Three Main Steps Of The Telecom eprocurement Procedure

When it comes to telecommunications, it normally accounts for a majority of the IT infrastructure costs. The telecom equipment and services come in varied costs and these costs can be minimized to an extent by doing proper planning for procurement procedure. Even the small savings, in a big corporation, can help in saving thousands of dollars.

telecommunications eProcurement

No matter how much experience you are having, negotiating on the large corporate WANs is always a big challenge. It is always due to the complexity involved in the process. The aspects like quality, the length of the transition process and the high costs are not easy to map. So, in order to let your telecom eProcurement process go smoothly, you must be well aware by the different steps involved in the process and should have a proper plan in hands. For your convenience, here we are going to explain the procurement procedure.

Procurement Process in detail

There are mainly three steps in the telecommunications eProcurement procedure, which are:

  • RFP (Request For Proposal Process)

    In this, the products/services are procured by requesting the proposals from the suppliers. Buyers write a telecom RFP on the basis of their business objectives, requirements (products/services they want to buy), budget and more. It is an RFP that lets the suppliers know what the buyer is looking for; clearly it is written, better will be the understanding on the side of the supplier. And, this would let the buyer get attractive offers from the suppliers.

  • Supplier’s Proposal Process

    After receiving a proposal from the buyer and verifying their capability of providing the products/services, the suppliers move further with the process. They introduce their products/services to the buyers, do technical discussions on it and give a response to their RFPs.

    On the basis of all the proposals from the suppliers, the buyer chooses the one that meets his requirements effectively at best prices.

  • Follow-On Purchase Process

    Once both, the buyer and supplier, are satisfied with the contract conditions, the contract is finalized between them. They agree to each others’ conditions and move further with the purchase process.

It’s all that is involved in the telecom eProcurement process. Furthermore, as a buyer, you have the choice of limiting the number of suppliers and qualified suppliers who would be permitted to participate in the procurement procedure.

In order to find the best contracts, the buyers are required to create highly effective RFP. Though many companies prefer writing it themselves or hiring professionals, nowadays the trend of using telecom eProcurement platforms is increasing. Such a platform/software not only helps the buyers in the creation of an effective RFP, but it guides the buyer throughout the procurement procedure.

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Myths Related To Telecom Reverse Auctions

A reverse auction is just opposite to the general auction; in this, the role of buyer and seller are reversed. Contrary to the general auction, the buyer is the organizer in the case of reverse auction and he invites the suppliers to compete for meeting the best purchasing conditions.

teclco-reverse-acution

Reverse eAuction, the term used for electronic reverse auction, is an important part of telco eProcurement, where suppliers compete online to deliver their services/products at best prices. Actually, it has changed the way the business organizations used to select and deal with the suppliers. Telecom reverse auctions act as a negotiation tool; the contracts are finalized by selecting one among the various contract proposals after ensuring that the delivery conditions would be effectively met.

Though reverse auctions are the way to make sourcing process more effective for the buyers and let them have access to the new suppliers but at the same time, it also offers advantages to the suppliers. For an instance, it creates a leveled playing field for the suppliers and offers full transparency of the negotiation process. However, there are some myths related to the telecom reverse auctions. Here are those myths and the reality behind them.

  • Suppliers don’t like the reverse auctions

    Most of the people believe that suppliers do not like reverse auctions. They think so because suppliers need to compete and reduce the prices for their services and products. Well, the reality is non-incumbents like the reverse auctions, provided that the rules are clear to them. No doubt the suppliers need to compete for selling their telco products and services but it also provides them full transparency of the negotiation process.

  • Reverse auctions are used in the case where the main decision variable is price

    It is a common myth that reverse auctions are used only in the case buyers need to reduce their expenses. But in reality, various criteria are defined in the reverse auction, which include average prices, delivery time, warranty periods and some others that influence bid’s final score. It is not only the price, but all purchasing factors are included in the telecom reverse auction procedure.

  • Reverse auctions are not good for buyer-supplier relationship

    It has been believed that reverse auctions do not lead to the healthy buyer-supplier relationships. Well, the relationships are well established when suppliers are clear about the rules and know why they have been selected (as it lets them deliver what is expected from them). And if their services/products are meeting buyer’s requirements and are available at affordable rates then there is no hurdle in the way of buyer-supplier bonding.

If you are planning to organize a telecom reverse auction for completing the sourcing process, then you need to mention your requirements and rules clearly. This would let only the relevant suppliers bid for your auction (who would be interested in delivering their telco services/products as per your recommendations) and you would be able to find the best contracts by creating competition among the suppliers.