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Text Box: STC LINES—April 2006
Text Box: Reality Check:  Consultants and Procurement Processes (From Page 1)    
Text Box: involved, the greater the benefit we can deliver. In any case, we have always been able to enter at any of several places along the procurement value chain.
A New World Order?
      Now, however, we are moving from involvements in the older Product Life Cycle perspective on transactions, in which vendors focused on optimizing the price of successive, specific sales in accordance with the value chain shown in Figure 1, to a newer, Relationship Life Cycle environment, which focuses instead on the allocation of resources by all market participants to the establishment of collaborative relationships.
      Is this really news? You bet, because it changes everything. These days, I am sure we have all seen how Avaya, Cisco, Nortel, NEC Unified Solutions, and even Siemens Communications, among some of the major players, are emphasizing network design and security solutions, along with service and support arrangements, that are hardware agnostic.
      Implicit in these market strategies, among other things, is an acceptance of hybridized hardware networks, a “get-one-foot-in-the-door” approach to building partnerships with end users, and an increasing emphasis on service and support agreements. (For a case in point, see Martha Buyer’s Legal and Regulatory Update column, on page 4 of this issue.)
      And of course this also means that as we, and our end user clients, consider infrastructure investments,

    

Avaya, Nortel, NEC Unified Solutions, Alcatel, Cisco  and  Siemens representatives may also have seats at the table. We as consultants will need to manage these relationships if we want to stay involved, and relevant.

      It is also no coincidence that many, if not most, manufacturers have established consulting divisions. These groups help place hardware and software, sell services and establish long-term “solution provider” relationships. Indeed, the days of long-term investments in standalone PBX platforms and annual software upgrades are rapidly disappearing in the rear-view mirror.

About Relationships - More Than Ever

      These days, the value chain in Figure 1, which depicts a linear purchasing process in terms of  inputs and outputs, is insufficient to describe the business relationships that underlie procurement decision-making in the era of the Internet and IP telephony. 

      In recent years industry pundits such as Andrew White have pointed out that, thanks largely to new communica-tions technologies and business process innovations, 1980s ideas about product and customer life cycles have given way to what should more accurately be called “Return on Relationship Life Cycles” that involve suppliers, buyers and buyer’s customers.

      Figure 2 depicts how interrelationships now extend from supplier research and development all the way to

customer satisfaction and its effect on buyer revenues.

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