The 5 Biggest Issues in Telecom Procurement
Sourcing telecom services for your company is a tricky business. At the enterprise-level, telecom procurement teams face a myriad of services choices and dozens of different vendors to choose from in an ever-changing technological environment.
In the wake of these various challenges, an apathetic attitude toward contract negotiations has taken hold, with organizations choosing to renew agreements instead of seeking out new alternatives that can provide significant cost savings as well as create new operational efficiencies and a higher level of service. However, at the end of the day, while the problems experienced during telecom procurement are complex and numerous, they can be overcome.
Here are five of the most commonly encountered issues and tips on how to effectively manage them.
1. Inaccurate & Incomplete Data
While accurate data is typically available, most organizations, from lower middle market companies to global enterprises, will often struggle to have all the data needed to provide their procurement teams, in addition to not being organized in a centralized manner that is easily accessible.
If your in-house procurement managers lack insight into your current usage and spend, existing vendor relationships, and are not privy to the Company’s short and long term goals with it’s communications, contact center, and security needs, they are essentially left in the dark and have a big disadvantage in pursing the procurement process. This results in the inability to extract the greatest value, a failure to create the optimal cost-savings, and greatly reduces the chances of designing the most effective solution.
To provide accurate and reliable data, you must perform in-depth and detailed analysis. Conducting a full assessment of the company’s current software and systems used, a detailed baseline of the firm’s telecom spend, and taking into account the company’s expansion plans, acquisitions, consolidations and operational objectives – will enable you to put together the necessary data requirements. And, with the assistance of your outsourced telecom procurement team (yes, that would be us), we can benchmark all of our your requirements and create a detailed RFP to go to market with for the industry leading service providers to bid on.
2. Lack of Industry Experience
The current telecommunications market is evolving faster than ever. With the constant stream of new technologies and vendors entering the market in addition to the fact that we’re at the beginning stages of a big transition into cloud, mobile based services and a completely connected world with IoT, only those who work within the telecom sector on a daily basis can ever truly understand its nuance.
Your in-house procurement teams and IT service firms are likely skilled at handling and managing large, ongoing contracts, but without an in-depth knowledge of such a volatile market, even with their expertise, negotiating the best rates and understanding which telecom solutions and providers best fit with your needs will nearly be impossible.
To leverage expert telecom insight, organizations must bring on the services of those with long-standing ties and a wide network of relationships in the telecom industry to truly understand the technology and services that are available and present the best solution.
3. Failure to Engage Stakeholders
Stakeholder engagement is a delicate matter and we understand that telecom service procurement isn’t everyone’s top skillset and it can prove difficult to capture a stakeholder’s imagination when discussing data collection, putting bid packages together and negotiating contracts.
Managing stakeholder expectations and keeping everybody informed are key factors to procurement success. In addition, prioritizing the cost-savings and improved cash flows that are generated as a result is the best method of keeping everyone on-board.
To ensure this information is expressed as clearly as possible, your procurement team (whether in-house or outsourced) should create detailed reports that provide insight into the facts and figures underpinning the sourcing process as well as an outline of the timelines and each person’s respective involvement. Clear information will provide the best possible chance of obtaining stakeholder sign-off.
4. Global Delivery Oversight Issues
As communications become more open and the business community becomes more globalized, the bigger the need is for a world view of telecom services. Remote workers, outsourcing partners, and vendors are connecting from all corners of the world whether it be the US, Europe or APAC region. To take advantage of this fact and to facilitate seamless communications, companies need their telecom contracts to be manageable on all continents.
Although vendors are becoming increasingly competent at supporting international telecom installations, the ongoing support needed to ensure success is often far from global.
To alleviate this issue, you need to work alongside a procurement firm that can support your needs on a global scale and coordinate the bidding process with the most suitable partners. This can help you to ensure that all telecom contract stipulations are honored in full, regardless of which country the services are being delivered in.
5. Price & Service Changes Over Time
The most meaningful figure that a procurement team can impact, regardless of being in-house or outsourced, is your company’s bottom line. Their value as an integral function of the business is directly correlated to generating savings and positively impacting cash flows.
The rate at which telecom providers change pricing and their service profiles is daunting to keep up with, and what may be great technology this year, can essentially become outdated next year and have completely new pricing. If you signed a long term contract at the then current rate, you’re likely overspending based upon the current benchmarked rate for the same service in subsequent years. In addition, if alternative newer technologies were used to service your current needs, not only is it likely that you will benefit from significant savings, you can also achieve more flexibility and new operational efficiencies. Or perhaps you acquired another company that’s on another carrier and/or consolidated offices. Cancelling services to close offices and bringing all services to your existing carrier will typically create additional savings and remove the administrative overhead with managing another vendor. While these all may be small items that remain unnoticed, over time, they add up to be significant sums of money.
To effectively reign in these price and service changes, your procurement teams must ensure due diligence is paid toward telecom vendors honoring contract terms and conditions and regular reviews are made of all service lines. This is achieved by making sure your team has the capability to properly manage and audit all bills. If a disparity is found, you’ll have the ability to act on it and receive a refund of the overbilled portion. In many cases, we’ve seen recoveries go deep into 6 to 7 figure sums.
The Solution to Your Sourcing Challenges
As the number of available technologies continues to grow and new vendors are coming on the scene while others are being acquired and consolidated with the majors, its become increasingly harder to find a solution that best meets your organization’s needs. Possessing keen insight into the telecom industry, an independent and neutral telecom procurement firm can help you overcome many of the hurdles you’re likely to face.
More and more, companies are leveraging new communications and contact center technologies to create additional competitive advantages for themselves. Enabling their employees with the latest tech to increase productivity, engage with customers better, and unify communications firm-wide in a more simplistic manner, utilizing services like Unified Communications as a Service (or UCaaS), is definitely on the rise.
When it comes to creating a solution and going out to bid with multiple providers, specialized firms like Boon Networks can help organize all the necessary information so everything is available to benchmark the company’s service profile and to ensure all contract stipulations are honored. What’s more, with extensive visibility into many carriers and service providers and having a deep understanding of what they are really willing to provide, telecom procurement firms are perfectly situated to help you become attuned to your specific service needs and can share valuable insights during the entire procurement process.
To speak with a Boon Networks specialist and discover how we can help with your procurement challenges, get in touch with us.