Negotiating Contracts Without Benchmarking Means Leaving Money on the Table!
Negotiating Contracts Without Benchmarking Means Leaving Money on the Table
The process of enterprise telecom sourcing and contract negotiations is time consuming. It can also be frustrating, leaving you with a sense that you could have negotiated a better deal for your organization. Often this is due to going into the negotiations without enough information on your side to effectively navigate through all the twists and turns many vendors will throw your way.
Much of that information comes in the form of benchmarking: data that allows you to compare your services and costs against the best practices of other similar companies in the industry. Telecom sourcing without solid benchmarking data to back up your efforts gives an automatic advantage to the vendor.
Identifying exactly what you need, who can best provide it, and what you should expect to pay isn't trivial. You may have a working knowledge of vendors and service plans in-house. But you need more accurate "unbiased" benchmarking to arrive at a realistic comparison between your rates and terms and the best ones available for similar services in your market.
Less Benchmark Data = Less Negotiation Power
Taking the time to collect solid, accurate benchmarking will pay dividends in these key areas:
- Clarity and visibility into your current spend
- Knowledge as to how your costs for services compare to market rates
- Provide ammunition to negotiate based upon facts, not assumptions
- Obtain the best possible rate for the desired level of service
Don't make the mistake of leaving your contracts on "auto-pilot"
Avoid over-committing on agreements that leave you "handcuffed" to contracts that have stopped delivering value. It's easy to leave contracts on "auto-pilot". You are busy, you have a department to run, and you don't have the luxury of time to spend collecting data and analyzing it. Even if you did, the process itself requires a certain set of skills and access to information that few organizations have in house.
Benchmarking and sourcing can be successfully handled through a third party expert with the experience, data and leverage to optimize your sourcing efforts.
Ask your TEM provider to help. They should have the information and skill level needed to handle your benchmarking, sourcing and, above all, contract negotiations. Furthermore, they should have in depth knowledge of your infrastructure and be able to quickly grasp what your organization needs to support it. If they don't, it might be time to find a new TEM provider.