2/20/2023 0 Comments Networx contract sole source![]() The unprecedented pressure on IT managers to cut costs quickly led many to run to their old friends at the incumbent carriers and hold their cap out. īut in terms of negotiating pricing improvements, in many cases the status quo ante has changed very little. ![]() And in many ways it did-some companies have taken genuinely radical steps to reduce their telecom expenses, such as taking back corporate liable cell phones from their employees and canceling or downsizing services that they can live without. ![]() The economic turmoil of the last year should have shaken the status quo. Why rock the boat when your prices are going down and you are comfortable with the incumbent supplier(s)? Suspicions that your pricing is lagging the market are pushed to the back of your mind as you present the price improvements from the latest contract renewal to a receptive management. ![]() In this environment, there is a danger when you simply sit back and accept periodic moderate pricing reductions from your carriers (which appear to track general pricing trends in the market) without exerting too much effort or seeking to maximize and take advantage of negotiation leverage. A good example of this is the substitution of corporate voice and data mobile services (where margins are high) for traditional landline voice services (where margins are low). Telecom service providers have generally been able to meet the expectation of year-on-year price reductions because their costs have continued to decline and price reductions have been offset (at least in part) by customers buying more bandwidth and new services. Success is often measured not by whether savings are achieved, but by whether the reductions meet a percentage savings target set by management. Price savings in return for contract renewals, or as part of mid-term contract benchmarking exercises, or as the result of a competitive procurement, have become the de facto expectation of IT and procurement departments. Prices for telecom services have been falling for as long as any of us can remember. ![]()
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