Kill the RFP? Yes please! Agile procurement can save billions and accelerate innovation

We have contributed to the most recent TM Forum research report “Time to Kill the RFP?”, looking at how the telecoms industry approaches procurement and how the process can be improved to save time, money and effort for all involved – CSPs and vendors alike.

Yes that’s right, a report into procurement processes – I can almost hear the collective groan.

But this is important. It’s costing the industry billions and erecting roadblocks to innovation that are actively harming the ability of CSPs to compete in the digital economy – and will be a key agenda item at the upcoming Telecom Assurance Cloud Summit (11 June 2019).

Time to Kill the RFP? Reinventing IT Procurement for the 2020s’ suggests that the telecom industry’s traditional Request for Proposal (RFP) process, which dates back to the 1980s, is broken – and that bad procurement is costing the industry over $1 billion annually. In addition, a survey conducted for the report reveals that two thirds of CSPs and 81 percent of telecom supplier respondents agree that the process is no longer fit for purpose.

As CSPs gather in London next month to discuss the future of telecom assurance and its move to the cloud, this procurement issue will firmly on the agenda. Quite simply, today’s outdated RFP process is no longer fit for purpose in this digital, cloud-native world.

The TMF’s report included specific criticisms as to why the procurement process is broken; namely the length of the process which is often at least a year and can be up to two or more, a failure to map against business requirements, and avoidable cost overruns of up to 3x the original amount due to ‘change requests’ necessitated by not meeting business requirements effectively.

I believe a fundamental root cause of these failings is an outdated focus on how requirements are defined, evaluated and selected.

But there is another way – and at MYCOM OSI we’ve been working at the forefront of industry efforts to modernize the procurement process, including providing CSPs with alternatives to the traditional requirements-led RFP process resulting in successful outcomes.

The reality is that both the speed of technical evolution and the way that technology is developed and delivered has changed.

Driven by the approaches taken by successful webscale software companies, through the adoption of SaaS and Cloud technologies, many technology-based RFPs have shifted to outcome-based procurement. But in the telecoms industry, many are still using the old model where the focus has been on product features, and not on the business benefits.

But does this matter? Or is this just vendor grumblings?

Too many CSPs have yet to realise that the pace of innovation is being set by a new breed of digital competitors who are agile, fast to market, and aggressively taking both subscribers and market share.

The RFP process goes wrong before its even begun – it starts with the asking wrong question. Rather than specifying features or capabilities – which given the pace of change today risk being obsolete once a lengthy RFP process has completed – CSPs should instead focus on business outcomes. They should adopt agile processes, focusing on business outcomes and how vendors can help achieve them.

A fit-for-purpose, agile procurement model should be built on three fundamental elements: outcome-based solutions, SaaS, and collaborative workshops/agile DevOps proof of concepts.

  1. Outcome-based solutions should be defined by use cases based on years of real-world telecom experience, that are supported by the underlying features and functions of the products. Focusing on value-based outcomes allows us to apply and combine the best and most relevant products and features in ways that directly achieve business results without being restricted or distracted by stand-alone feature requests, many of which may not provide sufficient contribution to the required business results.
  2. Deliver technology as SaaS under a predictable subscription model that includes all current and future capabilities. CSPs must have continuous access – with no further procurement processes – to the latest capabilities available in the market. This future-proofs CSPs against unforeseeable requirements, with one example being 5G: once a CSP has subscribed to our service assurance for mobile networks, then assurance of 5G equipment, services and network slicing is included within the subscription.
  3. Embrace collaboration to incubate innovative thinking and unlock agile DevOps. Collaborative workshops incubate innovate ideas that advance the CSP’s original thinking of what they thought was possible, such as with automation; and, together with SaaS and an agile DevOps methodology, opens up the opportunity to collaborate on proof of concepts and quickly develop and test new capabilities if required.

Procurement is often seen as quite a dry subject; but it has wider implications than just simply buying software to operate telecoms services. The reality is that the cultural shift to the Agile model speaks to how a CSP approaches innovation and digital transformation. Beyond the pure cost savings, adopting an Agile approach is likely to be a defining success factor for the CSPs at the forefront of subscriber growth and service innovation.