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What are the biggest challenges facing telecommunications procurement?

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James Tucker Brexit, 5G, telecommunications...

Telecommunication procurement can be a lengthy process at the best of times, but with the current pressures facing the industry, it’s proving more difficult than ever. At a time when successful procurement functions are needed for the roll-out of 5G and other large-scale projects, uncertainty over Brexit and tensions with China could cause havoc in the industry. So, what are the biggest challenges facing telecommunications procurement?

Telecommunications procurement: lack of access to equipment

Current geopolitical factors are making access to equipment a huge obstacle for telecommunications procurement functions. Much of this stems from the recent controversy surrounding Huawei, the Chinese mobile company responsible for the invention of 5G.

As a result of the pressure from politicians concerned about alleged security threats from the company, many fear that the UK will lose access to Chinese equipment, leading to a severe restriction of their choice of suppliers. While most agree that Huawei should be kept out of sensitive parts of our networks, a blanket ban would be disastrous for the roll-out of 5G.

Unfortunately, there is already a lack of varied network suppliers, allowing for little manoeuvre in selection, and the loss of Huawei and potentially other Chinese suppliers would make life very hard for procurement professionals. The fact that the US-China trade war is more heated than ever is also adding unwanted strain to relations.

Brexit

As one of the main supply chain disruptors in just about every industry, Brexit is also causing a litany of problems, with a new report from the Confederation of British Industry (CBI) claiming that it is ‘sucking the oxygen out of priorities like 5G’. If the UK does leave the single market and customs union, the ability to import essential equipment may suffer. In fact, BT is known to be stockpiling networking equipment already to mitigate against this.

A no-deal scenario would also limit would be free flow of data, meaning the UK would need ‘data adequacy’ status for data on EU citizens to be transmitted across its borders, which may take years to agree. In the meantime, companies would have to resort to complex, time-consuming work-arounds. BT has warned it may have to amend contracts with up to 18,000 suppliers.

Access to talent

Telecommunications procurement operations heavily depend on access to international workforces – from specialists in R&D, cybersecurity to those building and maintaining physical infrastructure. However, access to talent is proving to be a huge challenge. Brexit is again playing a key role here, with many key engineers and contractors hailing from EU countries.

In the case of a no deal, there is a serious risk that this source will be cut. Some positions, such as the riggers who install and maintain radio antennas, are already suffering from a large shortage of talent, with research suggesting that an extra 3,760 riggers a year will be needed to address skills shortages by 2026.

Talent is key

While tough times may lie ahead in the world of telecommunication procurement, there are plenty of actions that CPOs can take to mitigate damage and even thrive in the current climate. Essentially, the key to success boils down to talent and doing as much as possible now to ensure that you have the correct people in place is to future-proof your business.

This will not only allow you to meet the coming challenges as skilfully as possible, but also allow you to have the resources necessary to carry out strategic workforce management in the event of any skills shortages, and weather the storm.

Have you got the right people in place to handle future challenges? Take a look at how we’ve assisted organisations in building first class procurement and supply chain functions. Or, if you’re in need of a new challenge, visit our jobs page.

Authored by James Tucker – Managing Director, 1st Executive Ltd