In a previous article I wrote about The Biggest Mistake You Can Make in Managing Your Wide Area Network Budget: waiting too long to negotiate a new agreement. While it's true that time can be the biggest risk factor in managing your wide area network's cost, the are also important levers that can be maximized with the right strategy. The combination of optimizing your timeline and maximizing your leverage with the best practices in this article will help you to ensure the best possible deal you can achieve on your own.

Have a Plan

This may seem a bit trite for some of you, but many organizations truly do not adequately plan their wide area network procurements. Some organizations are more technologically and operationally focused and others simply address the spend on an as needed basis (i.e. when contracts expire). Irrespective, there are some fundamentals that everyone should make sure they understand and are prepared to address. You must know your term, commitments, and your technology road map or WAN future vision. Carriers nowadays often try to get multiple commitment hooks into their customers during the contract process. They want circuit or service commitments, i.e. you will keep a service for a given period of time or else pay an early termination charge. They want a minimum revenue commitment such as a monthly, yearly, or term revenue quota that you must hit or pay a shortfall charge accordingly, and in many cases, they want a mix: you will commit to spend a certain number of dollars for certain services or basket of services throughout the contract period. No matter how successful or unsuccessful you may have been at combating some of these carrier practices during your most recent contract negotiation, you need to be extremely familiar with these commitments and be certain you understand how they may be favorable or unfavorable to you in order to identify and develop your negotiation position.

Minimize Non-contractual Commitments and Integration

Beyond contractual commitments lie more subtle, implicit commitments to your carrier(s) of choice. As you seek to develop your negotiation position, you should be aware of any barriers to changing carriers. Examples would include significant head-end infrastructure builds that would be difficult, costly, and time consuming to replace, heavy network native SIP deployments, or 3rd party integrations (e.g. AWS, Azure, Salesforce, etc.). Of course there are trade-offs -it's much simpler and easier to manage things when there are fewer carriers involved, but you compromise your ability to change carriers so finding a balance is important.

Decrease Loyalty and Introduce Competition

Stemming off of the idea of diversifying where possible/reasonable without unnecessarily complicating your operation, consistently testing your primary incumbent carrier(s) by bidding elements of business is a great way to keep them honest and on their toes. Need to replace or introduce a new Internet circuit? Why not shop around? Need to connect a new location to your private network? Maybe a private line or VPN would suffice instead of an MPLS link. Allowing your incumbent to bid and lose some of these opportunities goes an extremely long way in making them realize your business is not a foregone conclusion.

Leave Yourself Time

If you take only one thing away from this blog it's that you need to leave yourself time. It takes time to develop a plan for a renewal or procurement. It also takes time to develop a future vision for your network. And most of all -and the carriers know this best- it takes a lot of time to rip out and replace what they have installed. The instant you cross the threshold of what can be reasonably accomplished before you come off contract, you lose an incredible amount of leverage in your negotiations.

Bring It Together

Taking advantage of these best practices will undoubtedly yield dividends in your new agreement with your incumbent or an alternate carrier. But don't mistake these ideas as something you do only when you're getting ready to go to market or begin a negotiation. You should be consistently revisiting and managing around these ideas and in doing so, managing and reducing cost will become less painful and yield better, more consistent results then scrambling to catch up each go around. Getting started is the hardest part, for help getting your arms around your spend and developing and executing a sourcing strategy that will result in more robust infrastructure at a lower cost, contact us at
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David Pastore

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