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September 11, 2019
Earlier this year the TM Forum published a report about IT procurement in which they noted that around two-thirds of communications service providers (CSPs) think the traditional request for information/proposal (RFI/RFP) approach is no longer fit for purpose.
Dissatisfaction with the RFI/RFP process was similarly high among vendors, for whom participation is costly and, clearly, not always successful. A BSS vendor marketing director is quoted in the report as saying: "We were holed up in our hotel for a month working feverishly on different aspects of the bid. We had 15 people there in total … the meetings go on and on, and you really have no idea when they're going to finish."
Traditional RFI/RFPs typically involve drafting of highly detailed requirements and then asking vendors to demonstrate, on paper, how their solutions meet those requirements. Even if the requirements are exhaustive, by the time the solution is implemented business priorities will probably have changed. Vendors often use the resulting change requests as an opportunity to boost their margins on a project, particularly if they had to bid aggressively to win in the first place.
This puts a strain on the relationship between operators and vendors, with operators suspicious that vendors will try to squeeze more money out of them and vendors fearful that they will lose money on a project where the requirements were ambiguous. Hence, stories of abandoned IT projects, delays and cost overruns abound in the industry, though both parties generally try to brush such bad news under the carpet.
The TM Forum report points out that while Tier 1 operators usually have their own, often large, procurement teams to manage the RFI/RFP process, smaller operators often use third-party consultancies. Heavy Reading recently managed an RFI process for an operator that was looking for a performance and fault management system as well as a service management solution (ticketing, change/configuration management and SLA reporting).
After a briefing with the operator's IT and operations teams, I wrote a detailed RFI that stretched to 17 pages. The spreadsheet used to compare vendor responses had 100 rows. I sent the RFI to around 20 potential vendors for performance/fault management and around 15 for service management, based on my knowledge of reputable but affordable suppliers. Around half of the vendors responded to the RFI.
Those that didn't respond mostly seemed to find the RFI overly daunting. Some said the customer was likely too small for them. Others blamed short staffing due to vacations or said they were busy working on other deals.
I was unable to send the RFI to two of the vendors I had preselected. One large IT vendor had a contact email address on its website that bounced back; I got no response to LinkedIn requests either. The other vendor had a telephone number on its website that was no longer in service. When I eventually tracked down a sales contact his role was "under review."
Some of the vendors were suspicious about my involvement in the RFI, possibly thinking it was a ruse to get information for a competitor. Two of the vendors made me sign non-disclosure agreements (even though the RFI already had a mutual confidentiality agreement) and one of them even demanded a copy of Heavy Reading's contract with the operator for the RFI consultation.
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After scoring the responses, across around 80 requirements, my recommended shortlist of vendors was just five out of the original 30. One of these was a vendor that offered a one-stop-shop for both performance/fault and service management. Having one throat to choke is handy when systems interconnect as closely as these do. Another recommendation was a niche performance/fault management solution provider that had partnered with a large service management provider, again providing a well-integrated, holistic solution. There were also a couple of specialist vendors that offered good standalone solutions and would probably be price competitive.
The next stage of meeting and discussing the finer points of the requirements (as well as pricing) with the shortlisted vendors is being handled by the telecom operator management team itself. However, we saved them a lot of time in narrowing the field of potential suppliers and helped to put down on paper what their requirements were. As the TM Forum report notes: "Finding time to produce all the documentation required in an RFI or RFP is becoming very difficult."
If you have an RFI process that keeps on getting delayed due to other time commitments, then please reach out to me at [email protected]: Heavy Reading and the broader Informa Tech Research bench (now including the IHS Markit TMT team) may be able to help.
— James Crawshaw, Senior Analyst, Heavy Reading
Principal Analyst, Service Provider Operations and IT, Omdia
James Crawshaw is a contributing analyst to Heavy Reading's Insider reports series. He has more than 15 years of experience as an analyst covering technology and telecom companies for investment banks and industry research firms. He previously worked as a fund manager and a management consultant in industry.
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