Enterprise business stakeholders tell us they’re not often asked for input about telecoms and mobility (T&M) sourcing practices. When they are, they’re likely to be more accepting of new practices related to standardization on specific technology platforms, and designation of a preferred service provider.
Sourcing and vendor management (SVM) executives need to ask for and then demonstrate they’ve listened to input and feedback from the business leadership. Forrester recommends conducting periodic high level interviews with key business stakeholders, and also surveying a small sample of representative business managers in regional sales, marketing, business operations, and finance departments about a) their top two or three business and technology challenges, b) how they are addressing them directly already or want help addressing during the next 12 months, and c) their interest in being updated about telecoms and mobility related activities including sourcing.
All user companies with distributed business operations see high value in network and telecoms technologies in enabling business initiatives. For example, our Q1 2013 Forrsights survey of 194 business decision-makers at North American and European firms with 1,000 or more employees found that more than four in five of the respondents considered telecom technologies important or very important to a) enable users in their organization to ‘gather better business information’ (85%); ‘support overall employee productivity’ (84%); and ‘empower closer engagement’ (81%).
We’re seeing an increasing interest by Forrester’s enterprise clients to issue RFPs for telecom services. In a review of customer interviews for a Forrester Wave™ study published earlier this year, we learned that just one in five reference customers didn’t expect to issue an RFP for those services when their current contract comes due; more than three times as many expect to do so. The most often cited reasons for issuing an RFP for network and telecom services include:
· An expired or soon to expire large-scale service contract. When a big contract is approaching expiration, it’s always an opportunity to rethink your overall sourcing strategy for telecoms. Do you want to benchmark the incumbent on pricing models and service delivery alternatives? Do you think you might be better served by multisourcing where you sole-sourced before, or challenging the incumbent to defend their turf against transfer of more of your wallet to another, possibly smaller and lower-margin provider you’re using already for backup or other services? “We haven’t done an RFP for these services since I can remember – maybe 12 years. The provider is also a big customer of ours. But other providers also are big customers. They do a good job, but we’re probably paying too much (a financial services firm).”
Brownlee Thomas, Ph.D., Dan Bieler, Henning Dransfeld, Ph.D., Bryan Wang, Clement Teo, Fred Giron, Michele Pelino, Ed Ferrara, Chris Sherman, Jennifer Belissent, Ph.D.
Orange Business Services (Orange) hosted its annual analyst event in Paris July 9th & 10th. Our main observations are:
Orange accelerates programmes to get through tough market conditions. Orange’s’ vision in 2013 is essentially the same as the one communicated last year (http://blogs.forrester.com/dan_bieler/12-08-24-orange_business_services_...). However, new CEO Thierry Bonhomme is accelerating cost saving and cloud initiatives in light of tough global market conditions. The core portfolio was presented as connectivity, cloud services, communication-enable applications, as well as new workspace (i.e., mobile management and communication apps).
Telecommunications and mobility (T&M) technologies will play a critical role in the success of geographically distributed companies during the next ten years. Business professionals need their IT organizations to keep pace with their requirements related to globalization, virtualization, and bring-your-own technology. At the same time, the demand for unified communications (UC), collaboration (including room-based telepresence and desktop and video), and mobility is exploding (both in and out of the office). These business technology trends create a vortex of new challenges for business technology/IT sourcing and vendor management (SVM) professionals, who will need new skills to keep pace with everything from crafting technical and service-level specifications in RFPs covering multiple services to negotiating and governing complex service contracts to managing overlapping and interrelated vendor relationships.
Forrester’s Telecommunications and Mobility Sourcing Playbook provides insights about the "art" and the "science" of T&M sourcing in the rapidly changing technology environment. It explores the interplay of trends in technology adoption and management and also provides tactical advice for SVM pros regarding how-to build and review/revise your corporate sourcing strategy regarding advanced communications applications such as unified communications and collaboration, including accessibility using corporate-liable and personal (BYOD) connected mobile devices, selecting vendors and service providers, and achieving continuous improvement beyond cost savings.
Customers Have A Range Of Strong Options In This Mature Service Category
In Forrester's latest deep-dive Forrester Wave™ evaluation of facilities-based managed global MPLS service providers, we identified and qualified 11 major international network operators that offer fully managed on-net MPLS wide-area networking services to multinational user companies. Our report details our evaluation of AT&T, BT Global Services, Cable & Wireless Worldwide, Level 3 Communications, NTT Communications, Orange Business Services, Sprint, T-Systems, Tata Communications, Telefónica, and Verizon. The aim of our evaluation is to help enterprise telecom sourcing and vendor management (SVM) professionals select the right supplier(s) for provider-managed multiregional/global MPLS VPN services. In this very mature service category, barriers to entry are low; as a result, key differentiators are increasingly limited but they emphasize delivery scale, flexibility, and overseas local “badged” technical and administrative support capabilities. Each provider has particular strengths, which bodes well for distributed enterprises seeking new choices for both primary and backup third-party managed WAN services.
The key differentiators we identified are global delivery scale of on-net, facilities based MPLS service including provider managed customer edge routers; flexibility of their network, services, and pricing; and technical and technical and commercial support capabilities.
We thoroughly researched, analyzed, and scored them across 55 high-level evaluation criteria related to their current offer, strategy, and market presence:
Last week I attended Enterprise Connect 2013 where I had over two dozen one-on-one briefings with UC technology and services vendors. Highlights included Microsoft’s keynote by Derek Burney (Corporate VP, Skype Division) the content of which was almost entirely live-demos of Lync mobile and room-based video conferencing run on Lync Online (including using several mobile devices, not all Windows OS, with Smart’s Lync room screens – which performed better that at the Smart booth). The very heavy load on the venue’s Wi-Fi network (which the Cisco keynote demo suffered from the previous day) made the performance particularly impressive. [NB: Funny how comms’ folk are still impressed when the technology performs before a live audience the way it did in the lab.]
Another noteworthy demo was BT Conferencing and Dolby’s demo of very high quality sound-around audioconferencing. This was impressive due to the amount of time most of us spend on audioconferencing or videoconferencing calls where it’s near impossible for a remote attendee to break in, and where side-bar conversations in a meeting room are typically mostly or entirely lost. Moreover, it works equally well with a cheap headphone ($30 models actually work probably better than much more expensive ones that might cause ‘interference’ on the line) – and on Apple as well as Windows devices.
Dan Bieler, Brownlee Thomas, Frederic Giron, Stefan Ried, Chris Mines, Pascal Matzke, Jennifer Belissent
T-Systems hosted its 2012 analyst & sourcing advisor event recently. To be sure, T-Systems remains one of the most advanced true ICT providers in the European market. But T-Systems ought to demonstrate more clearly how it can support and enhance business process for its customers and improve the customer experience for its customers’ customers. Of course T-Systems is not alone. The ICT industry needs to emphasize proven capabilities in delivering enterprise-grade ICT solutions ranging from co-management of infrastructure resources to full outsourcing.
T-Systems, like many of its competitors, is busy making sure that it doesn't bleed too much in what T-Systems calls the red ocean, i.e.: the highly competitive market segment of legacy services. That's a good start. At the event, T-Systems very clearly communicated the progress at its internal production factory. This aspect is critical for streamlining and standardizing the portfolio, boosting margins, and developing products and services that the revamped sales team then can actually sell. One tangible outcome of this effort shows through in the high customer-satisfaction level and deal wins like BAT, OMG, and Georg Fischer. Importantly, T-Systems also has put in place a rigorous certification framework for ensuring quality of service with suppliers.
However, T-Systems still needs to convince in areas of the blue ocean, i.e.: the emerging innovative market segment. Like many of its competitors, T-Systems is not finding this easy. Why? Because T-Systems continues to prop up its legacy business: selling technology solutions.
SoftBank plans to inject $20 billion ($12 billion cash and $8 billion of new capital) to acquire 70% of Sprint Nextel. The deal will give Sprint about $8 billion in new capital, which will be used to complete its Network Vision network modernization strategy that will be completed in 2013. The deal gives SoftBank direct access to the much larger US wireless market and also boosts its 2.5/2.6 GHz TD-LTE 4G carrier ecosystem (the 2.5/2.6 GHz spectrum band also is licensed by Clearwire in the US, and Clearwire is 45% owned by Sprint). In addition, Sprint said previously that the devices running on its own FDD-LTE 4G network also run on TD-LTE, allowing it to offload customer traffic onto Clearwire’s network as needed. SoftBank claims that the deal, for which no regulatory or shareholder obstacles are expected, will close by mid-2013 and will make it the No. 3 mobile operator in the world, with $32 billion in revenues after Verizon with $37 billion and China Mobile with $43 billion, and just ahead of AT&T, also with about $32 billion, and Vodafone with about $31 billion. It also will have 96 million subscribers in the US and Japan.
I recently had several one-on-one meetings with SVM professionals at two Forrester SVM forums — in Vegas late May and Paris mid-June.
One major pain point was mentioned by a number of our clients: Why are those so-called global service providers so bad at working with local PTTs to get circuits upgraded? And what can we do about it?
This question has never gone entirely away during my 15 years at Forrester working with IT/SVM professionals. However, during the past 18 months, it's being raised regularly, and irrespective of who the client's global telecom provider happens to be, including all of the big four (AT&T, BT, Orange, Verizon). Additionally, this is unlikely to change as the larger operators increasingly automate their customer service and managed-WAN monitoring and ticketing systems and also try to impose them on foreign operators. It should be possible, however, to improve predictability about change management timelines and new service lead times by working either via your firm's local IT and SVM team or, alternatively, with a local telecom agent third-party contracted to work with local exchange carriers in an important market for your business.
SVM pros often are tasked with facilitating formal and informal discussions between IT operations and business stakeholders for input and feedback when attempting to evaluate and refine a strategy for new communications technology decisions and sourcing. Comms technology planning and sourcing should be centralized within IT in order to avoid islands of investments by business decision-makers who don’t want to wait for IT to work through a lengthy evaluation process that they’re not even involved in.
However, given the escalating pace of communications technology evolution (e.g., the iPad phenomenon), it’s more important than ever before to take measures to ensure an open dialog between the businesses and IT, specifically about new technology evaluations, testing, and proof-of-concept trials with vendors that IT is undertaking within its operational labs or on behalf of a division. SVM also can facilitate regular discussions between business stakeholders that include sharing lessons learned from recent proof-of-concept and pilot activities, etc.
Moreover, because telephony and mobility technologies and services in many distributed companies typically are provisioned by local market GMs, centralized IT SVM organizations often struggle to get some control over sourcing practices for the associated services. SVM, regardless of its mandate from IT’s steering committee, has to deal with more and more instances of self-provisioning by business leaders that bypass established processes.