MDSL – making sense of the Telecoms procurement jungle (part 1)

We are without bias or favour here at Spend Matters UK / Europe of course, reporting on issues and organisations independently, fearlessly and honestly.  But it is still good to come across a British success story, particularly when it is a firm that is competing successfully on an international scale.

Ben Mendoza, CEO of MDSL

MDSL, leading players in international Market Data Management (MDM) and Telecom Expense Management (TEM) solutions, are one such organisation. Founded and still controlled by Ben Mendoza, their HQ is in Tonbridge, Kent, but they also have offices now in New York, Paris, Tokyo, Macau, and Hong Kong.

Mendoza is a software man by background (and yet another rock musician in his youth!) MDSL started when he spotted an opportunity back in 1995, when he was working with financial service institutions. These firms were spending a fortune on market data and related services from the likes of Reuters and Bloombergs. The data was critical to the operation of dealing rooms, and the success of the firms, so no-one questioned the cost too much.

“I saw an opportunity to help them manage the spend better – tracking usage, licences and so on, and then getting into helping them negotiate and put the contracts in place” explains Mendoza. And some of the sums involved were huge – one bank was spending over $1 billion a year on market data! So MDSL was born, with the blend of software and services that is still their modus operandi today.

But while they still manage $6 Billion of market data spend today, it is telecoms that is the rapidly growing area. Their clients started asking MDSL to look at that spend area as well, and there were similarities with market data; difficulty with budgeting and cost allocation internally; continuously changing tariffs and “confusion pricing”; issues with managing usage within the organisation... all areas where clients needed help. So over the last ten years, MDSL has developed products and services which have enabled them to gain a strong position globally in the TEM market as well.

Their growth has been steady (although accelerating over the last couple of years), profitable and internally funded, and with 130 staff now and over £10M in revenues this year, it is an impressive story. They’re particularly attuned to multi-currency, multi-national clients and requirements, and are another firm who have been working on a “cloud” basis since long before it was fashionable or indeed called “cloud”! In some cases, MDSL act purely as a software provider; in others, they take on a managed service role, with greater responsibility for clients’ telecoms estate and management.

MDSL work both directly and through partners; firms like Accenture get involved in deployment, and they’re just starting to sell through channel partners in different countries. They’re also considering a “lighter-weight” solution for smaller customers – but with a retention rate of 95% plus, they’re obviously doing something right with their current approach.

There’s no doubt that TEM is both a great market to be in for providers like MDSL, and is also a service that procurement, IT and business leaders really should consider if they haven’t already. The last few years has seen so many communication developments that have helped the end user, but made life more complicated for the corporate trying to get the most out of the technology, whilst keeping control of costs.

The explosion in mobile phones, then devices like blackberries and iPhones and iPads; the ability to send and download large quantities of data; global wi-fi; video and teleconferencing; all great business tools, but all with a cost attached. And the complexities of contracts, tariffs, constraints and charges is such that it’s hard to imagine any telecoms or procurement manager can properly manage this category without some specialist help.

So in part 2 of this series we’ll look at some of the pitfalls and issues around TEM, and pass on some tips from MDSL on how to manage spend in this complex area.

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