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. To keep from escalating overhead, practice efficient and proactive management by preparing a detailed Request for Proposal (RFP).
An RFP process can indeed take an investment of time and effort. However, 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 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, you need an RFP.
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 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. Therefore, vendors know the purpose of an RFP and provide their most aggressive pricing 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, leading 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 to other bidders 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, including pricing, depending on your bidding format.
- Updated Technology: What you may not be shocked to know is that technology is constantly advancing. 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. You may be surprised to know 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 deciding to upgrade your infrastructure, right-sizing, or both.
Tips for Executing a Successful RFP:
- Before kicking off the initiative, sure you have the time and personnel. 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 regularly and have discovered efficiencies that can help streamline the process.
- Include all stakeholders from the beginning of the process. Stakeholder alignment and engagement are vital to addressing your needs and ultimately deciding what action to take.
- Structuring an RFP is an important step in the telecom procurement process. The more detail you can include in your RFP, the more likely you will get your company’s needs. Doing so will add direction to your efforts. 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.
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