It turns out that IT procurement is still in the Dark Ages

Image credit: Carlos Caetano /

You have to admire TM Forum’s Mark Newman. He is not exactly the lone voice in the wilderness trying to transform telco procurement processes but he has been on the case for so long now that he deserves a medal (and a pretty decent holiday).

There have been many articles written and many discussions hosted on the subject of procurement. The problem is that it takes too long and costs too much to be acceptable to any of the parties involved. Newman has doing the sums and his calculation is that the telecoms industry is spending $1 billion a year on IT procurement processes.

This cost is putting some suppliers off even bidding for contracts. Our friend Ryan Jeffery watched while he was part of a large team that spent months on a bid only to come second – to a company that produced its bid on one sheet of paper.

There are, thankfully, some decent ideas emerging. Fundamental to most is that IT procurement should be about trust, about finding partners who you trust to have a good vision of the future (that you believe in) and can deliver.

Which is fine, but if you just go with trusted partners, then how can you be sure that you are not missing out on finding new and interesting companies who have better visions of what 5G, say, can let you do for your customers.

Talk to an IT executive and he will probably defend the RFP, even when it comes to smaller companies. One such still believes that, even though it takes a long time and costs a lot of money, RFPs are the best way to fully explore what you need (and not just what you want).

The real problem, which is possibly Newman’s biggest frustration, is that telcos are – according to the press releases anyway – all skipping along the path of digital transformation, yet how can telcos become digital service providers when their procurement processes are so cumbersome.

It is probable that the RFP will die. Let us hope that its replacement (whether it is something along the lines of a Minimal Viable Contract or something else) is not building on, or taking away from an RFP, so that we end up with an RFP but with a different three letter acronym.

The real ray of light is that it is as frustrating for people in telcos trying to innovate and transform things as it is for Newman and the supplier community.

As a result there are more and more examples of guerrilla tactics within telcos. Parts of IT departments are transforming processes and the services they offer without an approved budget but with approval to try. If they succeed, they might get a small budget, they keep going, they keep succeeding, they get a little more budget.

You get the picture.

Another idea, from some years ago, is that each department should have its own IT budget and accountability – to treat transformation in the same way that some forward looking telcos treat revenue assurance. Simply, that the second job of each and every department is to make sure that all revenue is present and accounted for before the process moves on.

This may not be the answer and the sound of running feet and shouting is probably a centralised IT department baying for blood but the truth is that, until the Venture Capital arms of telcos begin to invest in start-ups that actually help them do interesting things (and, no, they don’t) then there will be no top down change. That will have to happen in pockets and gradually move outwards.

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