This has been a busy time for us at Network Control: we’re deep into 2017 budget planning with customers.
It never ceases to amaze us how the contractual considerations in agreements have increased in number and complexity. This is going on even though transaction scope, spend and term length are all becoming shorter, and we don’t see this changing any time soon. From the RFx’s we have been conducting over the past few years, here are some of the trends we’ve been seeing:
- There is increase in knowledge the enterprise brings to the table in the requirements for vendors as the enterprise has to become “manager” of a multi-faceted network with many sourcing arrangements.
- New regulations have been growing dramatically, and existing ones have been changing. Data protection and data breaches head up the list. We see an growing trend of carriers asking for numerous LOAs to be executed in order to gain visibility into a customer’s book of business, driven in part by carriers being fined for data breaches. Diligence and consideration have to be on the forefront of everyone’s mind. From Brexit to the new Privacy Shield guidelines the cooperation and information exchange that will be required across a multi-supplier environment must be followed and updated.
- We have been been focusing on how to drive operational levels in our RFxs and outsourcing engagements. We are finding that pinning down a framework for governance, service levels and other service metrics and confidentiality provide a much more streamlined communication between all parties. Which proves to benefit the entire engagement from start to finish. As carrier delivery models continue to evolve, flexibility in contracting and tight alignment between business and legal stakeholders must be stated and understood from the beginning.
- As more and more enterprises find themselves migrating to the cloud for regulatory, financial or technical shifts the question in assessing cloud will always be to stay with the incumbent or move to a new vendor. This is where having knowledge of your contracts come in play from a strategic perspective. Staying with the incumbent makes sense if the their contract allows the customer to migrate to their cloud offerings. A lot of carrier agreements have a technology refresh clause that allow them to adopt newer technologies to meet the changing needs or to mitigate the risk of sunsetting services. Some contracts are structured so moving to a newer technology will negatively impact provider revenues. This of course is when a new carrier comes into the picture even more quickly than waiting for the incumbent to respond. There are legal considerations to be aware of when migrating to the cloud. From a contracting perspective, data protection, data sovereignty and cyber security issues are the top three. Pay close attention to each of these areas before signing on the dotted line.