Discovering the silver lining
business driven IT investment
Seeking out the investments that support business challenges
In the depths of recession many businesses took traditional, reactive cost-cutting measures such as pay freezes and reductions in departmental budgets to get through the toughest parts of the economic winter. However, as we begin to see the green shoots of recovery, many businesses are now looking at where they can make investments that will both stimulate growth and still deliver long-term savings. One area of opportunity is in the technology businesses are deploying, where there is the potential for reducing expenses by consolidating networks and providers, along with many more areas where infrastructures and applications can help to deliver cost savings.
It’s vital that businesses make preparations now for recovery. The investments that can offer businesses the greatest edge are the ones that create organisational agility enabling rapid structural, process and systemic change. Higher bandwidth networks, managed video conferencing and managed exchanges, for example, help to reduce costs in less obvious areas.
Put simply, this is about investing in technology that enables innovation and evolution, to help increase customer loyalty and allow organisations to become more responsive. And, when better times return, the organisations that have prepared in advance to exploit new opportunities could find themselves in the strongest market positions.
The telecoms solutions that could give the greatest competitive edge are the ones that address both challenges: allowing critical business change as well as providing innovative ways of taking cost out.
Managing cost and quality
Outsourcing is a tried and tested method of cutting expenses but contrary to what’s often believed, it doesn’t need to be about handing over control of a whole network or entire business process. It’s important for organisations to look at whether outsourcing smaller aspects of their communications would be more cost-effective, and also give better quality of service.
To do this, it’s necessary to weigh up the cost and performance expectations of outsourcing, against the resource and expertise needed to run services in-house (the expense of which extends beyond basic salaries to hidden costs like training, desk space and overtime for out-of-hours support). For example, a business relying on a high-level of email performance might benefit from a managed email solution, where all elements (such as security, storage, mobile access and business continuity) are provided by a third party. Compared to the resource needed to run this in-house, a large communications supplier can provide a lower cost of ownership simply because of the economies of scale and expertise it can offer.
Cable&Wireless Worldwide recently migrated NHSmail to an outsourced email service. NHSmail, the secure email and directory service for NHS staff in England and Scotland, provides secure transfer of data between user accounts, vitally important when dealing with sensitive clinical information such as test results. Over a period of 12 weeks, 350,167 user accounts successfully moved to the new service covering 1,381 organisations across England and Scotland, making this the largest migration of its kind in the world.
As a result of the improvements NHS staff have access to a vastly improved communications tool, including a new email service that will mean faster communication between clinicians and better patient care, as patient information will be obtainable much more speedily and securely.
Performance vs cost
Many new-wave communications services can help to transform the way organisations do business – and there are many more that offer clear benefits, like Customer Relationship Management (CRM), supply chain management and Enterprise Resource Planning (ERP) applications. But, if the right network isn’t in place, then the Return on Investment (ROI) for these bandwidth-hungry services can be seriously impacted by the need for expensive bandwidth upgrades.
Working with a supplier that offers a multi-service next-generation network (NGN) helps organisations to keep network costs down and gives them access to advanced IP-based solutions which are much more flexible, robust and scalable than legacy services. This also means that adding applications or sites, or increasing bandwidth, is much less expensive, risky and time-consuming compared to a traditional infrastructure. For organisations with international operations, it’s also important to consider a provider with global capabilities. By doing so, companies can avoid the cost and complexity of using different suppliers in different locations, and the impact on service performance (and customer experience) that can result.
But throwing greater network capacity at the problem of demanding applications is not enough; using existing bandwidth more efficiently is a vital part of greater cost-effectiveness. Application Performance Management (APM) solutions offer vital visibility of an organisation’s infrastructure, including network performance, to show areas where problems are occurring, allowing changes to be made that can dramatically improve utilisation and application performance. APM not only helps to boost the ROI for the applications and services running over a network, but ensures that you make full use of existing capacity rather than having to keep adding bandwidth.
Similarly, centralising applications in fewer data centres gives staff access to all corporate resources, irrespective of location, without the cost of rolling out services to each individual site. Intelligent management of these services and the infrastructure they run on is essential as this strategy can put pressure on bandwidth as well as performance, if not maintained properly.
Using the expertise of a third party supplier can help here; along with APM, services such as managed hosting, can provide a streamlined, consolidated platform for running applications centrally and one that can scale as the needs of the business change. Managed hosting is ideal for business-critical applications; here, the supplier provides optimised hardware and high-performance management of the virtualisation layer and operating system, leaving control of the application in the hands of the organisation’s IT team. This helps to improve business agility and productivity, reduces cost of ownership and frees up in-house resource so that they can focus on core competencies.
Video conferencing may have had bad press in the past because of the poor user experience that traditional services offered, but that has all changed now. The new wave of Managed Video Conferencing (MVC) solutions provide such a high-quality, user-friendly experience that they’re now a genuine replacement for face-to-face meetings. Users describe the experience as being like sitting in the same room as the people they’re meeting.
Using MVC solutions boosts productivity by taking out the ‘dead’ time created by travelling and, since people in disparate locations can get together at significantly shorter notice, it’s possible to dramatically reduce the sales cycle, improve time to market, and make decisions faster.
At the same time, MVC can help cut expenses. As well as the clear, and very significant, cost savings created by reducing travel, video conferencing helps to trim the amount of resource needed within an organisation.
Cable&Wireless Worldwide and Regus, the world’s largest provider of flexible workplace solutions, are engaged in a joint initiative to implement high-definition video conferencing suites at Regus’ premier global business centres. Regus locations in world commercial capitals are being fitted with the suites, giving business leaders a genuine alternative to executive travel.
It’s also well worth considering solutions that allow a more flexible use of resources. For example, setting up virtual call centres allows incoming calls to be flexibly routed to different sites, and even to employees’ homes, depending on the time of day and the amount of call traffic. This enables businesses to get more from each employee and improve response times and customer service. The less obvious benefit is that, by giving staff more opportunities to hotdesk or work from home, it’s possible for a business to reduce its property estate, and all associated costs (such as rent, heating, lighting and car parking).
Bringing mobile into the fold
Most organisations are aware of the benefits of consolidating voice and data networks, but mobile has always tended to be a standalone service. The next generation of fixed mobile convergence (FMC) solutions has changed that, by allowing organisations to converge voice, data and mobile onto a single network. With FMC, calls made in the office are routed onto the internal data network and, when the user leaves the building, the call is seamlessly transferred onto the mobile network.
Since about 50% of all business calls made in the office are from mobile phones, transferring them to one voice solution and removing the fixed legacy estate enables costs to be dramatically reduced. The time and complexity of managing different suppliers for fixed and mobile voice is also removed. At the same time, organisations still get the benefits of using mobiles; always being contactable, and having a single number and mailbox for each individual means that customers, suppliers and colleagues receive a more seamless communication experience.
Tesco is already taking advantage of Cable&Wireless Worldwide’s Fixed Mobile Convergence (FMC) solution for its employees. FMC, a service offered exclusively by Cable&Wireless Worldwide in the UK, is enabling Tesco staff to use their existing mobile phone for all calls – operating as a fixed line phone in the office, and roaming on to a mobile network when outside. The service better equips Tesco’s ‘mobile’ employees, such as logistics staff, as well as significantly reducing its call and equipment costs.
Finding the right tool for the job
Many businesses are failing to take advantage of technological developments, simply sticking with the same old services because that’s what they’ve always used. Regularly reviewing what’s available can reap dividends. New technologies, especially those based on NGNs, might be able to offer similar or greater performance for less cost than older services, and with more flexibility to meet future needs.
Digital Subscriber Line (DSL) connectivity has traditionally been seen as nothing more than a basic consumer broadband service, however, the advent of DSL provided through an unbundled exchange, in conjunction with an NGN, has created high-bandwidth, high-performance services suitable for business needs – offering a much more cost-effective alternative to Leased Lines. In the same way, IP Virtual Private Networks (VPNs) used over an NGN infrastructure offer a high level of performance and scalability but at a lower cost point than dedicated links.
Similarly, organisations are often over-specifying their networks simply because a small proportion of sites need a high level of performance. To tackle that, it’s vital to work with a provider that can offer a flexible range of bandwidth along with resilience and security options tailored to the needs of individual sites and parts of the business.
Making it to the finishing post
Few would argue that, in the race to turn the recovery into business success, there’ll be clear winners and losers. Those that use the upturn as an opportunity to strategically invest in tools to drive further savings as well as growth will ride the new economic wave and emerge stronger, faster and more agile.
(ITadviser, Issue 62, Summer 2010)