Endorses conclusions of TM Forum research calling for move to outcome-based procurement to enable more agile business
LONDON, UK – 15th May 2019 – MYCOM OSI, the Assurance Cloud Company™ and leading independent provider of Assurance, Automation and Analytics solutions to the world’s largest Communications Service Providers (CSPs), today outlined its response to the recently launched research report from TM Forum, ‘Time to Kill the RFP? Reinventing IT Procurement for the 2020s’.
In the report, TM Forum states that the telecom industry’s traditional Request for Proposal (RFP) process, dating back to the 1980’s, is broken and that bad procurement is costing the industry at least $1 billion annually. In addition, a survey conducted for the report reveals that two thirds of CSP and 81 percent of telecom supplier respondents agree that the process is no longer fit for purpose. Specific criticisms as to why the procurement process is broken include:
- the length of the process which is often at least one year and can be up to two or more
- poor results that do not deliver solutions adequately against business requirements
- cost overruns that may be two or three times the original amount due to charging for changes (‘change requests’) caused by not meeting business requirements effectively
MYCOM OSI agrees with the findings and conclusions in TM Forum’s research and believes a fundamental root cause is an outdated focus on how requirements are defined, evaluated and selected. The company is at the forefront of industry efforts to modernize the procurement process and has provided CSPs alternatives to the traditional requirements-led RFP process in recent years with some successful outcomes for CSPs.
“The RFP process is stuck in the dark ages, ignorant of the fact that the world has changed and that the pace of innovation is being set by a new breed of digital competitors who are agile, fast to market, and taking subscribers and market share,” said Payam Taaghol, CEO at MYCOM OSI. “Any RFP process that has to start with an RFI just so the CSPs can try to get up to date on the latest innovations in COTS capabilities is already going wrong, taking too long and focusing on the wrong question. Forget specifying features or capabilities – by the time the lengthy RFP process is complete they’ll be obsolete anyway. Focus instead on business outcomes. The RFP should pose the question ‘what is my business goal and how can you help me reach it?’. It’s time for the industry to embrace a new approach. It’s time for the agile RFP.”
“There has always been criticism of the use of the RFP for IT procurement because it glorifies the process rather than the outcome,” said Mark Newman, Chief Analyst, TM Forum. “But what has now changed is the desire to transition to agile IT development and the need for a more flexible, iterative procurement process. This poses real challenges for the procurement function. First, it’s likely to shift the balance between Capex and Opex budgets. Second, CSPs expect to get more bang for their buck if vendors partner with them on agile development. However, CSPs don’t necessarily know how much a project or solution created with a vendor partner will actually cost in a year’s time.”
MYCOM OSI believes that Agile IT procurement is a solution to the RFP problem and has three fundamental assets that enables it: outcome-based solutions, Software-as-a-Service (SaaS) and collaborative workshops/agile DevOps proof of concepts (POCs).
- Outcome-based solutions should be defined by use cases based on years of real-world telecom experience and that are supported by the underlying features and functions of the products. Focusing on value-based outcomes allows MYCOM OSI 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.
- Deliver technology as SaaS under a predictable subscription model that includes all current and future capabilities. Since MYCOM OSI can evidence years of delivery of best-in-market use cases, products and features, CSPs can be confident that they will have continuous access – with no further procurement processes – to the latest capabilities available in the market. This future-proofs CSPs against future requirements, with one example being 5G: once a CSP has subscribed to MYCOM OSI’s service assurance for Mobile networks then assurance of 5G equipment, services and network slicing is included within the subscription.
- Embrace collaboration with customer stakeholder teams to review how other leading CSPs use its outcome-based solutions and map them to the CSP’s required business outcomes. Collaborative workshops incubate innovate ideas that advance the CSPs original thinking of what they thought was possible, such as with automation, leading them to transforming their operational processes. Because the software is SaaS with capabilities delivered using an agile DevOps methodology, MYCOM OSI and the CSP can easily collaborate on proof of concepts and quickly develop and test new capabilities if required.
The full TM Forum report, ‘Time to Kill the RFP? Reinventing IT Procurement for the 2020s’, is available to download from https://inform.tmforum.org/research-reports/reinventing-procurement-2020s/ .