Special thanks to Source One Management Services for this guest post
Overhead expenses, including telecom costs, can slow or completely sabotage your business success if left unmanaged. You don’t need to fall victim to escalating overhead. Instead, practice efficient and pro-active management by preparing a detailed Request for Proposal (RFP).
It’s true an RFP process can take an investment of time and effort. But drafting a well-designed RFP can put your company in the driver’s seat, helping you control costs by creating healthy competition among vendors. In return, your company will get customized, well-priced bids from telecom vendors who truly want your business.
The same new relationship/established relationship behavior change holds true for telecom vendors. The vendor who makes a great first impression on a customer will inevitably raise prices over time. Acquisition pricing is always better than retention pricing in the telecom industry. If you want to be treated like a new customer and receive the first impression pricing, then you need an RFP.
Still not convinced? Here are three ways an RFP can help yield results when it comes to optimizing your telecommunications infrastructure:
- Pricing: If your contract is coming to an end within the next 2 years, it may be the time to see if better pricing is available. Through an RFP, you’ll receive pricing options from multiple vendors at the same time, in the format you desire. Vendors know the purpose of an RFP, therefore are able to provide their most aggressive pricing available because they want to win your business. However, know that most vendors do not provide their best pricing within the first round. They expect you to negotiate with them for further price savings from the original quote – which leads me to my next point.
- Leverage: It is possible that you might not want to leave your current supplier. If that’s the case, an RFP can be the tool you need to gain leverage for future negotiations as your contract expires with your incumbent. If you’re able to go to your current vendor with insights into the market on pricing trajectories, that may incentivize them to offer you a lower price or other value adds to retain your business. The same applies for other bidders who should be motivated by the competitive bid process to bring a good offer to the table. Of course, always maintain the highest standards of integrity in terms of protecting supplier confidential information, which may include pricing, depending on your bidding format.
- Updated Technology: What you may not be shocked to know is that technology is constantly advancing and, as it is continuously replaced with leading-edge technology, prices are expected to decrease. Cloud and hosted technologies are helping businesses to connect and collaborate better than ever before while reducing dependence on expensive equipment that constantly needs maintenance and updates. What you may be surprised to know is that most companies don’t see a decrease in their telecom spend due to established contracts based on old technology and consumption needs. Running an RFP means not only getting a better view of the market and the newest technology available, but is also an opportunity for your organization to review your needs – whether that means making the decision to upgrade your infrastructure, right-sizing, or both.
As for tips for executing a successful RFP:
- As the RFP process can be time consuming, make sure you have the time and personnel before kicking off the initiative. If you’re tight on both but still want to move forward, consider a third party with the expertise and resources to help you go to market. While you might conduct an RFP once every few years, consultants conduct them on a regular basis and have discovered efficiencies that can help streamline the process.
- Include all stakeholders from the beginning of the process that should be involved in all decisions being made. Stakeholder alignment and engagement is vital to addressing all of your needs and ultimately deciding what action to take.
- Structuring an RFP is an important step in the telecom procurement process. The more detail that you can include in your RFP, the more likely you will get what your company needs. It will add direction to your efforts and require you to think about and write down your goals and specifications. The RFP can be a roadmap to guide you through the procurement process. Whether you are considering contract renewal or switching vendors, participating in a telecom RFP will definitely be a wise decision.