Maintaining a healthy business relationship between telecom carriers and their clients requires both organizations to work as partners to achieve their individual goals―the buyer’s goal is to get the best service at the lowest price, while the carrier’s goal is to keep revenue without eroding profit margins.
NEGOTIATING NEW TELECOM CONTRACTS
As you prepare to renew an existing telecom contract or are considering a new partnership all together, here a few things to keep in mind when negotiating your telecom contract’s terms and conditions:
- Setting the commitment level too high (at or near your current spend level). This will inevitably cause you to look for additional spend to throw towards the agreement regardless of price points and whether it aligns with business needs or be forced to accept a less favorable extension if you fall short.
- Non-concurrent contract terms sharing a combined commitment level. This makes it very difficult to shop for individual telecom services since doing so can force you into a shortfall.
- Placing individual components of a service on separate agreements. Carriers will sometimes place Ports and Access on separate non-associated agreements, making it more difficult to leave their network.
- Leveraging ‘cozy‘ relationships. After contracting with a carrier, relationships form and vendors may take this as an opportunity to pass through less than competitive pricing
- Burning the clock. The clock is always on the carrier’s side―unless you take control. Don’t let incumbents delay negotiations and be sure to allow yourself time to migrate to a new provider prior to contract expiration.
- Tie the issuance of billing error credits to a contract extension; you need to keep these two issues separate.
- Withholding critical information necessary to go to market.
Individually these issues are relatively easy to resolve, but if you let them become combined or compounded over time, the situation can become challenging and the longer you wait to take control, the worse it could become. Don’t be caught off guard. Prepare and document a telecom sourcing strategy capable of servicing your organizational needs―and don’t forget, pricing is just one part of negotiations, consider your options and allow yourself time to manage the process.
Over the next several months I will be blogging on various telecom procurement topics to provide a good roadmap for obtaining world class agreements with your vendors.
Whether or not you are renewing a contract or negotiating a new one, Ecova’s Telecom Lifecycle Management solutions offer support in all areas of running your telecom network.
Watch the Strategic Telecom Sourcing webinar to learn more about winning strategies for optimal telecom contract pricing and terms. In this recording GameStop shares how this approach helped them achieve over $1.5 million in annual telecom savings. Featuring special guest presenters from AOTMP & GameStop.