Firms squander £12bn a year on poor telecoms sourcing

Large organisations are losing £12bn a year through poor management of telecoms and network sourcing

A worrying 80% of all telecoms sourcing projects aren't as efficient as they should be and could shave potentially 20% off each contract spend, according to a study by Forrester Consulting on behalf of Hudson & Yorke.

Although 20% of IT budget goes on telecoms, CIOs commit well under that amount of resources to manage their telecom strategy, potentially affecting the quality of service they receive from telecoms service providers.

"I don't think all CIOs realise that 20% of budget is telecoms and if they do they don't really put the level of resources into the area they need to, because most CIOs don't have a background in telecoms," said Mike Newlove, COO at telcoms and networking sourcing specialists Hudson & Yorke.

"Telecoms is looked at as a commodity service, but in reality telecoms and networks underpin the whole IT strategy particularly now with cloud and virtualisation all delivered over the network."

One in five respondents felt they hadn't met the objectives laid out in the original business case and many felt that their telecoms sourcing strategy had not been thoroughly defined.

Hudson & Yorke recommended firms establish a technical and service strategy before starting the sourcing process and link their long-term telecoms and network strategy to their wider IT strategy. They should also allow plenty of time to complete a major sourcing project, as cutting corners could undermine the long-term success.

"You can quickly lose the value out of the business case if you don't put the effort in upfront," said Newlove.

The independent study surveyed 81 multinational organisations in 12 countries.