Putting Procurement At The Heart Of Mobility

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The term mobility has become synonymous with enhanced productivity. Consequently, this means that every department in the organisation has a vested interest in the selection of an enterprise mobility solution. These departments want to be involved in decision making process in regards to what the enterprise mobility solution looks like, who it is delivered by, when, and how. In addition, the nature of mobile technology requires that legal, HR, and security departments become more involved in purchases.

But as businesses evolve beyond technology-enabled to technology-reliant, who should lead the charge? The term mobility has become synonymous with enhanced productivity. Consequently, this means that every department in the organisation has a vested interest in the selection of an enterprise mobility solution. These departments want to be involved in decision making process in regards to what the enterprise mobility solution looks like, who it is delivered by, when, and how. In addition, the nature of mobile technology requires that legal, HR, and security departments become more involved in these types of purchases.

As businesses evolve beyond technology-enabled to technology-reliant, who should lead?

Why Procurement?

Procurement departments hold the ideal position to serve as the engine of the modern enterprise. As a function, procurement preserves expenditures, equips the business with the tools of its trade, and protects each and every department from scope (and budget) creep. But procurement is typically strongly guided by legal and finance departments (and in technology investments, also by security and IT). However, these departments can sometimes be several steps behind knowing what the real practical needs of the organisation are. Procurement must offer a unified view of the needs and possibilities that exist within the business, and to provide strategic advice on suitable investments.

The Challenges Ahead

The balance of power has shifted dramatically in the telecoms market. Rather than being grateful for the chance to pitch, mobile network operators (MNOs) are now increasingly selective about the opportunities for which they will offer submissions. Their market and revenue streams are constantly changing, putting them under huge profitability pressure and therefore preventing them from pursuing every opportunity that comes their way.

MNOs are well aware how much their pitches are relied upon by procurement departments in order to illustrate that the tender process was well-researched. As a result, MNOs increasingly need to be courted for months in advance to even consider throwing their hats into the ring.

Why are their revenue streams changing so much? The ever-growing use of Over-The-Top (OTT) apps such as WhatsApp, ThreeMa, BlackBerry Messenger, iMessage, and Facebook Messenger has rapidly eaten away at the profit to be gained from SMS, as these apps rely on data, which is far less expensive to the user. Additionally, Apple has recently released a new SIM card for iPads that makes it easier to switch networks, roam at cheaper rates, and enjoy shorter contracts than most MNOs allow.

Nonetheless, while the ways in which MNOs earn money have dried up in recent years, their need to invest in marketing and infrastructure to maintain a competitive advantage (most notably in 4G spectrum) has, if anything, grown even larger.

Against this backdrop, MNOs are scrutinising what they invest time and resources into when considering a bid. However, this leaves procurement in a quandary. If only the incumbent MNO submits a response, how can you negotiate effectively? And how can you be sure that you have performed your role fully and found the best possible deal for the business?

In order to combat these issues and guide the process effectively, Procurement departments need to learn how to lead from a position of strength, facilitated by the right tools and market knowledge. Below are the key rules for procurement in any enterprise mobility procurement.

Be A leader In The Business

Procurement has to act as the single voice of reason among the various business departments involved in the procurement process. It can then lead the selection and investment processes, not just in terms of supplier selection and contracts, but as it relates to mission definition, business objectives and methods of measuring success. Procurement defines what the business is doing and why, what the perceived outcome will be, who is responsible for what, and who owns what aspect of mobility. It is critical that this “clarity of mission” is tightly defined before the RFP process is launched and MNOs are contacted.

Have The Right Toolkit To Deal With Telecoms

Procurement must have more than just a basic awareness of industry essentials, trends and developments in order to select suppliers effectively. These areas will include billing processes, the company’s current and future usage and of course pricing structures. The rapid evolution of the enterprise mobile ecosystem has happened in a shorter length of time than most mobile contracts (2 years), leaving even those with previous telecoms procurement experience over their heads.

Avoid Being Seduced By Exclusivity

At times, an enterprise’s insistence on bespoke solutions at the lowest possible cost can cause frustrations between both parties. Procurement insists on keeping prices down while demanding bespoke products, yet it actually costs MNOs more to tailor their products in order to win the business. Before demanding a bespoke package, procurement can avoid a large amount of potential conflict by ensuring that their demands are realistic. By all means, procurement should challenge an MNO – however the onus is on procurement to know what is technically and practically possible for MNOs to achieve.

There Is More To Mobile Than Minutes & Devices

When introducing a mobility strategy, it’s crucial that the department understands the mobility needs of the business as a whole, because this will impact the viability of a given submission to your particular business. From application strategy, device and application policy to billing structures and expectations, Procurement needs to ensure that the business has thought through all of these preferences. This will enable the department to predict what level of data is needed per employee or user type; what levels of minutes are needed; and what terms need to go into a contract.

Procurement: Guardian Of Company Strategy

With enterprise mobility, procurement has the potential to play a central role not only as custodian of the business purse strings, but also as the guardian of company strategy. Being able to articulate what your business needs and goals are – for the long and short term – is vital in developing a productive mobility relationship with operators, and outlining the best mobility contract possible.

Procurement departments hold the ideal position to serve as the engine of the modern enterprise. As a function, procurement preserves expenditures, equips the business with the tools of its trade, and protects each and every department from scope (and budget) creep. But procurement is typically strongly guided by legal and finance departments (and in technology investments, also by security and IT). These departments can sometimes be several steps behind knowing what the real practical needs of the organisation are. Procurement must offer a unified view of the needs and possibilities that exist within the business, and to provide strategic advice on suitable investments.

David Walker is ‎Vice President, EMEA - Strategic Consulting, at Tangoe.