Strategic Sourcing Telecommunications & Telecom Cost Reductions
Telecommunications is one of the largest and poorly managed spend categories at most companies.
Due to its complexity, telecom is notoriously challenging to source. The telecom category is plagued by confusing contracts, disparate spend, interdependencies of services, and minimal time, resource, and subject matter expertise within the organization’s resources. This leads to telecom contract renewals and spend that creeps up over time, even though market pricing is continually decreasing.
Source One has been expertly providing strategic sourcing and procurement services for over twenty years, and we leverage this knowledge and experience when assisting our clients with understanding their telecommunication spend and making decisions about how to better support their business and reduce costs at the same time. Our mature strategic sourcing process allows us to help clients realize superior results within their telecom category in the shortest time possible, including:
- Wide Area Network (WAN) and Internet
- Local and Long Distance Voice Services
- SIP and VOIP
- Telecom Expense Management (TEM) Software
- Hardware Maintenance, Management, and Support
Telecommunications Strategic Sourcing: Data Collection
Every telecommunications strategic sourcing project begins with a thorough data collection process and invoice audit which results in a detailed inventory that identifies all carriers, suppliers and providers; contracts; services; and equipment. Our telecommunications strategic sourcing team manages the data collection process by using templates that have been refined over the past twenty-plus years, and tracks and reports progress until all data has been collected and analyzed.
Telecommunications Strategic Sourcing: Baseline
Once all of the telecom data has been gathered and audited, our telecom sourcing analysts develop a Baseline Report which details the current state of your organization’s telecom spend, including all suppliers, carriers, services, contract terms, equipment, utilization, and configuration. This telecom baseline report includes a gap analysis in technology adoption and vs. the market and future objectives. This telecommunications report allows our telecom sourcing team to ensure a consistent understanding of all current spend so they can make informed recommendations, and fully develop sourcing levers when it comes time to conduct a Request for Proposal (RFP) or negotiate renewals with incumbent suppliers.
Telecommunications Strategic Sourcing: Go To Market
Before conducting a Request for Proposal (RFP), Source One’s telecom strategic sourcing team will collaborate with all interested stakeholders, end users, and key decision makers within the organization to understand current telecommunications project requirements, future objectives, and any pain points within the telecom network that require resolution. Our strategic sourcing team will then segment the telecom project’s requirements within a Scope of Work (SOW) to be included in the RFP that aligns with your organization’s needs based on geographic, industry, financial, management, or other concerns. The due diligence of this planning phase is paramount to ensuring all bids received are complete and consistent for simple comparison during supplier selection.
Once the requirements of the telecom project are understood, our telecom sourcing experts can expediently draft an RFP based on a template that’s been refined over the past twenty-plus years. In parallel with the RFP drafting, our strategic sourcing team will develop a scorecard and weight it according to the importance your organization places on each evaluation criterion. This scorecard facilitates an easy, quantitative comparison of the telecommunication project’s bids.
While the RFP is being written and collaboratively revised, our telecom strategic sourcing team will identify global and niche suppliers that can fulfill your telecom project’s unique requirements while identifying the strengths and risks associated with each. Appropriate supplier identification paves the way to consolidate your telecommunications supply base while maintaining a balance of competition with selected suppliers.
After the RFP has been reviewed and finalized, Source One’s strategic sourcing telecom team will engage suppliers of your choice and motivate them to participate in bidding for the telecommunications business. We will manage gaining responses to their questions, coordinate any necessary on-site meetings, and make sure they are able to provide complete proposals by the deadline.
Once the telecom supplier bids are received, we will produce a Market Assessment report that includes a scorecard analysis, evaluations of each supplier and their proposals, strengths, and weaknesses, and an apples-to-apples comparison of each telecom supplier’s service offering and pricing. This report supports your decision-making process regarding finalist selection and a first round of negotiations, a negotiation process that includes closing gaps in proposals by coaching suppliers on their offering and pricing in order to gain alignment amongst competitive bidders.
Telecommunications Strategic Sourcing: Recommendation
Our telecom sourcing team’s focus is to continually deliver the information needed so your organization can make an informed decision about supplier and technology selections. Throughout the telecommunications strategic sourcing process, our sourcing team aggregates, analyzes, and presents information in a way that makes it easy to understand how various solutions align with your business requirements. This supplementary information assists in telecom projects by helping you assess risk, factor auxiliary and long-term objectives, and produce the necessary total cost of ownership (TCO) analysis to provide a complete and detailed perspective on the decision at hand.
Telecommunications Strategic Sourcing: Implementation & Continuous Improvement
Once your organization has made a decision, our telecom strategic sourcing team will take the lead on completing negotiations of pricing and service levels and the adjustment of boilerplate documents that are ready for your legal team’s review. We collaborate with the telecommunications carriers throughout this process, providing them with anonymous competitive data based on our database of previously negotiated deals and tariff filings. By doing this, our telecom sourcing team is able to expedite the negotiation process, and collaborate with the telecom supplier’s sales team so that the two can smoothly navigate the internal pricing channels and produce pricing that matches the targets we have set.
Our telecom strategic sourcing work is not done when agreements are executed. Our strategic sourcing team stays actively involved in the management of all project implementation activities including scheduling of new service deliveries, decommissioning and disconnecting old services, and auditing invoicing to ensure the carriers remain aligned with the negotiated agreements. This ongoing telecom category management allows us to identify opportunities to take advantage of new technologies, assist in adapting your services to your changing business needs, and provide the reporting that helps you track and report savings and process invoices for payment each month.
Savings Through Telecom Sourcing
A Case Study
The client was a nationwide network of medical facilities that, in the face of an economic downturn, engaged Source One to assist in the streamlining of processes and implementing efficiency improvements throughout its telecommunications category.
Source One’s telecom strategic sourcing team worked with the hospital network across a variety of cost saving projects within their telecommunications category. After an analysis of their telecom inventory revealed that the medical network was reliant on an outdated frame relay architecture, our telecom sourcing team recommended a move to an MPLS network. After negotiating a favorable contract, our telecom team oversaw the implementation of new services and equipment – ensuring better performance, superior interconnectivity, and data prioritization efforts while helping the client realize more than $140,000 in one-time savings and a 31% reduction in month-to-month costs.
Our telecommunications strategic sourcing team also identified a substantial savings within the medical network’s PBX maintenance. By sourcing the maintenance plan, negotiating a new agreement with a maintenance supplier, and uncovering a substantial billing error – in which services were billed for equipment that could not support it – Source One’s telecom strategic sourcing team idenfieid more than $240,000 in savings for PBX maintenance.
Through these and other projects within the telecommunications category and the medical network’s entire budget, Source One’s strategic sourcing team saved the medical network more than $5 million in the initial phase of our engagement. We continue to work with this client in additional phases of projects to this day.
Telecom Strategic Sourcing
Source One’s offers a range of telecom strategic sourcing and cost reduction services, including: