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By Marco Kuysten,
Senior Consultant,
Advocate Networks, LLC
On the end-user side, increasing pressure to reduce cost is leading to more and more companies looking to source their communications spend. On the service provider side, the current economic situation has led to workforce right sizing and a careful evaluation of participation in sourcing events. This results in fewer resources, and sometimes reduced eagerness to participate in sourcing events. Running a successful sourcing event (getting the right service providers to participate and achieve savings) takes more effort and planning than it has in the past. These four steps will help in running a successful sourcing event:
The first step is defining the sourcing framework. In the case of an RFP, the sourcing framework is the RFP document, including compliance or a pricing worksheet. The goal is to clearly separate your needs and wants, as well as reducing the burden on both the sender and receiver of the sourcing framework - without skipping the essentials that allow for a successful solution and vendor selection. Just remember that sending a thick sourcing framework usually means receiving multiple even thicker proposals!
The second step is understanding the current situation. What are your current business and communication processes, what services do you currently have, and at what cost? And for infrastructure, what make and model of systems do you have, and what are they currently valued at (i.e. book value)? For contracts, you need to understand your organization's flexibility. When was the contract "start" (not always the execution date), what is the term, what is the commitment, and what part of my current spend is contributory?
The third step is understanding the future state. What type of solution and cost are you willing to accept, and from what vendor? How will it address your business and technical requirements? Understanding the future state should also include understanding, at a high level, how to get from the current to the future state, and defining requirements regarding migration paths, responsibilities, cost and timelines.
The fourth and final step is the sourcing process itself. A sourcing process takes time. An RFP can take anywhere from two to six months depending on scale and complexity. Trying to rush through a sourcing event will result in suboptimal results and errors for all parties involved. On the other hand, a prolonged process may cause a loss of interest in both the marketplace and the internal organization. There is also the point of diminishing returns: at what point does negotiating pricing or service levels not make sense? (Think about the cost of the current network versus the proposed pricing and the material benefits of improved service levels).
The four steps above are the key ingredients needed to run a successful sourcing event. The challenge is to keep every step in balance. How far can you go to get results, without creating burden or diminishing returns? To learn more, please contact Marco Kuysten at (678) 987-5965 or marco.kuysten@advocatenetworks.com.