Ruth Welter
Vice President Global Strategic Alliances
No longer viewed as just a back-office function, procurement has a vital role in driving down costs and improving the quality and speed of the service that network providers offer to their customers. Network-as-a-Service (NaaS) and on-demand connectivity provide the opportunity to do just that.
Demand for connectivity continues to proliferate – the average consumption of broadband data is rising by 9% annually, and cross-border e-commerce traffic is expected to increase between 16% and 29% year on year between 2023 and 2028, boosting the need for connectivity. Although this growth offers opportunities for network providers, they’re battling to lower operational costs, improve margins and keep hold of market share.
At the same time, consumers have come to expect immediate access to seamless digital services and experiences, putting additional pressure on enterprises and service providers to respond faster to evolving demands and market trends.
This, in turn, is upping the ante when it comes to the expectations that wholesale customers have of their connectivity providers.
Demand for greater agility through automation is also growing, with 89% of service providers and 38% of wholesale customers describing automating business functions through Application Programming Interfaces (APIs) as a ‘must-have’.
But what does this picture mean for procurement?
Procurement is struggling to keep pace with demand
In addition to the requirement to achieve best cost efficiency, many procurement departments are measured on how quickly they can respond to requests for quotes and orders, allowing their sales teams to react speedily to customer enquiries. As the demand for network connectivity continues to grow, manual procurement processes are having difficulty keeping up, and OpEx is rising.
Reducing human error in procurement is also important, as mistakes often take valuable time to be rectified. This not only negatively affects the agility of the service provider, but its reputation too.
Cost, speed and accuracy, then, are all important drivers for procurement. This is why the shift from manual, error-prone procedures to a streamlined, automated procurement process is a key focus.
NaaS offers a faster, more cost-effective way of doing business
According to our recent Digital Infrastructure Report, around a quarter (24%) of IT and telecom companies with intelligent digital infrastructure are already taking advantage of on-demand, self-serving connectivity. Users of on-demand connectivity platforms range from sales functions to procurement teams.
NaaS allows organisations to implement network services on demand instead of buying, building and maintaining their network components. This model focuses on the use of APIs to automate functions like quoting, order processing and provisioning and allows services to be quickly scaled depending on demand.
Streamlining network processes with efficient APIs, especially those co-created alongside the MEF, ensures a robust integration for customers.
Automating procurement processes for transactional services speeds up the quoting, ordering and provisioning of service orders dramatically. Since automation involves the pre-negotiation of prices, quoting is instant. The overall delivery time is significantly reduced too – on average, we find it’s reduced by 24% for Colt On Demand. This time-saving helps procurement teams to meet customer expectations for a faster, more flexible and more streamlined service from their network provider.
As well as reducing time-consuming manual errors, automating procurement frees staff from repetitive manual tasks and allows them to focus on more valuable work. The associated cost savings can be significant; automating network and service operations can save up to 5.7% of total annual revenue.
However, many connectivity service providers are not yet at the stage of digital and organisational readiness to adopt full procurement automation. Still, NaaS and on-demand services can save these organisations time and help to improve accuracy, since self-service platforms eliminate manual errors and only require one member of the procurement team to configure new services.
Colt On Demand: global connectivity with fast, fully automated ordering
Colt On Demand provides agile connectivity wherever and whenever connectivity service providers and their customers need it, with a fully digital ordering and configuration experience through an intuitive user interface or a set of standard (MEF) or proprietary APIs.
Our multiple-award-winning SDN-enabled network connectivity self-ordering platform provides flexible connectivity between data centres, enterprise locations, major cloud providers and the public internet, occasionally in real-time.
Colt On Demand offers incomparable reach in Europe, APAC and the US to:
- 1,100+ data centres
- 160,000+ enterprise buildings via virtual on-net
- Several million enterprise buildings served by partners across 180+ countries
- Off-net reach to millions of other locations through our OLO partners
Case study: how AT&T and Colt automated network ordering, accelerated provisioning times and boosted efficiency and cost-effectiveness
Colt and AT&T partnered together to work on the first successful MEF LSO (Lifecycle Service Orchestration) Sonata API, enabling business automation between service providers and supplier partners. This allowed the American telecom to place automated orders for Colt’s Ethernet Services using the API, validate site addresses, check service availability, get a quote and place automated orders on our network.
The notification functionality in the MEF API allows AT&T to track the progress of the order, receiving virtually real-time updates from Colt’s system through the delivery process to handover.
The streamlined back-end communication between AT&T and Colt means AT&T’s global customers who have sites located in Colt’s network footprint can significantly improve service qualification and reduce ordering times from days or weeks down to just minutes.
For AT&T, this makes ordering services more cost-efficient, flexible, transparent and error-free in comparison with manual processes.
NaaS supports a new role for procurement
By automating, streamlining, and accelerating the purchasing process, NaaS and on-demand services can help procurement reduce internal process costs and respond more flexibly to customers' changing needs. This helps shift the perception of procurement from a traditional cost centre to a department that can drive strategic value and create a competitive advantage in a crowded marketplace.
If you’d like to discuss implementing NaaS in your business, you can book an Innovation Workshop with a team of our solutions engineers.
