Insights

Talk is not cheap. Ask anyone at a Fortune 1000 company responsible for overseeing the enterprise’s telecom sourcing or telecom contract management. Not only is it not cheap, it’s as complex as can possibly be—which is precisely how the telecom providers like it. The more complex the telecom agreement, the easier it is for them to add fees, hide costs, and generally jack up how much you pay to connect your company to your customers.

In the movies auctions always look glamorous and exciting. People with tons of money bid millions of dollars on priceless works of art. In real life, auctions are far less appealing – or successful. Not only are the items up for auction typically far more mundane, but the bidders are a combination of people who really know what they’re doing, the professionals, and those who have no idea what they’re doing, the rank amateurs.

In the traditional world of auctions, no matter what’s up for bid—art, memorabilia, cars, jewelry—there can only be one winner, one successful bidder. Everyone else in the room is, by definition, a loser. When it comes to telecom contract negotiations, e-sourcing (AKA reverse auctions) works much the same way with one exception: There is still only one winner, but it’s always the same winner—the telecom providers.