Outdated procurement cost telecoms €0.89 billion a year

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Research from the telco association TM Forum reckons poor procurement practices cost the global industry $1 billion (€0.89 billion) per year.

In the survey of over 300 operators and vendors, two-thirds of operators and three-quarters of vendors agreed that the request for proposal (RFP) process is no longer fit for purpose.

TM Forum says the RFP process hasn’t evolved with the needs of the industry and this stagnation is causing: IT transformation projects to fail; delays in time-to-market for new services; and unsustainable total cost of ownership and 'technical debt'.

Time to kill the RFP?

This situation also discourages collaboration between operators and vendors, and blocks start-ups from selling to operators, the report, Time to kill the RFP?: Reinventing IT procurement for the 2020s, finds.

The Forum recommends that operates should leverage proofs of concept to test new technologies and solutions, and transition to as-a-service payment models (the Forum runs a proof-of-concept Catalyst programme).

It also urges operators to embrace agile methodology by breaking projects down into smaller components and eliminating waterfall practices with suppliers.

“The procurement process needs to be decentralised and digitised,” the report says, which could d cut procurement processes from up to 18 months to as little as eight weeks.