You can never be too prepared for your next telecom services deal.  Unfortunately, many organizations are underprepared and leave themselves too little time to optimize the outcome of their sourcing and negotiation efforts.  This is nothing new, it has been the same challenge for procurement, IT, and telecom leaders for as long as enterprise communications services have existed.  What has changed, though, are some of the risks and opportunities that are cropping up along the way. 

One of the biggest challenges that comes with managing technology spend is maintaining an awareness of the market as it relates to the company’s requirements.  What’s available?  Who should we buy from?  How do we get from where we are today to where we want to end up?  How do we figure out where we want to end up in the first place?  For most companies these types of questions are only explored every three years or so and having to catch up is never the best place to have to start.  Increasingly, companies are encountering unexpected curveballs when working through their telecom renewals: carriers discontinuing services, not offering discounts on legacy service, or worse raising pricing for legacy service that suits its purpose just fine for the enterprise.

Of course, being prepared in the first place goes a long way in mitigating these risks.  This usually means looking out at least a year before your agreements expire (or when you plan to have met all of your obligations under them).  By doing so, you can become aware of where you may need to begin planning for a change of services and/or carriers.  With your awareness, you’re setting yourself up to translate significant renewal liabilities into opportunities. 

The reason the carriers are digging their heels in on pricing for legacy services is because newer technologies have become available to replace them and the old services are costly to maintain and support.  Account reps are being told to sell the new stuff, not the old stuff.  And that’s reasonable.  Not only are the alternatives typically more robust with expanded capability/functionality, but they’re lower cost and higher margin for the carriers –all positives for you if you can capitalize on them. 
Simply being prepared and taking advantage of these new technologies isn’t all, though.   They represent enormous leverage.  After all, if you’re going to have to move off TDM voice services to SIP anyway, why not see what the other carriers are doing?  If TDM access/loops are going up in price in favor of Ethernet or SD-WAN and you’re going to have to rip out and replace your circuits anyway, there’s no sense in limiting your options to the incumbent. 

If the carriers know you understand the landscape and where things are headed and that instead of being backed into a corner, you’re prepared to take full advantage of your flexibility to explore options at the end of your contract’s term you’ve set yourself up with a very strong and credible negotiation position right from the start.  For help planning and preparing for your next telecom renewal or sourcing event, contact Source One.

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David Pastore

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