information associated to the external stakeholders such as the suppliers of the raw materials used in this business organization were found to be compromising some of the data to the other telecommunication corporations which they are giving service to (Agarchand and Laishram 2017). Thus it can be said that Telstra is partially successful in maintaining integrity in their procurement process.

Openness: This is very significant aspect among the procurement cycle principles, it states about the openness of all the requirements of the business procurement among all the a qualified personnel’s of a business organization (Chen 2015). General public not should be having access to the confidential files of the business process. Approval of the authority is a must to forward the information from one entity to other within or outside the business organization. Except for the proprietary information, every other type of information should be circulated within the stakeholders of a business organization.  

The selected business organization is very much successful in implementing the Openness principle in their business environment as they have a very secure platform which is used to pass their information from one desk to another and this passage is not possible if the data is not authenticated by a middleman who checks the authenticity of the data (Tate 2014). All the business activities in this business organization, considering the procurement processes are managed with the help of this middle man who helps in improving the success rate f this organization by maintaining this procurement principle.

Fairness: It is one of the vital aspects of procurement cycle principles. According to this principle all the internal and the external stakeholders associated to a business organization should be treated equally to bring out the best from them. This leads to better decision making among the internal stakeholders. This principle may be also defined as the way by which compliance is maintained in a system. Right to challenge the procurement process in a business organization is one of the other approaches of this procurement principle.

The selected telecommunication corporation is partially successful in maintaining openness in their working environment (Haugbølle, Pihl and Gottlieb 2015). It can be said that this organization treats their employees according to their designations, however it can be also said that this business organization provides a separate communication portal to all of their stakeholders to register any of their complaints against the existing business processes.

Competition: It is one of the most significant aspects among all the other kinds of procurement cycle principles. According to this principle every stakeholder associated to public business organization should not be manipulated under any circumstances for the benefit of the organization or individual benefits also (Hauschildt?a and Schulze-Ehlersb 2014). This principle also states that the importance of the market response should be considered while implementing any of the procurement principles. According to this principle the practise of the non-competitive procurement methods should be minimized in order to have a negative impact on the business processes.

Being the largest telecommunication industry in Australia it can be said that Telstra is very much successful in maintaining this principle in its working environment. Non-competitive procurement methods are not at all considered as an option in this business organization, instead of that this organization relies heavily on the sole sourcing (Kristensen et al. 2015). This organization understands the impact of the Non-competitive procurement methods so they always prefer the market response while implementing any of their business strategies.

Accountability: According to this procurement cycle principle, it can be said that every internal and external stakeholders associated to this business organization is responsible for their decision or action regarding any of the important decisions. Any kinds of obligations will not be tolerated at any cost considering the violation of this procurement principle.

This business organization has numerous issues associated with accountability especially in the remote areas of Australia where they provide services. The data cabling service of this business organization is the most affected modules of this business organization considering these criteria (Pooe, Mafini and Makhubele 2015). So, it can be said that this telecommunication corporation should be improving their accountability problem to achieve a more competitive advantage than the rival telecommunication countries of Australia.

Procurement Cycle Principles	Success rate in Telstra
Transparency	Successful
Openness	Successful
Integrity	Successful
Fairness	Partially Successful
Competition	Successful
Accountability	Not successful

Table 2: Success rate of procurement cycle principles in Telstra

(Source: Created by the author)

As discussed by Ozguler (2016), the increasing globalization is having both positive and negative effect on the growth and development of the telecommunication industries around the world. There is an increasing need for maintaining effective procurement management team to deal with all the possible risks associated with the projects. The author this resource highlighted about the importance of the procurement management and also stated about the application of knowledge, skills, tools and techniques in the implementation of the procurement in a public business organization (McCue, Prier and Swanson 2015). The main drawback of this paper is that it is written in a generalized format which is not very much reliable and the advantage of this paper is that it discusses the different procurement principles in a detailed manner.

However, according to Handfield, Primo and Oliveira (2015), relationship management among the stakeholders of telecommunication industries is the only way which can make them handle complicated risks associated with the projects in this industry. The authors of this resource focussed on the importance of the relationship management which can be a critical factor considering the success process of the telecommunication industries. The author of this resource stated that most of the telecommunication industry has similar types of issues such as the issues coming the client’s side which is a bit incorrect. The writer did not mention the name of any global organization that can follow their methodology to achieve competitive advantage (Byrne and Mo 2015). The prime advantage of this paper is that it focuses on risk mitigating step rather than writing different processes in an unstructured manner. However, the most significant limitation of this paper is that it does not justify writers proposed methodology with the help of any telecommunication industry which has applied their methodology and achieved success in it.

It can be understood that both the authors had their personal opinion about the methods and technique by which the risks associated with this industry can be solved purposefully. But the implementation of the effective procurement management is more effective than only concentrating on the relationship management of the stakeholders as there are lots of other issues which needs more than just management such as the monitoring the performance of the marketing team which cannot be managed with the help of the relationship management.

Conclusion 

From the above paper, it can be concluded that the procurement process is very much important for every businesses organization in accomplishing their mission and vision for the organization. All the essential activities in global organizations such as Telstra can be managed and all the possible risks associated with the organization can be improved with the help of the procurement processes. In order to face the complicated business environment or achieve competitive advantage procurement processes play a key role. The importance of the strategic sourcing is also mentioned in this paper with prime importance along with the importance of contract management between the internal and external stakeholders of Telstra. The literature review unit of the paper helps in understanding the opinion of different authors who stated their views about the importance of the procurement management in dealing with the risks associated with the global organizations such as Telstra. Based upon the opinions of the authors an overall analysis was also included in the later unit which glorifies the importance of procurement management in dealing with the risks associated with the global organizations.  

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