Every company should consider the potential savings of negotiating their mobile and telecom contracts that are up for renewal. How much could your organization save by securing lower contractual rates, optimizing pricing structures, and realigning terms to business needs?
If you’re gearing up for procurement processes, there are tangible ways you can land the best deal with competitive prices, favorable terms, and optimized rates. Take it from the company negotiating more than 400 contracts every year — here’s Tangoe’s advice.
Effective negotiations hinge on having a clear understanding of current expenses. Start by developing a comprehensive line-by-line baseline of your existing telecom circuits and mobile devices as well as their costs and your usage. It is only by gaining a full understanding of what your usage and spend looks like today, can you fully assess the potential negotiation risks and opportunities.
As part of this baseline analysis, it is important to analyze these services to determine whether they are being used or should be rightsized to align with current and future needs.
It’s at this point you may have to collaborate with line-of-business leaders to ensure you have a complete picture of telecom service usage and data requirements. Unfortunately, many procurement leaders discover that their telecom and mobile services are grossly misaligned with actual business needs. But look on the bright side: rightsizing unused or underused resources helps reduce costs and align future commitments to actual needs.
When done right, this process will help you right-size your assets and usage with business objectives – validating spending and pinpointing waste, ensuring you don’t commit your organization to unnecessary spending under a new agreement.
After establishing a baseline of your current spending, the next step is to conduct thorough market research into costs. What are the going rates for telecom and mobile services, and how do they compare to your existing rates?
Start by investigating what other providers are offering and obtaining quotes from specific companies. With this data in hand, you can compare your current costs, contract rates, and terms alongside those of any new carriers you’re considering.
While market price intelligence is critical, it is often difficult to obtain and analyze at the level of detail needed to truly assess your current spending environment. In today’s mobile and telecom market, some cost areas are rising while others are declining. For this reason many organizations enlist experts equipped with a comprehensive market price index.
Tangoe’s master rate catalog is built using intelligence gleaned from our database of $34B in tech spending across a comprehensive list of domestic and international service providers. Thanks to the expertise of cost management consultants, our professional negotiators have the needed insight into how low the major carriers will go and how hard you can press them for what you want.
Leveraging your baseline spend and market rate data allows you to calculate the difference between your current cost and your potential cost with market-competitive prices. This exposes how much you might be overspending. At Tangoe, we call this your Gap-to-Market. It represents the dollar value of your savings from bringing your costs in line with today’s market pricing.
While this benchmark exercise identifies what you should be paying for your current services, the reality of mobile and telecom services today is rarely that easy. The telecom landscape is complex, and mobile service offerings are continuously evolving. For that reason, you’ll also need to understand what may be changing in your service environment. That requires staying updated on trends in the telecom and mobility sectors (i.e., new technologies, pricing models, and emerging providers).
Defining and prioritizing the key aspects of your future services provides a firm staring point as you enter the next phase – the negotiations.
As part of the negotiation process, it’s crucial that you understand your company’s bargaining power and develop the leverage you need to conduct a successful negotiation.
As noted, a Request for Proposal (RFP) may be needed to achieve the necessary negotiation leverage or simply to address changing service needs. The RFP should clearly outline your goals for mobile and telecom services, the scope of required services, technical and security specifications, desired pricing structures, project timelines, and other relevant details.
This process can be arduous and complex, which is why many organizations choose to work with a trusted consultant who can manage their RFP, ensuring a smooth process for solicitation, decision-making, and contract negotiation.
Professional saving assessments performed across all of your telecom and mobile service providers.
Real results – on average Tangoe Advisory Services saves companies 20-30% using their proven Contract Negotiation Services.
