The Telecom Expense Management (TEM) Industry Has to Change Part 3: The Buy & Sell Process
An 8-Part Series
The Telecom Expense Management (TEM) Industry Has to Change
Part Three: The Buy & Sell Process
The TEM Industry has to Change An Eight-Part Article Series
We’ll be publishing these eight articles between September and December 2022. Be sure to subscribe to AOTMP® Insights to be notified of the latest releases.
- So much has changed and yet so much has stayed the same.
- $4+ trillion in products, services, and solutions … a huge industry.
- There is a reason we can’t get more than a handful of $50 million plus TEM providers.
- Why is it that many other industries have gone from nothing to billion-dollar industries … but not TEM?
- The service provider environment – carriers, mobility providers and others.
- Call it technology, cloud, SaaS, network, or anything else … it doesn’t fix the problem.
- Why is there so much churn in this industry?
- We’re stuck in the past – the hamster wheel
- The impact of private equity – what it has helped and what it has not.
- Opportunities are everywhere … for businesses, for vendors and for financial partners.
- Quotes, recommendations, or commitments from our sponsors.
- When will enterprises place value on other aspects of TEM, and not just cost savings?
- Is there value on just having an accurate inventory?
- Is there value on just getting your invoices processed and ready to pay on time?
- Is there value on leveraging the buyer knowledge with seller technology?
- How do vendors better demonstrate value other than hard-dollar cost savings?
- A great presentation with not one word of hard dollar cost savings … would a buyer buy it?
- How do organizations like Salesforce or ServiceNow sell without a focus on hard dollar savings?
- Quotes, recommendations, or commitments from our sponsors.
- What must change in the selling and buying process?
- Procurement has a role, but it’s not to stop all communications between the buyers and the sellers.
- Communications must change, be more transparent and open throughout the process.
- The fishing expedition – why do enterprises send out 300 question RFP’s, make the TEM vendors jump through hoops, when they plan to stick with what they have, or they don’t even have budget approval?
- What do the vendors gain by pitching smoke and mirrors and saying they can do everything, even when they can’t?
- You’re looking for your 4th, 5th, 6th or even 7th TEM provider. Isn’t it time to look in the mirror?
- You’re pitching to an organization on their 4th TEM provider? That should prompt a different discussion.
- Quotes, recommendations, or commitments from our sponsors.
- Say What? The $30 million annual spender who saves $1 million each year. Soon it should be free?
- The more spend I manage, the more I need to charge versus the more savings I create for my customer, the better I am.
- My TEM provider is no longer saving me any money and therefore I can’t justify the cost and need to change providers? Is the provider doing a poor job or a good job?
- Save Me Money? Yes, but not so much that it makes me look bad.
- What do you mean you found me $5 million in savings? That’s going to cost me my job.
- The CIO of a $100 million spender who said “if you save me more than $1 million a year, you will be fired”
- It’s Ground Hog Day. I keep saving the same money over and over again.
- What about the root cause? Where is the focus on the core challenges?
- Quotes, recommendations, or commitments from our sponsors.
- When will there be real partnerships created between buyers and sellers?
- Why is it that buyers and sellers can’t seem to communicate at the first sign of trouble … and it only gets worse from there?
- When will the enterprises realize that there is no perfect solution in this very complex and difficult industry?
- When does an accurate inventory become the most important discussion point?
- Everyone wants a great relationship, but enterprises oftentimes don’t let the vendors talk to the business owners during the initial sales process. How does that create a foundation for a successful relationship?
- The Quarterly Business Review (QBR) … the focus needs to change. It’s not about all the great things we have done. We just love to drive from the rear-view mirror and you know how that ends up.
- Quotes, recommendations, or commitments from our sponsors.
- What is a Telecom and Mobility Management Center of Excellence anyways?
- Vendors and business customers really can work together to build a world class telecom and mobility management environment.
- Who are the critical stakeholders on the vendor side and what role do they play?
- Who are the critical stakeholders on the enterprise / buyer side and what role do they play?
- Telecom and mobility management functions don’t need to be the support organization in your company – position it to be a driver of business results.
- How do all parties show more value and contributions to the business?
- Quotes, recommendations, or commitments from our sponsors.
- AOTMP®’s top five recommendations to buyers.
- Recommendations, or commitments from our sponsors.
- AOTMP®’s top five recommendations to sellers.
- Recommendations, or commitments from our sponsors.
Series Overview
AOTMP® is a 19-year-old company that has both vendor and business customers in the telecom, mobility, and IT management industry. We have been consultants and trusted advisors for all customers in the past. We have collected data from our database of over 100,000 emailable industry professionals. We know what works. We know what doesn’t. Today, AOTMP® is an information services company supporting telecom, mobility, and IT professionals across the globe through training, certifications, association memberships, events & programs, best practices, publications, resources, and professional development.
We see the great relationships. We see the churn. We hear about the great buyers and the unreasonable buyers. We hear about the effective and the ineffective vendors. We see the buyers who will never have a successful TEM program until they change internally. We see the sellers who will say anything and go beyond reasonable ethics to get a deal. We hear the vendors who say they have never lost a customer, yet we can easily dispute it. We see the enterprise buyers who put 100% of the blame on their vendor, yet the greatest challenge is within their own organization. We see the many happy relationships and we see the many relationships that just exist because it’s too painful to change. And we see the major investor wins along with huge investor losses in the tens of millions of dollars. We see it all.
As we watch many other industries become multi-billion-dollar industries, from the CRM industry to the bill payment industry to ITSM with ServiceNow growing to nearly $6 billion in 20 years, the TEM segment of our telecom, mobility, and IT management industry just continues to struggle. That’s concerning given the significant opportunities on both the buyer and seller side, which in turn drives the investor side. There are so many growth opportunities; however, they are offset by so many inhibitors. It all just says, as buyers and sellers, we just haven’t yet figured out how to execute. There is no reason we can’t work together and have billion-dollar telecom and mobility management vendors serving world-class telecom and mobility management Centers of Excellence, with both sides making a much more significant contribution to overall business results.
So, the question is how do we move the industry forward? How do we move to a new level? Or can we? If not, what happens to the industry? Does the waste and inefficiency just continue, and we live with it? Do we just continue to make marginal improvement? Do we continue in the very fast-moving hamster wheel we live in? After all, we do have a lot of great vendors and a lot of great buyer environments, but not enough to make an industry out of the huge opportunity sitting in front of our eyes.
Given the multi-billion-dollar industry opportunity, offset by the significant growth inhibitors, we had to do something. We had to start. It will be like moving a mountain, but for the good of the industry, we had to take the first step. We started with two articles, the first focused on vendor recommendations for buyers followed by buyers’ recommendations for vendors. Then, in July, we held our first Industry Solution Showcase where we re-imagined how buyers and sellers connect. It was a great success from both sides. Everyone is looking for something different.
Armed with all the insight and experience, and feedback from the first three initiatives, we decided to author this eight-part article series, not to just point out all the challenges, but to bring awareness to all the growth opportunities right in front of us if we can work together to affect change. It must start somewhere, and it starts with one vendor and one buyer, then two vendors and two buyers, and builds from there.
You can follow along with the eight-part series in our AOTMP® Insights publication. And you can be assured there will be more initiatives to follow. It doesn’t stop here. Already in planning are initiatives at our annual AOTMP® Engage conference, potential webinars, and promoting Industry Value Challenge submissions we mention and receive throughout the Series. And there will be plenty more.
Given what we have seen in the industry over the years, along with what we see and hear today, we believe the greatest opportunities for growth for both the vendors and the businesses lie in five core areas. You will see this theme throughout the Series.
We believe the greatest opportunities for growth for both the vendors and the businesses lie in five core areas.
Improving the buy and sell process.
Agree to open and transparent communications throughout the process, regardless of the issue.
Developing stronger vendor – customer partnerships.
Problems are going to happen; commit to focusing on solutions, not penalizing each other.
Focusing on value beyond cost savings.
Help each other identify, quantify, and realize value beyond cost savings.
Building world class telecom and mobility management Centers of Excellence.
Work together to build environments that contribute to overall strategic business results.
Accelerating buyer and seller growth opportunities.
Help each other identify opportunities for growth in their respective businesses.
In this Article...
Imagine a Different World >
The Process is Broken
- Wastes a lot of time
- Stops or hinders communications
- Ignores relationship building
- Puts up walls between the most important parties to the ongoing success
- Pitches smoke and mirrors
- Misleads by saying you are the only ones, when you are definitely not
- Driven by the lowest price, regardless of value
Right or wrong, that’s what we have seen for years and still do today. True, it’s not every case, but in a significant number of cases, it is enough to hinder our abilities to grow the industry.
Normally, we would like to talk about changes we can make or what we can do differently. In this case, it’s obvious what we need to do, and it shouldn’t require a lot of discussion.
- Quit wasting vendors’ time
- Quit blowing smoke to the enterprises
- Focus on building relationships
- Focus on communications
- Quit misrepresenting
- Buy value and results, not low price
You get the picture. There is a reason this buy-sell process is listed in every one of our papers as a top 5 priority that must change in this industry, and just maybe there is a reason it is always listed first.
The Fishing Expedition
To get a little more specific, the business-driven fishing expeditions must stop. We can quickly summarize it:
- Businesses need to stop lying to vendors
- Stop pretending you have the intent to buy when you do not
- Stop issuing RFPs when it’s just an inquiry event
- Stop using ineffective current state processes and requirements as a benchmark to measure a prospective new vendor
Should we say it again, the fishing expeditions have to stop.
Over the years, we have seen hundreds of RFPs go out with tight response timelines. Vendors stop everything else they are doing to meet the timeline only for months to go by with no communication and ultimately no decision made. You just must ask yourself what really got accomplished with all that wasted time and effort? Was it worth it? Is there just no respect for anyone’s time? Isn’t there a better way to do it?
Full transparency is a good place to start. What is the real purpose of the RFI/RFP document? Maybe a different type of document when you are just making an inquiry might be more beneficial for everyone? More on this in a moment.
Procurement Says So
Procurement is one of the greatest challenges we see in the process, and it needs to change.
Procurement has a role, but it’s not to stop all communications between the buyers and the sellers, which is what we see more often than not. You would think procurement is the President’s traveling detail – nobody gets by them and they don’t care who you are or what you want. That’s ridiculous in a procurement process. We are killing the most important aspect of what drives success: the relationship. Strong relationships most times yield strong results. Weak relationships most times yield failure. That is common sense not only in this industry but in just about anything, including our personal lives. But in this industry, it doesn’t seem to be that important, as we are more concerned about building walls then building relationships. That doesn’t work and will keep us from building a strong relationship, or ultimately, advancing the industry.
Don’t get us wrong. Procurement is a very valuable part of the process. It’s just that procurement needs to get involved much later and focus on what procurement should be focused on … terms, conditions, final pricing, and risk mitigation … not trying to sort out features and functionality and the things that are important, to the business on a day-to-day basis. Or our favorite thing that needs to go – procurement trying to compare everything in a nice little grid or box.
Nearly every single checkbox in an RFP, relating to whether a vendor does something or not, has so many variations. For instance, we see questions about global capabilities or MCADs, just to name two. Whether the vendor does it or not is not the right question as there are many variations and meanings to both of those questions that need to be discussed and understood. And the discussion needs to be had between the vendor and the business, not just the business and procurement. The bottom line is most RFPs, as we see them today, are a joke and are a significant cause of industry challenges. Between RFPs and the walls that are put up, the industry has no chance of significant growth.
The Smoke and Mirrors
The smoke and mirrors in this industry coming from vendors is off the charts. It is pure misrepresentation and only destroys vendor credibility.
We have witnessed many post-demo sessions with buyers after listening to vendor pitches. Vendor 1 says we are the only ones who have these SLAs. Vendor 2 says we have these SLAs for you to measure our performance. Vendor 3 says we have these SLAs for you to measure our performance.
In 99 out of 100 post demo meetings, Vendor 1 gets one big strike against them for saying they are the only one when they clearly are not. Vendor 1 gets another strike against them for being out of touch with reality. Vendors think they are making themselves look good while it is quite the opposite in the mind of the customer. The business says, “if they are going to mispresent that, what else do we have to look forward to?”
Some advice for vendors that will help you win more deals, and in return, help advance the industry.
Vendors need to stop lying to customers and prospects.
You don’t win by making yourself feel better with what you say.
Eliminate unsupportable claims that start with “we are the only vendor that…”
By the way, how do you know you are the only one? Have you seen demos or had conversations with the 100 or so other TEM providers?
Stop pitching features and benefits before you understand a prospect’s business problem.
Eliminate up-front demos; that just adds to the industry problem.
Stop competing on price as your major differentiator.
If your price is lower than your cost, you will eventually fail your customers.
This industry is like a dark, back-alley street fight … vendors bringing the lowest price to every fight and buyers placing their bets on the lowest cost. It is dark, it is ugly, it is bloody, and nobody really wins. That’s what we have as an industry. And we wonder why we can’t grow. We need to take the high road and focus on value, not low price.
Vendors should place themselves above the rest. Again, take the high road. You should never talk about your competitors as you really don’t know them. Focus on your value and what you bring to the table. Be honest. Say “here is what we can do and here is what we can’t do. And on the things we can’t do, we would love to work with you and figure out joint solutions. There are opportunities for us to improve and opportunities for you to improve. Let’s commit to working together to help each other.”
Vendors, that approach alone will differentiate you and guarantee you will win more business.
You’ve Had How Many TEM Providers?
You are lying to yourself if you think the next provider will solve the problem. You’re looking for your 4th, 5th, 6th or even 7th TEM provider? That just says you really need to look in the mirror before you do one more thing. And yes, we have a number of organizations we are aware of that are on their 7th TEM provider. That’s a problem, and the problem is internal, not with the TEM providers.
What is the time, effort and cost to switch TEM providers? It is huge. But it is easier to blame the TEM providers than to look in the mirror and admit you have internal issues that are likely causing at least 50% the problem. Most times it is more like 75% of the problem. Or on the vendor side, if you are pitching to someone who has had 4 other TEM providers, that should raise an immediate red flag and prompt a different set of questions. That usually doesn’t happen, as vendors are just so happy to talk to someone who might want to buy something. Most think “I am willing to take my shot even though I am likely going to be taken out down the road, for problems out of my control.”
In the case where the business has had multiple previous TEM providers, 50% of the sales process should be on talking through each of the previous challenges – what could have the provider done differently and what could have the business done differently. And really focus on what the business could have done differently.
Imagine a Different World
Imagine a world where we had a different buy-sell process like this:
Document #1 Environment Profile
Business buyer creates a three-page environment profile document.
- Describes environment – how many of what, spend, devices, geography, top vendors, MACD activity, contracts, etc.
- Top 5 current challenges looking to solve
- Top 5 objectives of company leadership
- Top 5 objectives of IT leadership
- Top 5 things business is looking for in a new TEM provider
- Services we are looking at – invoice processing, bill auditing, device procurement, contract negotiations, device kitting and shipping, bill payment, MACDs, etc. Check all that apply and indicate with each what’s most important with that service.
- Where we are in the process – be transparent about it all, select all that apply
1. Just seeing what my options are
2. Looking for budgetary numbers but not committed to change
3. Looking for budgetary numbers and have internal agreement to change
4. Have budget approval for change
5. Committed to change in the next 6 months
6. Committed to change providers in the next 12 months
7. Other
- Business distributes this profile document to appropriate TEM providers.
- TEM providers respond in a standard high-level format that addresses how they can or can’t support in each area, no pricing is included.
Document #2 Vendor Response
Response document includes the following responses from the vendor.
- Overview of vendor solution as it relates to business environment
- How you support their top 5 current challenges
- How you can contribute to the objectives of company leadership
- How you can contribute to the objectives of IT leadership
- How you address the top 5 things the business is looking for in a new TEM provider
- How you support each of the services they are looking for
- Vendor company profile – history and what you bring to the table
Working Session #1
Three-to-four-hour session to review each area and each answer, clearly understand each other – business teams are involved, not procurement. The process may not go beyond this session if buyer just looking for basic budgetary information or does not have commitment to move forward.
Working Session #2
Three-to-four-hour deep dive session into functionality, demo as it applies specifically to the needs, etc.
Working Session #3
Implementation and pricing session specifically to review pricing, variables, SLAs, dependencies, and implementation plan.
Business selects best 2 solutions to present a full proposal.
Document #3 Proposal Submissions
Proposals are submitted by vendors.
Working Session #4
One follow-up session between the buyer and seller is scheduled to discuss the proposal.
Procurement Involvement
Procurement gets involved and delivers standard questionnaire that addresses:
- Pricing
- Terms and Conditions
- SLAs
- Risks
- Dependencies to deliver
There should be complete transparency from the business buyers and procurement on where things stand and a commitment for full updates every two weeks to the vendor participants. If the business or procurement teams cannot be transparent and communicate every two weeks to vendors, that already tells us something about the potential relationship going forward.
In this scenario, procurement is involved for pricing and contract initiatives, not business requirements and alignment to the vendor. The lack of total alignment, conversations, communications, and a relationship between the vendor and the business buyer is a huge component to stunting industry growth and opportunity.
We spend way too many hours on RFIs, RFPs, etc. just to address the 50 shades of beige, while missing out on what’s most important for mutual success. Like technology builds – the more time you spend up front on requirements and understanding each other, the less time and money it takes on the back end.
Background
AOTMP University delivers online training and certifications to the Telecom, Mobility, and Cloud / IT management industry.
After 20 years in business, w know what works and what doesn’t. We see the great relationships. We see the churn. We hear about the great buyers and the unreasonable buyers. We hear about the effective and the ineffective vendors. We see the buyers who will never have a successful TEM program until they change internally. We see the sellers who will say anything and go beyond reasonable ethics to get a deal. We hear the vendors who say they have never lost a customer, yet we can easily dispute it. We see the enterprise buyers who put 100% of the blame on their vendor, yet the greatest challenge is within their own organization. We see the many happy relationships and we see the many relationships that just exist because it’s too painful to change. And we see the investor wins along with huge investor losses in the tens of millions. We see it all.
Armed with this experience, we have decided to author this eight-part series, not to just point out all the challenges, but to bring awareness to all the growth opportunities right in front of us if we can work together to affect change. It must start, and it starts with one vendor and one buyer, then two vendors and two buyers and builds from there.
