How and what Helios Towers Africa buys

By Frances Rose, Head of EMEA, TowerXchange: As African towercos mature and the ‘landgrab’ phase of the market settles down, there’s increasing pressure to not only bring sites up to scratch to meet Service Level Agreements (SLAs) and support new co-locations, but also to make increasing efficiency savings. At the TowerXchange Meetup Africa 2014 Alex Leigh, Business Development Director at Helios Towers Africa, hosted a round table to talk us through how these shifts are being reflected in the Helios Towers Africa procurement management and process structure and what that means for their suppliers.

TowerXchange: How is your procurement structured now?

We have functional heads across the business who report to the COO, Kevin Koch. Rob Salbego is our technical specialist who looks at solutions and makes evaluations together with Jean-Marc du Buisson, our structural engineer for tower solutions. John Welsh looks at O&M solutions and how this can fit into his overall strategy of delivering optimal processes. They look at the specifications and then they review with help from the commercial team.

TowerXchange: How do you vet new suppliers?

In terms of becoming a supplier to Helios Towers Africa it’s going through that KYS procedure. We sometimes work with the Vodafone Procurement Company team and some of our large capital items are sourced with their assistance, such as towers, generators, power cubes and batteries. If you’ve been through their procedure you don’t need to go through it again with us.  For other projects, such as remote monitoring systems and IT projects we run a detailed procurement process and often begin projects with a smaller scale test phase. Admittedly, the level of detail and the robustness of the process has created hurdles and stretched timelines.  But our experience has been that you need to take your time and properly vet suppliers and their products, because what might work in the lab and what will provide results in Africa in the field might be two different things..

TowerXchange: How much autonomy do your local operations have to make purchasing decisions?

In terms of interactions with the local operations, they will usually choose from items which have been approved by our functional heads but they also have the ability to bring up things they come across that are interesting. We have a standard approval process, the same you would see in any multinational, approvals that require different levels of approval ranging depending on materiality that range from local CEO to the HTA board.  Services and smaller value items are generally sourced locally, whereas the purchasing of large CAPEX items generally has more engagement from Head office.

TowerXchange: If a supplier had their product agreed and budgeted by the MNO prior to divestment of their sites, will you honour the deal?

If it’s a contract that is being transferred as part of the deal  then yes, but we evaluate each contract on a case by case as all our deals are structured as asset deals. Generally, we find that operators are not usually asking us to take on responsibility for in-process inventory as they usually cease sourcing products in the time between signing and completion of the sale and leaseback transaction.

TowerXchange: If you’re approved by Helios Towers Africa does it apply to Helios Towers Nigeria as well?

No, Helios Towers Africa and Helios Towers Nigeria are separate companies.

TowerXchange: How important is standardisation across Helios Towers Africa’s portfolio?

It is important to evolve to standardisation.  We are working to standardise our processes  as HTA is  a tower platform built not only to manage multiple towers but to manage  multiple markets. This does not mean all equipment must be the same but the process to manage them should be as consistent as possible. For the acquired sites we necessarily inherit mixed equipment and mixed needs but as we replace aging power equipment  we try to reduce unnecessay variation.

TowerXchange: If a supplier has a solution which they feel clearly answers your needs, how can they get to the point of pitching it to your team?

A lot of people who want to engage with us, whether it’s power, commercial or technical solutions; a lot of people want to get in. The light touch approach of ‘I have this and I want to meet with you’ or dropping us notes through LinkedIn gets lost. We need evidence of what your product does and bringing it to the right person is key. Do it in a way which gives it context and clear agendas. Make it clear what value we can  get out of the discussion from the beginning.

TowerXchange: How do you get hold of the right person?

Events like the TowerXchange Meetup Africa are great because we can meet a lot of new people face to face and find out more about what’s in the market. If you can’t meet us face to face then I suggest a clear email.

We have taken over networks that need the level of focus we bring to the table, and have had to deal with lots of reactive maintenance tickets initially rather than having time to invest in preventative maintenance. This means that a lot of what we’ve been buying has just been focussing on SLA delivery and only in the last 6-12 months have we been able to focus on optimisation. What we’ve done may not be the most efficient as we were breaking new ground but as a customer facing business the SLA always needs to come first. Now we’re really starting to focus on new solutions that have a track record of performance.

TowerXchange: How do you ensure Helios Towers Africa is open to innovation?

We try to embrace innovation as part of a structured process. If you’ve got the buy-in of our functional leads that will filter down very well and any timing delays of a structured process is a small price to pay to prevent corruption in the system.

TowerXchange: Do you involve operations in selecting products?

There’s pretty open dialogue on a day to day basis between operations and functional heads. Project teams build sites and operations teams deal with them on an ongoing basis so there’ll usually be a handover. As we systemise our cashflow we can see on a site level what equipment is there and how it is performing, which feeds back into the technical forums and inputs into why we should be buying certain solutions.

TowerXchange: How do you ensure the solutions you select are ’fit for Africa’?

We’ve looked at solutions which look good in the lab or European settings but which don’t work in Africa. You need to understand and plan for it because some turnkey products just don’t deliver in Africa. You also need to have confidence in your suppliers; SLAs don’t work if the company has gone bankrupt.

We ask questions like: How do you train field maintenance supervisors to use the product properly? That partnership from group to operational level is important. You have to be very open about how to use a product and how a supplier delivers it is very important. Where you have advanced electronics or line conditioning it means you need a different level of electrical engineer in the country – how do suppliers deliver this? You should defend the maintenance of your product or it will fail and everyone loses.

TowerXchange: What if suppliers want to deal with Helios Towers Africa directly?

Sometimes people want to engage more directly and there should be some benefit. When you get into the specialist end of procurement we need to evaluate if it’s working as well as it could. However, the VPC way is what we’re doing at the moment. For products that are not managed via the VPC route (such as hybrid solutions and RMS) then HTA will deal directly and if there’s a good reason not to go through VPC we do so. If a local supplier can deliver it quicker we’ll buy it if timing is an issue. It’s the main way we buy, but not the only way we buy. Because people are more familiar with it they’re more comfortable with it.