BT Sourced and C2FO: A Dynamic Supplier Finance Success Story

The story of BT Sourced 

BT Sourced is an independent, BT Group-owned company that manages BT Group’s entire global sourcing operation with one simple goal: to redefine procurement, from top to bottom. To do this, moving away from their legacy supply chain finance system was imperative. Instead, BT Sourced is working to take procurement into a new, more forward-thinking era and to drive continuous transformation while creating value for customers, suppliers, colleagues and communities. 

BT Sourced’s vision of procurement is one that uses the latest advances in blockchain, AI, robotics and machine learning tech, with ESG considerations and support for SME suppliers. The company’s motto is “We source for a better future,” and with this in mind, BT Sourced is always looking to collaborate with partners who deliver new and innovative solutions, making working with C2FO the perfect partnership.

The challenge for BT Sourced 

BT Sourced was looking for a simple solution to a very complicated challenge. “They were looking for a really user-friendly digital tool that they could use with all their suppliers, which allowed them to use a combination of third-party funding, provided by their relationship banks, and also their own cash to facilitate early payment across the whole supply chain,” said John Anderson, head of relationship management for EMEA at C2FO. “They needed to unpick legacy supply chain finance systems and migrate to a new technical solution.” This was provided by C2FO, with a single-entry point for all suppliers.

The goal to be fully digital was also a key priority. BT Sourced’s Procurement Garage was created to work with startup and digital native companies operating in the field of procurement and supply chain management. The problem facing BT Sourced was that the complexity of legacy supply chain financing was preventing the dynamic cash flow required by its partners. This was due to the multiple layers of administration, outdated processes, and lack of central digitization. The solution provided by C2FO was particularly key for smaller, innovative and technology suppliers, for which access to earlier payment meant the difference between surviving and thriving; however, the solution is equally effective for larger legacy SCF suppliers.

Why BT Sourced chose C2FO  

As well as simplifying the procurement processes across the board with a simple, fully digital payment platform, C2FO’s DSF platform allows companies not only to utilize their own finances to pay suppliers but also to work with partner banks to secure additional funding, increasing the flexibility of how and when invoices are paid. 

Finding something innovative, fully digital and suitable for supporting SMEs was paramount for BT Group. Cyril Pourrat, Chief Procurement Officer at BT Group, said: “We wanted something digital, with everything available in two clicks, and we wanted to be mobile. Other solutions felt old school and unexciting, and focused mainly on large organizations. We wanted to find the easiest solution possible to support all our suppliers.” 

Of course, the simplicity of the platform and a smooth onboarding process is another key reason that C2FO was the right choice for BT Sourced. Pourrat said: “When we met C2FO, it was the perfect match. For our ambition to be fully digital, and to really simplify the way we pay our suppliers.” BT Sourced’s ethos is to make procurement simple, digital and responsible. 

Another consideration for BT Sourced was the opportunity for ESG incentivization through early payment. “BT Group wanted a solution to give their suppliers, particularly smaller, more innovative and technology suppliers, access to earlier payment, because cash flow is so important to those companies,” said Matt McQuillan, C2FO’s managing director for the UK. “They wanted a way to help those suppliers so that they could grow and thrive as businesses. Now they have implemented C2FO, they can collaborate more and incentivize suppliers to improve their carbon output, to provide more equal access to minority suppliers, or help larger suppliers to make strategic changes quickly.” 

How C2FO responded 

The rollout of C2FO’s Dynamic Supplier Finance platform has been an incredibly smooth journey for BT Sourced and its suppliers. “Phase one of the BT Sourced project was to give them a platform to pay smaller suppliers earlier,” McQuillan said. “Because of the success of that, they accelerated phase two, which was to migrate their existing bank supply chain financing solution onto C2FO, to be able to use bank financing with multiple sources across many more suppliers.” 

The DSF offering connects BT Group’s relationship banks to the C2FO platform and offers competitive financing to suppliers. While this sounds like it should be a multilayered process, what makes it unique is that it doesn’t rely on receivable purchase agreements and a huge host of additional documents; it is an incredibly quick and simple process for suppliers to be onboarded. They can onboard themselves digitally and be connected within a matter of minutes and ready to receive early payment for their approved BT Group invoices. 

Global connection 

BT Group’s goal of global connection was a key consideration, and C2FO responded in turn. “What is unique about C2FO is our supplier relationship management function,” said C2FO’s Anderson. “It is the largest in the industry. We have a huge team of dedicated supplier relationship managers, who speak multiple languages, so it doesn’t matter where the supplier is located, we can communicate with them in their language of choice and onboard them in an extremely efficient manner, which helped BT Group to scale up their early payment program in a very short period. This is particularly useful to BT Group as it takes the workload off the Procurement teams that are already stretched.” 

The ease of the transition and simple onboarding process has led to a more than 95% conversion rate from vendors using the legacy SCF program to C2FO Dynamic Supplier Finance, and using C2FO has meant the program has grown significantly with a further 100+ new BT Group suppliers now receiving early payment via C2FO, having never previously been offered an early payment solution. 

End-to-end automation 

C2FO also helps to streamline the process for the procurement team through end-to-end automation, whether that is simplifying and automating the file upload process, or giving suppliers visibility to their invoices (thus reducing queries to the BT Sourced team). Anderson said: “BT Group has also embedded robotics into the process to fully automate the dynamic discounting process.” The result? Simplicity. “The experience has been seamless,” BT Group’s Pourrat said. “‘They knew what we were looking for with speed of execution and simplicity. What we enjoy with this partnership is the speed.” 

Flexibility 

C2FO’s DSF platform has allowed BT Group to utilize a range of funding methods to pay its suppliers. “It gives us the opportunity to work with our preferred banks, as well as using our own cash. We have the choice to onboard different banks onto the platform, and depending on what cash needs and terms and conditions are with the banks, we can select and choose on a flexible basis what is best for our suppliers,” said Michael Hamann, senior procurement manager for BT Sourced. Suppliers also have the opportunity to request early payment, and on average, suppliers have been paid 47 days early. 

The results 

Through C2FO’s Dynamic Supplier Finance platform, BT Sourced has revolutionized its procurement practices. “We love the spirit of our partnership with C2FO, and it is working extremely well,” said BT Group’s Pourrat. Hamann agrees: “Overall, it has been a fantastic experience working with C2FO so far.” 

In the first 12 months since implementing DSF, over $1.78 billion has been accelerated to suppliers by BT Sourced, through a combination of its own and third-party cash, and the number of suppliers that are supported is expected to grow at a rate of 60% per year. 

C2FO’s solution has also resulted in increased choices when it comes to cash flow. “BT Group suppliers are using the solution because it offers them a lot of flexibility,” said BT Sourced’s Hamann. “The suppliers all have different needs, some want to be paid at quarter end, some at the end of financial year, and some accelerate their invoices on a regular basis. This platform gives that flexibility to choose for the supplier what works for them.” 

C2FO has resolved one of BT Sourced’s biggest company challenges. As said by McQuillan: “BT Sourced, which was set up to transform BT Group’s procurement, and through this collaboration with C2FO, has really transformed the way they provide financing to their suppliers.” 

C2FO is a super user-friendly technology-based solution that gives customers complete control over their cash flow with their suppliers. Whether that is using their own finances or utilizing third-party resources, C2FO’s customers are transforming the way they work with suppliers.

Learn more about Dynamic Supplier Finance here.