The X Factor: The Fine Art of Negotiating Telecom Contracts

Leo Berz

While many organizations have internal resources that understand the nuances of procurement and contract negotiation, looking outside of the organization for assistance has many benefits. Successful telecom sourcing and negotiations require expertise and specialized knowledge in the following areas:

TELECOM TECHNOLOGY

You need to understand exactly what you are shopping for, potential alternatives and options, and which providers have the best offerings for your particular needs.

PRICE BENCHMARKS AND TRENDS

Knowing the ‘going rate’ is not enough, you have to understand where a technology falls within its lifecycle, as pricing can quickly erode as the product matures. Being unfamiliar with these types of issues could result in a long-term agreement with out-of-market rates.

TELECOM CARRIER CONTRACTS

Most telecom contracts, particularly from larger providers, are comprised of multiple documents that make reference to service guides and tariffs which can change numerous times within the term of the agreement, all the while binding you to those changes. Furthermore, these agreements can be very onerous, putting all the liability on the customer. It is critical to understand how these agreements are structured, how to limit your liability, and how flexible a provider might be in agreeing to any change requests.

While the above areas are critical in any contract negotiation, the best reason of all to bring in a qualified independent consultant is what I refer to as the ‘X Factor.’ Understanding the fine art of contract negotiation is their strength; it’s what they do all day.

Organizations that try to negotiate directly with a telecom provider may find themselves at a disadvantage, particularly if the relationship with the provider has been long-term. Using a third party to represent your interests can eliminate the provider’s advantage, resulting in better pricing and business terms. The X Factor also allows the consultant to work with individual telecom bidders on specific areas of the offer that need improvement to win your business.

Ecova’s Telecom Lifecycle Management team is available to answer questions about telecom contract negotiation and procurement.
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