When I interviewed clients for a recent telecom sourcing best practices report, I heard a recurring refrain: “We need to drive down costs.” Both CIOs and sourcing and vendor management (SVM) professionals measure the health of their department with the amount of annual cost savings they can achieve. While this is a laudable metric, over time it can skew SVM pros’ perspectives and cause them to miss an opportunity to provide value to the business in the form of a vital “always-on” service.
SVM pros should:
- Accept that cost savings are limited and short-term. Telecommunications is highly regulated in Asia Pacific; local competition is limited and governments own significant stakes in incumbent telcos. While cost savings can be had, they will diminish over the lifespan of a contract. SVM pros must understand how to work with lines of business and suppliers to create more value for the organization.
- Focus instead on always-on service availability. Firms must focus on the fundamentals: ensuring that their communications services push toward always-on service availability. Getting the right price for services is important, but SVM pros in Asia Pacific must align business needs to service sourcing and ensure that the service delivers the expected value in terms of availability and quality.
- Engender trust with providers with long-term commitments. View service providers as long-term partners; this will take the uncertainty out of the relationship and engender trust. One company was happy to lock in a five-year rental with an equipment supplier, eliminating a source of business risk in a volatile Asian economy. Focusing on long-term contracts gives providers the impetus to serve you well.
What It Means
Communications sourcing is all about providing a “dial tone” for the business; nowhere is this more acute than for front-line employees who require always-on service availability in their moment of need. By making it onerous for employees, for example, to roam on their mobile phones, SVM pros put the company at risk of losing potential business deals at critical junctures.
Already, companies in North America and Europe are keen to learn how to optimize telecom and mobility expense management and compare TEM solutions. We see many clients investigating third-party managed services and business process outsourcing for TEM.
While Asia Pacific organizations have yet to show much interest in TEM solutions as part of their management centralization efforts, we believe that SVM professionals who do not provide value beyond cost containment are under threat of seeing their functions outsourced to TEM solution providers such as Dimension Data. For SVM pros, it could be time to re-evaluate how they can support their organizations in the age of the customer.