Telecommunications Contract Tips - Strengths of a Good Contract

September 4, 2013

Telecommunications Contract Tips – Strengths of a Good Contract

By CBI Telecommunications, Author: Leslie Schultz

  • Better than standard Service Level Agreements and more importantly the formulas that get your credits if SLA’s are not met.
  • Great service and rates; which we consider to be BETTER than the industry average or going market rates that are offered by most carriers as a standard.
  • Alternative Services or technology offerings as new solutions become available. Don’t get yourself locked into a form of technology that you are held to for 36 months or longer.
  • Flexible termination clauses that allow you to be nimble and quick when it comes to adding and removing locations.
  • Payment terms that accommodate your organization, not the vendor
  • Pages and pages of verbiage that don’t apply to the services you are ordering, making contracts hard navigate through and understand exactly what you are getting.
  • Strict termination or penalty language that could cost you thousands of dollars
  • Hidden service charges, taxes and fees that are not described anywhere in the contract
  • Strict language that locks your services into one technology type or service location and penalizes you for any changes
  • Roll over language in the contract
  • Leverage carriers and make them compete for your business
  • Learn about new technology and services that could replace what you currently have
  • Opportunities to bundle or leverage additional services based on volume
  • To request alternative, back-up, or recovery solutions as a part of your service package

Weaknesses of Vendor Contracts

Opportunities – When Negotiating New Contracts

Threats – Contract issues that could cause a threat to your business

  • Termination penalty language that is not understood can result in thousands of dollars of extra cost to your company.
  • Carriers who are not financially stable or able to provide consistent service.
  • Not getting all “verbal promises” that sales people often make during negotiations in writing. Many technology vendors are notorious for account rep and management changes. Get your promises in writing to avoid finger pointing and lack of service in the future.
  • Not fully explaining the nature of your specific business to your vendor. Most vendors have cookie cutter products that they will propose to make the most profit from the contract. Good vendors take the time to understand MORE about your business so that you get the best technology solution that fits the needs of the business.
  • Negotiating on rates alone and not considering all other factors that contribute to a successful engagement moving forward. This can end up costing the organization more money long term you’re your original savings projections.

Conclusion

The contract negotiation or sourcing state of a project can be daunting. However, successful contract negotiation can also be very exciting! If all components are reviewed, negotiated and agreed upon, the end result is not only a great contract, but a mutually beneficial vendor relationship.
The end result of a successful telecom contract / sourcing engagement should result in:
Best in class; vendor services, contract language, terms and conditions, rates, SLA’s, customer service and technology solutions

 


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