As 2014 draws to a close, here are some of the upcoming trends that you should expect to see next year in telecoms procurement.
1. The shift in accountability. Procurement departments are increasingly becoming accountable for tracking business savings and confirming they have been delivered. But although it has improved, vendor reporting is still not delivering everything procurement needs, especially data on savings. Procurement will rely more on outside tools to gain this real-time visibility.
2. Chasing the Holy Grail. Rapid expansion by enterprises into new markets will continue to cause issues for telecoms contract management. Enterprises are seeking single global telecoms contracts and several operators claim they can offer them; but in reality, the commercials, technology, and infrastructure are not fully in place to support it. However, in Europe this could become a reality in the next 12 months. That is, for a limited range of countries only.
3. Harmonisation. In 2015, it is likely there will be a shift in commercial offerings from operators. Tighter EU regulations on pricing are directly affecting the profit margins of the network operators. Procurement and IT departments should be on the lookout for operators moving towards harmonisation of commercial offerings across countries and the cost efficiencies that this will bring.
4. The impact of EU regulations. The continual downward march of network operators’ average revenue per user is a result of greater restrictions on roaming rates from the EU, and the expectation on operators to invest in new technologies such as 4G.
Consequently, this regulatory complexity and financial pressure are resulting in a growing trend for consolidation amongst operators. The first wave will most likely be in-country as various local operators join forces. This will then inevitably be followed by wider-scale consolidation. Within a few years, there could be only a handful of operators across Europe.
5. Changing employee expectations. Mobility is now a necessity for business growth and with this comes high expectations. But as mobility becomes de facto, additional complexity arises from the variety of needs and expectations each department of the business has. In 2015, mobility will be a more complex proposition for procurement departments who have to juggle multiple stakeholder requirements.
6. A need for more intelligence. When compared to three years ago, the telecoms market is hardly recognisable because operator revenue models have changed repeatedly in response to regulation and innovation. 2015 will see procurement departments seeking out more intelligence on industry developments to select suppliers more effectively. These areas will include billing trends, operators’ tendering process and pricing structures. Without this information, procurement will be unable to make informed choices.
☛ David Walker is VP EMEA, strategic consulting at Tangoe and a CIPS member
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