The Top 5 Challenges of Sourcing Telecom Contracts (And How to Solve Them)

Posted by
Josh Bouk

12 June 2018

Blog

Sourcing telecom contracts is a tricky business. At the enterprise-level, procurement teams face a vendor-saturated environment characterized by complicated rate-structures and multi-year commitments. The technical revolution is driving the adoption of a whole host of new, disparate services, and sourcing just one contract can be a long and drawn out process, let alone procuring several on a global scale.

In the wake of these significant obstacles, an apathetic attitude toward contract negotiations is arising, with organizations choosing to renew agreements instead of seeking out the saving alternatives. However, organizations that choose to pursue this route may be losing out on significant cost-savings. The bottom line is: while the problems experienced during telecom procurement are complex and numerous, they can be overcome.

Here are five of the most commonly encountered and tips on how to navigate them effectively.

Discover why Cass is the only publicly traded vendor that can support  multi-country contracts - download Gartner's market guide

1. Inaccurate Data

Today, accurate data is widely available, but, global enterprises still often struggle to provide procurement teams with the information they require.

If your in-house procurement managers lack insight into your usage and spend, prospective and existing vendor partnerships, and even short- and long-term company goals, they immediately weaken their position during the procurement process. This consequently leads to an inability to extract the greatest value and a failure to generate necessary cost-savings.

To provide accurate and reliable data, you must perform in-depth and detailed analysis. Conducting transactional tasks such as telecom spend analysis and call profile development – will enable you to put together the necessary data requirements. And, with these in hand, your procurement specialists can create an RFP and go out to tender. 

2. Lack of Industry Experience

In the 21st century, the telecom market is ever-evolving. With the constant stream of new technologies entering the market, only those who work within telecoms on a near-daily basis can ever truly understand its nuance.

Your in-house procurement teams 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 can be a nigh-on impossible task.

To gain expert telecom insight, organizations must procure the services of those with long-standing ties to the telecom industry and a true understanding of the characteristics of the technology and services present therein.

3. Failure to Engage Stakeholders

Stakeholder engagement is a delicate matter. Perhaps unsurprisingly, contract procurement isn't everyone’s cup of tea, and it can prove difficult to capture a stakeholder's imagination when discussing data collection, RFPs, and contract negotiations.

Managing stakeholder expectations, however, is one of the keys to procurement success, and prioritizing the cost-savings that are generated as a result is the best method of keeping them on-board. 

To ensure this information is expressed as coherently as possible, your procurement teams should create detailed reports that provide insight into the facts and figures underpinning the sourcing process. Clear information will provide the best possible chance of obtaining stakeholder sign-off. 

4. Global Delivery Deficit

As technology advances, the world shrinks. More and more enterprises are describing themselves as having a global presence – and they no longer just mean America and Europe. The APAC market is expanding rapidly, and to take advantage of the rise, companies need their telecom contracts manageable on all continents.

Although vendors are becoming increasingly competent at supporting [multi-country telecom installations], the support you need to ensure their success is often far from global.

To alleviate this issue, you need to work alongside a global provider of procurement support. This can help you to ensure that all telecom contract stipulations are honored in full  including those that happen on multiple continents.

5. Spend Creep

The most valuable figure in your procurement team's life is the bottom line. They operate within a cost-saving bubble, and their value stems from an ability to generate your company savings.

Spend creep is a common problem for procurement managers. It's a phenomenon that occurs without observation, and even when errors or over-charges are small, if they remain unnoticed over an extended period, they quickly add up to vast sums.

To effectively counter spend creep, your procurement teams must ensure due diligence is paid toward telecom vendors to honor contract terms and conditions. This is achieved by making sure your team have the capability to audit every line item of every invoice before they enter into a contract. If a disparity is only noted mid-way through a contract period, the incurred costs could be huge. 

The Solution to Sourcing Challenges

As the number of available technologies continues to grow, the race is on to find a solution that best meets your organization's needs. Possessing keen insight into the telecom sphere, a telecom expense management (TEM) provider can help you overcome many of the hurdles you’re likely to face.

When it comes to putting together requirements and going out to bid, TEM vendors can collate all the necessary information so that you have everything you need at your disposal to ensure all contract stipulations are honored. What's more, with visibility into many vendors and a deep understanding of what they are really willing to give, TEM providers are perfectly placed to help you access accurate data and generate reports, sharing valuable insight at every stage. 

According to Gartner, Cass Telecom is the only publicly-traded vendor with the delivery capabilities to support sourcing projects on a global basis. With over 60 years of experience in delivering expense management services and over $50B in spend under management, Cass is the procurement expert in the telecom arena, offering unmatched reliability, experience and insight. 

To speak with a Cass specialist and discover how we can help with your procurement challenges, get in touch, or, for a comprehensive insight into the current TEM market, download the Gartner 2018 Market Guide.

Gartner 2018 TEM Market Guide

Topics: Sourcing

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