Telecom Contracts – Friend or Foe?
If you aren’t absolutely certain that your telecom contracts are your best ally in support of your TEM program, then the alternative should be of concern. Contracts are the rule book that defines the critical business side of your telecom management efforts. But vendors work hard to set the rules in their own favor, and they often get away with it. Here are just a few ways they gain the upper hand:
- Shorten the make-good periods on billing disputes
- Weaken their performance SLAs
- Overlook key spending categories for discounts
- Link desired discounts with restrictive encumbrances
- Set unfavorable renewal terms
By changing the balance of power from the vendor to the buyer, it’s a whole new game.
Price Is The Obvious Element
Nearly all carrier negotiations are likely to yield savings, and companies have clearly been benefiting from falling telecom prices for years. But the difference between receiving a market-wide price reduction and winning a best-in-class pricing agreement is truly significant. Pricing trends are volatile, they can’t go down forever, and vendors have tipped their hands in terms of what they want to do in the pricing arena.
Going Six Steps Further
The benefits of best-in-class pricing will be reflected each and every day on your invoices, and that’s important. But the benefits that come from understanding your true network needs, selecting high-performing vendors, establishing appropriate term lengths with exit strategies, leveraging revenue commitments and more will not always be evident on day one. These key aspects of any vendor contract will come into play at critical points down the road, often unexpectedly, and when you most need the help. Don’t be caught short or under-protected. Advantage IQ has the experience and the knowledge to improve your contract environment in the 7 critical areas shown above.
Do It Yourself?
To be fair, we've seen some very good contracts that have been independently negotiated by customers. But we've seen the other side of the coin as well. The chart located to the right shows just a few of the many common pitfalls that companies must deal with when they undertake telecom contracting activities.
Entering into a new contract does not require waiting for the expiration of the old one. After all, would you wait for a mortgage to expire if rates were falling and you could immediately benefit? Read on to understand our position about when to deal with contracts that aren’t ready to expire… and those that are.
Learn More: When to review contracts
Learn More: Advantage IQ Contract Perfromance Services
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