We’ve recently been talking about the chasm between OSS buyers and sellers. OSS buyers and sellers desperately need each other to improve the effectiveness of the entire telecommunications industry. The size of the chasm is harming both sides. In part 2 of the “buyer-seller chasm” series, three of the biggest contributing factors were identified as:
We’re going to really drill into the element of trust today. More specifically, the Speed of Trust.
We’ve all experienced the OSS procurement processes that run for months, even years. The speed of trust in the telco / OSS world is generally around 12-24 months. That’s roughly how long it takes for an OSS buyer (telco, service provider, etc) to go from acknowledging that they need a significant OSS transformation to when they sign a contract with a vendor / supplier to initiate that transformation.
Why the massive delays? Trust, risk and confidence mostly. It takes the buyer that long to sort through the possible supplier offerings / capabilities to find the optimal blend of trust in the supplier, risk sharing / avoidance, and confidence in the future success of the project (all for an acceptable price).
It’s not just the time but the effort and costs of running the procurement event (not to mention the opportunity cost of not yet having better OSS/BSS solutions available to run the network more effectively).
Let’s look at the speed of trust through a telco / OSS example. It takes a carrier 19 months to form an OSS transformation contract with a supplier for a contracted amount of $11m. The contract itself is hundreds of pages long. Just the process of negotiating the contract takes months, is arduous, combative and competitive. The so-called partners are already at loggerheads before the contract is even signed.
For the purpose of contrast, let’s look at the 1 minute video snippet below (from a story told by William Ury on the Tim Ferriss Show) about how Warren Buffett handled a transaction nearly 50x the size of our OSS example.
Warren Buffett and $500 Million at The Speed of Trust pic.twitter.com/rRCw703lbv
— Tim Ferriss (@tferriss) February 16, 2024
Apart from the speed and size of the deal, William makes two really important observations:
Let’s compare this again to the typical OSS buyer/seller “partnership” that is fundamentally flawed from the outset. An approach that puts the so-called partners on a war footing from the commencement of contract negotiations.
Hmmm….. So maybe it’s just that Buffett is a trusting kind of guy? That’s possibly true, so let’s consider a story shared by Harley Finkelstein, the President of Shopify, about other billionaires he’s interviewed.
“I’ve done about 12 of these interviews so far with these like older icons and legends and Titans. Almost all them to a tee say, [the key to success is to] “Make your partners really, really rich!””
Hmmm… That’s interesting. But…. How do OSS sellers make their buyers really, really rich? Profitability in the telco industry is seen to be declining across the board. OSS are seen as cost centres. They’re not seen to be revenue generating. Therefore the game being played in OSS procurement is one of scarcity and reduction of the size of the cost centre. It’s a race to the bottom for OSS sellers and a race to conflict between OSS buyers and their suppliers.
It makes me really annoyed when people say OSS and BSS are just cost centres. We’ve dug ourselves into this massive hole. But OSS are not cost centres. They’re the profit engine of every telco they serve.
The sooner we collectively flip this script, and take actions to engender buyer/seller trust, the sooner we’ll see deals handled like the Buffett example above. Then we’ll have a greater chance of the whole industry thriving – buyers and sellers alike!
As the buyer-seller series of articles describes, PAOSS uses various tools and techniques to bring buyers and sellers together in a more streamlined manner. We certainly haven’t solved the whole challenge, but we do have many of the pieces that do help to shrink the divide. If you’d like to hear more about our techniques and/or share the approaches you use to overcome this massive problem, we’d love to chat with you. Please drop us a note.
PS. I’d love to hear your thoughts about how these perspectives of Buffett and Finkelstein might differ or align with deals in the telco / OSS industry
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