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When Government Buys, the Private Sector Reaps the Rewards
From mid-2017 to present, there has been a sharp increase in the level of activity that the government sector has been generating in the telecommunications space. From phone systems and telecom audits, to service contracting events, government telecom buying is quickening, and the private sector is only just beginning to reap the benefits.
This isn't just a feeling; many telecommunications organizations -- including my own -- have seen the marked uptick in request for proposal (RFP) and request for information (RFI) activity. From our own (somewhat unscientific) experience, taking a one month period (March 20-April 20, 2018), bid aggregator BidPrime showed the release of no less than 100 RFPs for phone systems and VoIP activity in the state, local, and public education space that directly related to what we do. This is an increase of almost 100% over the same period last year. A simple search of "telecom" shows 53 active telecom services RFPs as of April 23 and over 774 RFPs over the last year.
What do these numbers really mean for the private sector?
Visibility. Since most government buying decisions are made in the full view of its constituents, an absolute wealth of information is available to support procurement and vendor benchmarking.
But what is driving the increase in activity?
From the top down, there are mandates to modernize, contain cost, and provide better access to end users and constituents. While familiar to the private sector for years, this represents a fundamental shift in the largest market for telecommunications vendors and service providers in the world.
According to IDC research, one of the fastest growing, and largest markets for spending between 2017 and 2020 could be found within the federal and central government sectors in the areas of telecommunications and professional services. In fact IDC forecasts indicate these buyers will lead the IT products and services market in purchasing power and represent a strong, committed opportunity for the public sector to play catch-up with its private-sector counterparts.
How are federal, state and local governments affecting this change?
According to the U.S. Government's Office of Management and Budget in its Analytical Perspectives for fiscal year 2019, initiatives are underway to utilize category management best practice buying as well as to reverse the struggle "with appropriately planning and budgeting for continuous modernization of their legacy IT systems, upgrading their underlying infrastructure, and investing in high quality, lower cost service delivery technology."
What does this mean for communications commodities and buyers in the private sector?
In short, it means a level of innovation, simplicity, and transparency that has not been seen in quite a while. While the public sector has not often been known to lead the way in innovating, its deep pockets most certainly have been known to drive industry-disruption with vendors and service providers in the areas of upgraded products, new services, and value-driven pricing.
From new hardware features, softphone systems, and customer-centric call centers, to the explosive growth of cloud-based solutions and 5G global network expansion, technology and telecom providers are racing to compete for what is forecasted to be a very lucrative market. Day by day, the competition to release new networks, hardware, and offerings that are government-ready, and private-sector enabled, is growing and accelerating. Yet, according to PwC, simplification of offering complexity has also become a key area of focus for telecom providers and vendors; the net result is improved service while making way for cost reduction and operating efficiencies both in the public and private sector.
Beside innovation and simplicity, one of the largest benefits that the private sector can realize during this boon time in public sector telecommunications contracting is the use of publicly available contracting and pricing information. As many know, under the Freedom of Information Act (FOIA), most federal government contract numbers and pricing records are public record and are often searchable on the Federal Business Opportunities portal (aka "FedBizOps") or by each specific contracting authority requesting bids. General Services Administration (GSA) schedules/contracts are also a great place to find specific pricing information. Moreover, most state, county, local, and educational institutions have their own regulations governing open records and information as well. Consequently, from the largest federal agencies to some of the smallest townships and villages, product and pricing data is there for the private-sector asking (or searching!).
Transparency and innovation are the clear winners as government entities look to replace aging infrastructure and hardware, and take advantage of new-to-them services. Accordingly, as your organization looks to uncover new ways to connect to your customers and stakeholders while driving down cost, this acceleration of government telecom contracting provides great opportunities for strong contracting wins as well, throughout 2018 and beyond.
"SCTC Perspectives" is written by members of the Society of Communications Technology Consultants, an international organization of independent information and communications technology professionals serving clients in all business sectors and government worldwide.