Telecom Sourcing and Procurement: Back to Basics
As a Sourcing and Procurement professional in telecoms, understanding the market place to identify vendors based on your business requirements with your specific telecom product and service types is crucial.
Whether you’re sourcing a one-off solution or large scale RFP the fundamentals of this activity involve:
1. understanding your business requirements
2. identifying vendors which can meet your business needs in a cost-effective manner and deliver a quality performing solution that works.
Gathering business requirements will be the key to your success in sourcing a solution that meets or exceeds your business expectations.
Your project office, engineering team or service delivery colleague should provide you with a detailed overview of the solution technical requirements which should include the service type i.e. MPLS, Leased Line, T1, bandwidth, network interface type, diversity, latency requirements and expected SLAs and KPIs etc.
These requirements have been engineered to consider the office applications, headcount, latency, replication network specifications and potential future state design of the network.
*Don’t be surprised when you’re asked to go to market for more than 1 solution or multiple times.
Typically, engineers will design solutions which can be delivered across several different technical solutions and will request multiple options to understand how the design can be delivered and the respective costs, equipment and SLAs associated with the overall design. Keep in mind in the back of their mind, they have an optimum solution and are thinking through the overhead it will take to manage the solution once delivered.
Go to Market →
Now that you have the requirements defined, your next task is to construct an RFP or carrier quote.
A key element here is to construct the data in a logical organized way such that you can effectively analyze and score the vendor responses. Our recommendation is to use a tool like temforce’s RFP utility or Request tool but assuming you’re using a spreadsheet or word doc layout the requirements by breaking them down into multiple spreadsheets or multiple sections detailing each element of your requirements.
For example, start out with an overall high-level summary of your business and the objective of your RFP or in the case of a one off Quote Request a tight summary of the requirement containing the specifics.
RFP Outline Layout Example
1 – Organization Background
2 – RFP Goals and Objectives
3 – Technical Requirements
-
- Network Homing
- Diversity
- Traffic Restrictions
- Egress Queuing
- Supported VOIP Protocols
- And so on..
4 – Service delivery SLA information
-
- Monthly service availability – expected monthly up time 99.XXX%
- Time to repair – expected break fix 1 hour 2 hours 4 hour
- Specific site SLAs – Core site, Branch office
- QOS performance KPIs, – Jitter, Packet Delivery, Latency
- Delivery Targets
5 – Commercials (captured in excel)
-
- Port
- Access
- Local Loop
- IXC
- VOIP Channel
- Cost Per Minute
and so on ….
*Helpful Tip – if you’re running an RFP this is your chance to really gather some useful data and assess the going market rate. Break the pricing down into each element and we suggest going as far as requesting the price for each pricing component i.e. Access, Port, Management, CPM, VOIP Channel Cost etc. on separate tabs. When performing an RFP, it’s ok to request pricing for bandwidths over and above your current business requirement. i.e. say your MPLS port bandwidth today is 4Meg request pricing from 2 – 100.
Detail your business requirements and provide an area for the carrier to respond with for example “Comply, or Do Not meet Requirements.” Include an area for the carrier to provide additional comments if necessary. Depending on the type of quote or RFP you’ll need to include inventory information such as location details, required bandwidth, voice usage, mobile usage, required SLAs etc.
Who should receive the RFP?
Deciding which vendors to send the RFP or quote does require some thought. Ideally you should include vendors that you have a business relationship with already today or perhaps a carrier that you’ve met before and has network coverage or the technical capabilities to meet your overall business needs.
A few supplier considerations to think though:
- vendor network footprint do they have the network reach or deliver via NNI relationships
- financial strength are they financially healthy and viable
- pricing – are they market competitive
- network performance history – do they provide reliable service
- account management strength – are they proactive, reactive or MIA to your business needs
- invoicing – can they provide a correct error free invoice
- are they an existing customer of your business
Structure your RFP pricing to capture the necessary elements of a data request regards of the technology type i.e. leased line vs. MPLS as switched on carrier rep will understand which elements to complete to return the quote back to you.
Run a quick analysis to access, the average, MIN, MAX price across the suppliers to benchmark their price against each other. (Note: Assuming you have MPLS your carrier contract schedule should contain your PORT cost and on-net access so start there first.)
Received Responses: ←
As the responses are returned use this information to score whether the carrier can effectively deliver against your technical needs. In the perfect world, a “simple one off” request is a lot simpler to analyze. Ideally the requirements you’ve outlined are exactly what the carriers have responded to. Therefore, analyzing the commercials is what you can focus on.
If you’ve developed an RFP, establish a scoring metric from say 1-5 or 1-10 with an agreed spectrum of high and low and establish a process where each respective team has an owner that will be responsible for scoring their identified area. For example, have your Service Delivery team focus on scoring the SLAs and KPIs, and Engineering score the technical elements.
*Helpful Tip: try to avoid providing the teams with the commercials as everyone will focus on the cost and this may influence how one vendor is scored. Set a timeframe for when the responses are due and give yourself enough to review and digest each proposal and generate an overall summary. Make sure you read the executive summary as this provides a brief overview of the understanding of the RFP and their respective response. Often the Executive Summary is where carriers will highlight their view of the benefits of selecting them and any deal benefits credits, discounts etc.
Making an Informed Decision
As you move towards a decision to award the RFP prepare a nice tight summary of the RFP. Within the RFP summary include information like:
- The high-level overview of the RFP objectives and goals
- Identify the internal team who participated and the role they played
- Summarize who the RFP was sent to
- Outline the criteria used to score the RFP – consider including a category weight across each respective area. i.e. Service Delivery, Technical, Commercials etc.
- Summarize the vendor commercials
Finally you’ll want to role this up into the recommended vendor solution outlining the reasons why and detail the next steps which might include, shortlist down selection, preliminary vendor negotiations for BAFO, contract negotiations, etc.
There’s a lot to consider and put together as you submit an RFP or Quote to the market however, taking a step back to think through your approach to the RFP will help to ensure you haven’t missed anything big. Using a solution like temforce will shorten the amount of effort and time spent in preparing, analyzing, summarizing, and awarding your next telecom Quote or RFP.
Temforce – Category Management SaaS enables teams to manage their Telecom, IT Categories and Suppliers through 1 easy to use application.