Insight Article: Five Key Factors for Successful Network and Telecoms Procurement
TNC has been helping organisations execute successful network and telecoms procurement processes for more than 15 years. In that time TNC has seen the full range of the good, the bad, and the ugly. Through these processes, TNC has come to see 5 key factors that consistently arise as being essential to ensure an efficient process and an optimum outcome. Of course, there are other items of influence but in TNC’s experience these 5 key factors are not only fundamental, but they can often be overlooked in some processes or by some organisations – whether this is through a lack of experience/exposure to the specific category or in the hope that some of these steps can be ignored or incorporated into another part of the process.
Sadly, the reality is that trying to ignore these 5 key factors, or hoping they can be addressed elsewhere in the process, almost always results in sub-optimal outcomes.
So, in the spirit of a New Year’s Resolution, in this article we set out these 5 key factors and our guide to how best to address them, so you can make sure your next procurement process delivers the best possible results.
Let’s start with Key Factor 1 – a factor that some organisations hope they can shortcut by running an “iterative” process:
Key Factor 1: Requirements and Strategic Planning
For TNC, requirements gathering is an essential pre-requisite to running an efficient procurement process. Attempting to buy a service without setting out what your expectations are for that service is at best inefficient but at worse can add:
- significant delay
- the need to restart or rerun key process steps
- engagement with the wrong suppliers
- engagement for the wrong services
- ultimately procurement of the wrong services and/or from the wrong supplier
Most organisations recognise that they need to conduct requirements gathering but the key is the depth to which this is done, and the amount of time given to this. For simple like-for-like procurements, requirements gathering should be straightforward but, as technological dependence increases across an organisation over time, even for these more simple processes, it is essential that this stage is not overlooked for fear of missing a vital evolution of requirements. For more in-depth procurements, particularly where the service is new, complex (e.g., contact centre) or significantly changing (e.g. MPLS=> SD-WAN) then a simple data gathering exercise is not sufficient and instead strategy development is strongly recommended.
Occasionally organisations, perhaps due to circumstances, will have pressure to complete a procurement quickly and may believe that they can skip or shorten requirements gathering and/or ignore strategy development – the hope is that this can be done iteratively during the procurement process. In reality, for simple services and smaller organisations this may occasionally be possible. However, the reality is that even in those simple scenarios, this approach runs into the same risks mentioned above, and these risks increase exponentially as the complexity of the organisation or service increases.
Unfortunately, where these risks materialise as significant impediments this may result in a worst-case scenario where the process (or parts of the process) need to be repeated but to the depth initially rejected. Thus, the perception that time could be saved by shortcutting best practise results is almost always erroneous as that time is wasted, the buying organisation would have been better off if they had started the full process at the beginning rather than after the failed attempted short cut.
Key Factor 2 – Supplier Selection and Engagement
Ensuring you engage with right suppliers from the start of your process is essential. Again, this is in part driven by understanding requirements and particularly if there are red lines and/or “cultural fit” requirements – specifically one of the common requirements is the size of the supplier in relation to the buying organisation. In TNC’s experience, many organisations want to ensure they are of significant size to be material to the supplier but not too big such that the supplier struggles to service them.
A key issue here is that many organisations often don’t fully understand the market – relying instead on traditional or historic knowledge that may be out of date, or only engaging those suppliers that have been proactive in engaging with them. The result is that organisations may not engage with the most capable or appropriate suppliers that could best meet their requirements. Having intimate knowledge of the market is vital to inviting the right suppliers into a process.
Beyond the invitation of a supplier is how to ensure that the supplier takes part in the process. Suppliers invest considerable time and money in taking part in a bid process and, as such, they are increasingly considering carefully how they deploy their finite resources. Suppliers will want to ensure that they feel they have a good chance of winning a process and that they are not just “making up the numbers”. Organisations thus need to ensure the process is fair and transparent and they invest time with each supplier. Many suppliers would love to have months of pre-engagement and to have time with different parts of an organisation (including execs) prior to any procurement process but unfortunately it is very rare that organisations have the time to do this across multiple suppliers. As such there needs to be a balance struck and like with requirements development, the time invested at the beginning often pays dividends in ensuring all the suppliers that the organisations want to take part in the procurement process choose to do so and choose to do so in a meaningful way (again, the more complex the requirement/service, the more important this supplier engagement becomes.)
In reality, limited or zero engagement with potentially suppliers prior to the process leads to either no-bids, low quality bids, or even suppliers standing down. Suppliers will be balancing finite resources across opportunities, and they will prioritise those opportunities that they fell they have the best chance of winning and one key factor in their win chance assessment will be customer engagement.
Key Factor 3 – Governance
Of course, governance is often considered the most boring and time-wasting activity in any project, and that’s no different in your procurement processes. However, the reality is that it is essential for the efficiency of a process and to ensure full and timely engagement (whether for requirements gathering, strategy planning, supplier engagement or process optimisation (meeting availability, scoring/reviewing documentation, decision making).
In TNC’s experience, one of the key markers in any failing procurement process is a lack of effective governance, and particularly a lack of engagement from more senior stakeholders.
Key Factor 4 – Executive Engagement
This is vital throughout the process and, whilst executive time is recognised as being difficult to obtain, it is nevertheless essential that this is secured even if briefly throughout the process.
At the outset it is essential that executive input to the strategy/requirements gathering is included. Everyone wants to avoid the pain of finding out at the latter stages of a process that the executive’s requirements are not being met (as they weren’t known) or that they wish to veto a particular supplier. Executive engagement throughout the process can also ensure all members of the organisation’s team are focussed on the process and in addition executive involvement with suppliers will ensure their focus too. As the process develops this can also be extended into peer-to-peer supplier engagement both oiling the wheels for final supplier selection and negotiation and also ensuring a good relationship has been formed prior to deployment and service commencement.
Key Factor 5 – Budget
Never ignore the budget! It may sound crazy, but TNC is often amazed how many organisations are procuring services with no real idea of their budget. You wouldn’t buy a sofa that way and buying a global Wide Area Network is no different! Knowing what the budget is, and constantly reviewing the requirements and services against that budget is absolutely imperative to a successful process. It is easy to get carried away when assessing the services on offer only to be latterly restricted by finding out that what the team are hoping to buy can’t be afforded. Indeed, this is often exacerbated by a lack of executive engagement as per Key Factor 4 above.
This ignorance or neglect of the budget means that the buying team then must scale back and right-size their requirements – at best this is time consuming but at worse it may mean the process needs to be rerun or that the best supplier was not considered or previously eliminated.
How We Can Help
TNC runs dozens of these processes every year meaning that we have a unique and intricate knowledge of the market (the products and the suppliers), the most optimal processes, and how to achieve the best outcomes. We’d be happy to discuss with you how we can help you with any process, whether through providing you with subject matter expertise in the background, assisting your procurement specialists sitting side-by-side with them, or running front and centre a process on your behalf.
TNC is completely independent of all service providers – always has been, always will be
About how TNC can help you transform your network and telecoms solutions
Call us, email us or fill in the form to talk to one of our experts. TNC is the leading network and telecoms consultancy, we are here to answer your questions and share our unique industry insights.
Insight, blogs and white papers
Podcast: How To Manage Network Transformation And Optimise Your Business Case
Joining TNC’s podcast host, CEO John Waterhouse, to share her expertise is TNC’s Head of Managed Services, Clare Tyndall.
Insight Article: What Does AI Mean for Your Network?
2024 is going to be the year when AI goes mainstream. We all know this because of the hundreds