The agile CSP-vendor relationship: why it holds the key to digital transformation

Posted by Ian Meakin on Mar 5, 2020 2:25:31 PM

Digital transformation – it can mean so much that it can be rendered meaningless. Is it about delivering new digital services? Platform economy ecosystems? Is it about embracing the cloud and becoming ‘cloud native’? Does it mean transforming the operations of the business? Well, yes, it can mean all those things.But, often overlooked, it also means CSPs and their vendors working together in a different way – in an agile way. We have seen transformation projects delayed by more than a year because small but critical components can’t be delivered on time due to a rigid CSP-vendor relationship.

The agile CSP is an organization that is focused on business outcomes, not a checklist of features and rigid scope of work. It has a relationship with its vendors that is based on shared success and value.

There are moves already underway within the telecoms industry to overhaul the procurement process and make it fit-for-purpose, so CSPs can compete in the new digital economy. 

A recent report from TM Forum addressed the need for agile procurement head-on. ‘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.

The TM Forum’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 3 times the original amount due to ‘change requests’ necessitated by not meeting business requirements effectively.

A fundamental root cause of these failings is not only an outdated focus on how requirements are defined, evaluated and selected at the initial procurement stage, but also that these are then not continuously reviewed against adapting business requirements.

To put it bluntly, too many CSPs are doubling-down on a relationship with vendors that is no longer fit for purpose.

But there is another way. Driven by the approaches taken by successful webscale software companies through the adoption of SaaS and Cloud technologies and customer success methodologies, many technology-based RFPs have shifted to outcome-based procurement – a stark contrast to the telecoms industry, where traditionally the focus has been on initial product features and not on ongoing business value.

So, what does “agility” mean in practice for CSPs and how do they select and work with their vendor partners?

A fit-for-purpose, agile procurement and ongoing working model should be built on four fundamental elements: business outcome-based solutions, collaborative workshops/agile DevOps proof of concepts, SaaS technology and an ongoing customer success-based relationship that is based on value.

  1. Outcome-based solutions should be defined by business value and supported by use cases based on the latest real world telecom best practices, not the underlying list of features and functions of the products. Focusing on value-based outcomes allows vendors flexibility to apply and combine the best and most relevant products and features in ways that directly achieve business results required by CSPs on an ongoing basis, rather than having features rigidly specified for them at the beginning of projects
  2. Embrace collaboration to validate and incubate continuous innovation and unlock agile DevOps throughout the project lifecycle. Collaborative workshops validate outcome-based solutions and incubate innovative ideas that advance the CSP’s original thinking of what they thought was possible using aggregated CSP best practices and the latest technology, such as with AI/ML and automation. New capabilities can be quickly explored and proven using a flexible SaaS platform and collaborative, agile, DevOps-based proof of concepts
  3. Deliver technology as SaaS under a predictable subscription model that includes future capabilities. CSPs must have continuous access – with no further procurement barriers – to the latest capabilities available in the market. This future-proofs CSPs for new and changing 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. This frictionless technology access removes barriers to continuous review and alignment of vendor solutions to business value
  4. Build a customer success relationship that is based on value. Agile working isn’t a one-hit-wonder that happens just at the initial onboarding stage. It is about continual engagement using a customer success model where CSPs and vendors work towards shared business and technical goals and continually evaluate, develop and execute against objectives based on the value they deliver to the business. A subscription model not only enables this but enforces it since ongoing subscription renewal is predicated on value provided

Ultimately, it is about CSPs and vendors working together to deliver outcomes based on business objectives throughout the lifecycle of the relationship. The reality is that both the speed of technical evolution and the way that technology is developed and delivered has changed. The agile CSP is one who has an ongoing collaboration with its vendors to deliver solutions that are based on business outcomes and not outdated feature check-lists.

 

Topics: Automation, CSP Digital Transformation, Telco Cloud, SaaS

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