Telecom Cost Reduction Checklist

Note: The following is in no particular order or priority, and is by no means complete, but is meant simply to indicate the range of cost reduction possibilities we may evaluate for our clients.

Teleconvergence:

• Performs traffic engineering and evaluation to determine real bandwidth and trunking requirements, identifying underused or unnecessary facilities (as well as overextended ones).
• Creates statements and/or diagrams of the existing network and usage patterns, outlining financial opportunities to save money.
• Identifies circuits or services for which a client is contractually obligated but underutilizes as determined by SMDR traffic analysis and which can be:
  • Downsized or otherwise cost-reduced in exchange for modification of other contractual obligations which have no negative effect on the client
  • Beneficially modified or reused to provide redundancy or backup for critical facilities or services in event of unexpected demand or emergency contingencies
  • Parleyed or renegotiated to obtain additional needed circuits or to initiate bundled services that meet new or anticipated demands at little or no additional cost, or that provide additional cost savings over existing technologies or methodologies
• Identifies circuits or services that should logically exist but for which billing is ambiguous or which may be mis-billed and/or overpaid elsewhere
• Creates statements of contractual obligations
• Creates statements of contractual opportunities (Ambiguities and discrepancies, wiggle room, possible consolidation tradeoffs)
• Determines billing irregularities
• Determines if suppliers are billing contrary to contractual terms or tariffs or FCC regulations
• Evaluates contractual obligations to reduce costs where possible, increase coverage when necessary, and renegotiate on favorable terms as soon as we can. Examples of such contractual obligations are:
  • Long distance and International Calling agreements
  • Cellular Agreements and Usage
  • Data Networks and Internet Bandwidth
  • ISP and Managed Service Agreements
  • Equipment Leases
  • Maintenance Agreements and Time & Material Agreements
• Accumulates many of the details that will be required to issue an RFP (Request for Proposal) or RFB (Request for Bid) for new or replacement services
• May ultimately ask such questions as:
  • Why does so much capacity or capacity exist in this area, when demand or usage doesn't seem to justify it?
  • If this area is so important, and you've concentrated services under one supplier/circuit, etc., to save money, what plans exist to back up this circuit/service if it goes down? In other words, what's your Plan B?

Key Concepts of Telecom Cost Reduction

Frankly, I never expected to save as much as you said we would. .. Thanks again for your help. I'd be glad to share our positive experience with any of your clients that may have any questions.

Patrick L. Delaney, Controller

Landry's Commercial Floor Coverings

Key Concepts

• Short-term gains with lasting impact.
• Result turnaround frequently within 30-60 days.
• Potential for lower recurring costs, refunds, reduced billing complexity.
• We don't just look at bills to try to save our clients money.
  • We also evaluate contracts to determine the difference between what a client is obligated to do and pay and what they are currently doing and paying.  We also highlight when clients are unnecessarily exceeding minimum obligations.
  • Similarly, where appropriate or necessary, we will attempt to find ways to void or modify or offset existing agreements, especially for usage services, either by freeing up or redirecting existing usage or by identifying currently contractually unencumbered usage and either renegotiating it for less or else routing it via alternative means.

Notes:
(1) Although every item on this list is strictly limited to reducing telecommunications costs, a key aspect of the Teleconvergence approach is the use of telecommunications and other technologies as a strategic weapon to "cost-effectively" achieve other business objectives in marketing, finance, security, and operations. See the Strategic Telecommunications Planning (STP) and Strategic Telecommunications Marketing (STM) sections for more details.

(2) Cost Reduction may be a means to a different end. For example, consistent with client priorities, the objective may not be reduced costs per se. Instead, the plan may be to use savings or refunds to partially or wholly offset costs for increased capacity, robustness, or reliability. The savings may add a new level of redundancy or backup or may even allow an entire disaster planning contingency plan to be put into place. Similarly, while savings can be reinvested in Procedural Strip Mining projects, part of STP, such projects can create significant savings by themselves.

CDR-SMDR (Call Detail Recording)

CDR (or SMDR) is a concept that incorporates software, hardware, and business operations.

CDR processes telephone call information (date, time, calling/called numbers or extensions, duration, etc.) stored within most telephone systems in conjunction with other software and hardware to perform management reporting, cost allocation, and fraud prevention procedures.

The most expensive aspect of employee telephone abuse never shows up on your telephone bill. CDR identifies it, tracks it, and proves it.

Teleconvergence determines your needs and then selects the most cost-effective solution for your purposes.

Among CDR's’s other capabilities and benefits are:

• It detects and compiles usage data from phone systems, users, and sometimes carriers to:
  • Identify calling patterns and call volumes
  • Identify parties making calls, both outgoing and incoming (where possible)
  • Identify parties receiving specific calls or groups of calls
  • Identify calls to porn numbers or undesirable destinations by the calling extension
  • Identify and pattern unauthorized calls to competitors and/or key suppliers
  • Eliminate any need to manually key in long distance carrier project codes
• For time (re)billing of professional services, it captures incoming and outgoing calls, including client or project codes
  • With some phone systems, CDR captures and automatically (re)bills for time spent on internal calls and even voice mail messages.
• CDR allows Teleconvergence to employ traffic engineering to determine the correct number of trunks and/or the correct amount of bandwidth required rather than relying on invalid oversubscription rules of thumb
• CDR helps detect unusual calling patterns that characteristically represent hacked systems, calls to drug traffic-related locations, calls to pay services, etc.
• CDR allows management to document and substantiate cases of telephone abuse and excessive nonproductive work time.

Not all firms have excessive usage costs or suffer from telephone abuse or fraud.  But without the right tools and knowledgeable interpretation, how do you know yours isn't one of them?

Contingent Consulting and Auditing

Contingent telecommunications auditing and cost reduction is a consulting service whose time has long, long gone. We don't do it any more. This article tells why and explains what we do instead.

Today, although contingent work may work out for the consultant, it's inevitably going to be a bad decision for the client.  Consider the basic equation. A consultant shows you ways to reduce costs. If you accept the recommendations, the consultant implements them and your bill does down. You pay the consultant a percentage of the monthly savings over the next two to five years.  In such a perfect world, everyone wins.

When was the last time you thought the world was perfect?

First of all, the promised savings occur only if nothing changes. Suppose your call volume goes down because you're had layoffs or you're using e-mail instead of making calls.   Yes, your costs are lower, but it's because business is down and you're spending less, not because you're saving money, and especially not due to a consultant's recomendations. So do you owe the consultant more? Or less? Would you even feel right about paying the consultant the same monthly fee?  Is this really what you had in mind?

Similarly, if you start spending more, say, due to increased international calling, for example, does your savings percentage remain the same and so do you owe the consultant the same? Or do you owe more? Or are you saving less, and so should you pay the consultant less? Who decides? Such situations easily get very messy, and inevitably at least one party becomes dissatisfied.  And it's usually the party that has to pay the consulting fee regardless...

Here are three other very important factors to consider:

1. The Risk of Foreseeable Consequences

Remember, the independent contractor retained to perform the contingent work has no long term responsibility for unexpected results or negative repercussions.  If savings don't materialize, no payment is normally due. As is frequently the case, however, the savings may materialize, but at hidden risk. And regardless of your risk or loss, no matter how severe, the contractor does not have to compensate you.  Here's just one example:

Say your consultant recommends that you consolidate all your voice and data telecommunications on a T1, eliminating separate trunks. Let's even say it actually saves you some money, as promised.

However, a T1 is a single 4-wire circuit. If that single circuit is cut or one or both pairs of wires is mistakenly reassigned by the local phone company, it can take hours or days to relocate them and to restore service. With fiber optics, cross-connects are virtual, possibly complicating matters and potentially taking even longer to diagnose and resolve. 

If you are without telephone and Internet service for half a day, much less a few days, can you really ever save enough to compensate for the risk?

2. The Other Side of the Equation

Teleconvergence has expertise not only in risk analysis, but also in opportunity evaluation. Suppose we could show you how to increase productivity or how to add additional services or capabilities at no additional or even slightly additional cost? Wouldn't you want us to present to you and justify the recommendation? On a contingent basis, no consultant would even mention it because it wouldn't save you any money and thus wouldn't earn the consultant a fee.

We won't allow ourselves to be placed in a situation where we cannot do all we possibly could -- or should -- for a client.  So we won't perform any contingent work at all.

3. But aren't Audits worthwhile? Of course.

We will still audit, of course, just not on a contingent basis. And we audit not just bills, but contracts and leases and other obligations.  And even if your billing is correct, we still may renegotiate agreements for better future rates -- or free services -- because it's a buyer's market.  Teleconvergence clients don't have to be billed incorrectly to come out on top.

We insist on the right to give our clients any and all recommendations we deem appropriate, even for changes that may increase cost because they might greatly reduce risk or eliminate future uncertainty. Clients are under no obligation to accept anything we suggest, of course, but at least as our client, you'll be aware of your alternatives.

Businesses succeed in part because they profitably balance costs and benefits, risks and opportunities. Looking at only one side of the equation is like driving with one eye. A person can see, it's true, but without adequate perception.

If you decide to retain Teleconvergence for our perspective, why would you want us to wear blinders?

And if you like the way we think, why not give us a call to discuss how our thinking may benefit you?

Introduction to Teleconvergence VoIP System Consulting

Since VoIP is a technology, it can be used for many applications: a telephone system; a private or public, local or long distance or international network; to save money on long distance or international calls; to connect multiple physical locations or to extend one's presence to virtual locations; to reduce operating costs or to enhance operating capabilities, etc.

While there is much in the technology that is new, there is very little it can do that hasn't been possible for quite some time using older technology (This is currently quaintly derided as "Legacy." We'll discuss that a little later).

Before you start reading about alternative IP-PBX scenarios, here are some working definitions of the relevant terms. A PBX or Pabx simply refers to a telephone system with an attendant (live or automated), a central system (real or virtual), and numbered extension telephones associated with individual users. A Pabx that uses VoIP is simply a Pabx that uses Internet Protocol (or IP) technology. Such a system is frequently called an IP-PBX.

It is important to note that these systems can be housed on your premises or they can be shared remotely by tens or hundreds or thousands of companies, in which case they are called "Hosted Systems"."They range in price from free Open Source software  to proprietary hardware and software costing millions of dollars.

In fact, the possibility of a client offering VoIP service for resale is raised twice elsewhere in this site. 

• It is mentioned in the section Strategic Telecommunications Marketing, notably in the article, Tenant Services Help Pay the Rent."In this context, a client turns an operating cost into a new revenue stream.
• It is the focus of the other section on VoIP, VoIP Business Opportunity Development. Here, the discussion is about entering or bettering one’s existing position in the VoIP or other segments of the telecommunications industry.

The next part of this section is Some IP-PBX Alternatives and Scenarios.

Some IP-PBX Alternatives and Scenarios

Interestingly, the main reason many executives have for wanting a new IP-PBX telephone system is that it is the only alternative they've been offered. This is unnecessarily restrictive and does not reflect the range of real choices available to businesses today.

What are some of the options (which may or may not apply in any given situation, of course) potential buyers actually have?

1. Expanding or updating a current non-IP system. Even if the existing system is at capacity, most systems come in families, and a larger version may be available. Now, it may not be available from your current vendor, or at least not until the vendor faces losing your business. However, making the vendor face the facts without endangering the relationship is merely one of the functions of a competent consultant. Since Teleconvergence only recommends systems with multiple sources of supply and maintenance, alternatives are always at hand.

2. Expanding or updating a current non-IP system by adding VoIP capabilities where needed. Note: in general, they are not needed everywhere. Most good-sized phone systems work perfectly well in Legacy/IP-PBX form. Think of it as a hybrid: if it works for a car, why can't it work just as well for a telephone system?

3. If your existing phone system would be good enough if it wasn't too old to be any good any more, consider purchasing a newer preowned system that's the same as yours -- perhaps one with a larger capacity -- and using the extra equipment as a virtually free source of free cards and telephones.

4. If your system is getting old and replacement parts and models are unavailable or the feature set is also antiquated, consider purchasing a different but newer preowned Legacy system from a company that has recently purchased an IP-based system, whether they really needed it or not.

5. Using VoIP for some locations, but not all, and not necessarily for the main location.

6. Purchasing a new VoIP IP-PBX. See it really is a choice, just not the only one.

7. Instead of buying your own system, use a Hosted IP-PBX service to satisfy your needs, for headquarters, or for your branch offices, or even both.

Teleconvergence isn't biased against technology or VoIP (after all, part of our practice consists of helping clients determine whether to get into the VoIP business), but we do think a company should consider its alternatives based on its needs, not on the latest technology or what the first three salespersons you contacted said you should buy.

As we do elsewhere in this section, we'd like to again suggest that you read the information in The Teleconvergence Process, especially the first part, Selecting a System --- And Getting it Backward. The information will give you a good idea of whether our approach is right for you.

VoIP Myths and Reality Checks

The following are often presented as flat statements, truths, if you will, about VoIP. There are undeniably elements of truth in most of them, but absolutely, positively true? 100% of the time?  Harrumph. You be the judge.

"You'll save money" Compared to what?  If your current system is functioning, the new one is an expense, period. Can you save money on long distance calls? Perhaps you can get VoIP domestic long distance for only a few cents per minute (quality business VoIP is Not free). However, traditional long distance is generally available for only a few cents more.

When you look at the total cost of implementing VoIP to be able to save, perhaps, two or three cents a minute, it takes a very impressive number of minutes just to break even. And the more minutes you use, the less traditional long distance costs -- if you negotiate properly. (Something else a competent independent consultant is good at doing on your behalf!)

Can you save enough on international calls? It all depends on where you call. VoIP international rates can be significantly lower than traditional rates, but the greatest savings show up on routes of much lower quality than traditional ones. Can you really save enough money to justify you or your customer not being able to hear each other clearly?

"New IP-PBX technology is better and more reliable" More reliable than what? Phone systems ran for years without any loss of service whatsoever. To the degree that  IP-PBXs are based on computer technology, they're as reliable as, well, computers. They can be made robust and redundant, but so were traditional legacy PBXs, which, in the days of the old Bell System, were actually designed to last for 40 years – and did.

In fact, let's talk about PBXs. The term Legacy began to be used by IP-PBX vendors at the beginning of this century to refer to non-IP-based systems. Why "Legacy"? Mostly because the IP vendors had to imply obsolescence without being able to prove it. Especially at the beginning, existing "Legacy" systems did much more and did it much better than the new ones. Not even mentioning how much more reliably.

Legacy systems are presumably "do nothing" systems, but they are reliable. IT may expect to change systems every three or five years, but knowledgeable management knows this isn't necessarily desirable -- and it isn't necessary, at least in the case of traditional telephone systems.

Why do vendors scoff at Legacy systems? Perhaps because they last too long, usually long enough to allow the owner to avoid replacing them on a vendor's preferred time schedule. Or else perhaps because, under close scrutiny, an existing Legacy system's life cycle is longer than that of the vendor's replacement product.

It is interesting that many vendor's products become obsolete (or cease being supported) long before they can even be categorized as "Legacy." Put differently, why do some vendors help you plan for obsolescence rather than prevent it from ever occurring with their own products?

"Unified messaging is made possible by VoIP." An interesting theory, but articulated only by the ignorant. Unified messaging (voice mail, e-mail, and fax available in a single in-box) has been around for more than 20 years, running on pre-Windows operating systems like DoubleDos and OS2.

"VoIP allows companies to operate with a single dialing plan anywhere in the world." True, but the Bell System was putting together such networks for companies more than forty years ago. It is far easier and usually less expensive to create such networks using VoIP, but it is not new.

Does this all this seem as if we're negative about VoIP and IP-PBXs? It shouldn't, as we explain throughout the site. We are not against technology. We are against treating technology as an end rather than simply as a means to achieve a business objective.

For a balanced discussion of  the subject, please turn to the last article in this series, The Promise of VoIP.

The Promise of VoIP

VoIP will play an increasingly important role in technology as the Internet gradually supersedes what could be termed "Legacy" platforms such as circuit-switched telephone networks, television airwaves, even traditional radio. This will happen not because the old telephone network or the airwaves don't work: they obviously do.

But the Internet -- with VoIP representing the part of the Internet used for voice communications -- will become dominant because its inherent interactivity simply makes for a richer and more rewarding communications, informational, and entertainment experience.

What Teleconvergence does is help our clients take advantage of this technology to better achieve their business and strategic objectives.

Please spend as much time as you like or as long as it takes to determine whether we can help you and whether you might like us to.

When you're ready, drop us a note or, better yet, give us a call. Everything here is about we can do or what we've done for others. At some point, when you're ready, it'll be time to discuss what we can do for you.

We look forward to the conversation.

A Brief Continuity Planning Checklist

Do these scenarios really apply to your organization, and if so, how ready are you to deal with them? Read the following checklist and make your own determination.

• If you run a school or manage another type of campus and there’s a terrorist incident on your premises, say a shooting, what would you do?
  • First, do you know how to go about locating the perpetrators? After that, how to inform the authorities, how to evacuate which persons from what buildings and what areas under what circumstances and bring what other personnel and assets to bear on the situation?
  • In short, what’s your plan?
     
• If your communications capabilities were suddenly and significantly impacted and diminished, have you (a) identified the organizational processes with the highest priority or those most susceptible to interruption and (b) either already pre-reconfigured your facilities or else determined how to do so in the event of such a disruption?
   
• Are you familiar with your options in event of telecom supplier bankruptcy? Some telecommunications agreements require you to remain with your supplier regardless of quality of service during such a period because bankruptcy is specifically defined as a condition that preempts or supersedes any contractual escape provisions in case of vendor non-performance.
  • Do you understand where you would stand in such an event, especially if your normal telecommunications traffic is largely or completely committed to your existing vendor? In other words, what’s your Plan B?
     
• If there was a pending natural disaster, say a hurricane or an ice storm or sudden high winds were pushing a flooding river over its banks towards your building, are you prepared to contact everyone necessary, either to keep them away and safe from harm or else to mobilize them to participate in emergency operations?
  • And how are you prepared to keep operating under such circumstances?
     
• Similarly, suppose there had been an unexpected flood or explosion and you had to alert your employees not to come to work and tell them where to report instead, divided into different groups at different locations at different times.
  • How do you give supervisors one set of marching orders and your employees a different set of instructions, all basically simultaneously? That's your plan C, remember?
  • When you have people due to report at certain times and places, how do you reach them in time to redirect them, especially when their emergency reach information changes based upon whether it’s day or night, weekday or weekend, etc?
  • How do you arrange for emergency numbers to be called so that employees can reach up-to-date information and instructions about how to carry on the business under extraordinary circumstances?

Almost Every Business Needs a Plan B. Some Just Need It More Than Others

At one time or another, every business owner thinks about what might happen if primary telecommunications facilities were disrupted or become generally unreliable. Many managers who have experienced such events take steps to ensure non-recurrence, such as using backup carriers and networks. Unfortunately, many of these plans turn out to have the same Achilles heel, meaning very little if any additional protection has been obtained.

We've had clients who thought they were adequately protected by having two suppliers. It always makes sense to use multiple suppliers so that if one is performing poorly, traffic can be shifted to another. It's a good, basic Plan B. However, in most buildings, all telecommunications facilities are located in the same area, so if that area is damaged by fire or water, all facilities are equally at risk, and nothing is gained.

Some clients have taken the extra step of running separate feeds from different suppliers into different parts of a building. This affords greater protection, but it's also happened that some distance off, the separate feeds had the same route to the client – and a backhoe pulled up the cable(s) before the feeds diverged – with obviously disastrous results. Did the client need a plan C? Perhaps, but at least having a plan B offers greater safety than a single plan A.

Teleconvergence helps our clients decide what they will do when Plan B also fails, as it inevitably will.

Procedural Strip mining (PSM) and Business Analysis

Introduction

Over time, we’ve come to realize that systems client management thought were operating poorly or were being stretched beyond capacity were in fact being underutilized.

They were also underperforming because system users were caught in a quagmire of cumulative workarounds that reflected neither their job descriptions nor the work they were supposed to be doing. Instead, daily work flow required continual and time-consuming sidesteps of catch 22s that had to be overcome to get any real work done at all

Procedural Strip Mining (PSM)

PSM uncovers and analyzes existing processes and procedures within the client's environment that, unknown to the client, reflect either (a) workarounds or (b) existing undocumented requirements that are being met outside published work descriptions.

Unless documented, detected and corrected, such activities will be nonproductively perpetuated in future systems, creating still additional tiers of workaround activity to enable the unrecognized work processes to continue. The PSM approach either eliminates this activity or uses technology to integrate and automate it. In either event, the cost reductions and productivity improvements are both predictable and documentable

While some of Teleconvergence's work is strategic, other aspects are simultaneously tactical and practical. PSM is bottom up, focusing on actual needs of individual business users in the context of a potential technological solution. It is natural for us to look for ways to apply technology to help such users achieve their objectives.

It is not as obvious that we also expend effort and time identifying and eliminating tasks and processes that are unnecessary in the first place. Since our intentions align employee objectives with those of the organization, we find very little resistance to exploring avenues of improvement that would simultaneously benefit both.

Business Analysis is part of our basic perspective and approach to project management and system evaluation. Systems don't just do things. They exist to perform processes that lead to the satisfaction of business objectives. We can't articulate your requirements until we understand your business needs, future plans, and operating priorities.

The Teleconvegence Process section explains this in detail, so our services in strategic operations, including PSM, shouldn't come as a surprise. Teleconvergence is admittedly a different kind of firm, and it is the Process that differentiates us.

Since Teleconvergence normally performs PSM along with our other functions, incremental cost is minimized, and we're under no obligation to keep digging and digging until something is discovered. There's far less functional disruption and staff resentment as a result, since if nothing procedurally redundant or superfluous turns up during our fact-finding and interviews, we quickly move on.

Moreover, management will be far more willing to take steps to correct deficiencies when newly-determined procedural efficiencies and insights can be implemented either in conjunction with a new system, or by modifying existing systems and procedures to eliminate unnecessary workarounds.

This is how Teleconvergence can identify unique client needs that, if satisfied, result in optimal system or software selection and how we determine the requirements for the platform upon which much of an organization's future productivity can be predicated.

In most cases, there is neither the corporate will nor a driving need for a major shakeup. PSR makes sense for most organizations because most organizations do not consider themselves either completely broken and in need of re-creation (Reengineering) or even in need of major restructuring (Business Process Review).

Why Workarounds Happen

Moreover, since the last system change or upgrade resulted in the current layer of workarounds and inefficiencies, the new system will similarly have to be modified to remain consistent with the only way to "get anything done around here". This task is accomplished by employees consuming significant company time without management knowledge, inevitably accompanied by much grumbling also not overheard by management. Without a fresh look, the Law of Diminishing Returns will doubtless reapply, and the desire for a better system will again raise its head.

All of this, naturally, is independent of:

1. Any true understanding of the essential work to be done regardless of how workarounds enable a facsimile of that work to get done anyway
2. Any optimization of the new system's capabilities and features to enable it to operate as efficiently as possible.

Equally important is that, after a while, the workarounds become indistinguishable (by the workers, at least) from official work procedures designed to get the work done, which leads to "We've always done it this way because that's the way it's supposed to be done," and besides, "it's the only way we know how to do it."

Compounding the issue is the fact that, in today's downsized, experienced-workers-go-first environment, the entire departmental collective history may not be that long. That means, in other words, that no one still working may actually understand what the tasks being performed were originally designed to accomplish.

A Brief Description of the Procedural Strip Mining Process

Teleconvergence first discusses individual job descriptions and departmental/work unit functions with client management. We also try to learn the expectations at various management levels regarding the expected effects of an impending system change.

Then, however, rather than simply accepting management's statements about work parameters and process objectives, we attempt to identify and independently verify:

• What steps are really necessary to achieve the desired outcomes
• Discrepancies between formal work descriptions and the nature of the work actually being performed
• Exactly what is being achieved at each step in the process.

The next PSM phase is an appraisal of existing (meaning actual, not as formally described) work procedures, including how and by whom and in what order the work is being done.

Teleconvergence then provides management with statements of actual work requirements, documents actual work practices, and makes suggested changes to increase productivity and/or lower cost. We frequently include in our presentation our estimates of how much time is being spent, how much time could be saved, cost savings estimates based upon employees’ burdened hourly costs, etc. Some recommendations inevitably require system change, others may not.

Once management decides among behavioral and process alternatives, Teleconvergence can then evaluate system alternatives with the confidence that the entire effort will be, well, productive.

Procedural Strip Mining Results and Benefits

 PSM helps identify who is doing necessary as opposed to unnecessary work, and which work processes can be eliminated and which can be combined.  Additionally, PSM helps to identify and highlight the skillsets really needed to satisfy current and future work demands. 

Needless to say, savings not only accrue from the reduction in procedural steps and work process time, but also from the potentially lower number of employees required to perform the same work in less time. Such productivity gains from procedural modification and employee cost reduction can far exceed savings derived from productivity resulting from system change alone. In cases where productivity can be increased to the point that fewer employees are required to do the work that is really necessary, the PSM process minimizes subjectivity in any subsequently undertaken staff reductions.

When employing any of these methodologies, layoffs are neither the objective nor the solution.  It is not a simple matter of identifying who is doing the work vs. who is doing the workarounds.  Parkinson's Law ensures that any time potentially saved by using workarounds has long since been filled with other activities.  It is important to remember that each and every workaround was at one time absolutely required --at least once-- or else no one would have gone through the effort of creating it. 

Since workaround tasks are incorporated into the overall work process, a person spending 100% of his or her day on workarounds cannot be fired and the tasks left undone without the entire work process collapsing of its own weight.  Practitioners perform workarounds indistinguishably from any other tasks, except frequently, the workarounds are regarded as more prized functions because they are either seen as shortcuts or else are absolutely necessary to make everything else run on schedule.

What the presence of significant workarounds does indicate, though, is that at least some necessary work is not being done directly.  This means that either (A) needed work is not being done or is being only partially done, or, (B) if all work is being done, then there are more people involved in the process than necessary if not for the presence of the need for workarounds.

Another way to look at it is that the real productivity improvements come not from retaining the workarounders (who are generally the most effective employees), but instead from reworking the processes to take advantage of technology and simultaneously eliminating the need for workarounds in the first place.  This creates a requirement for even more efficient workers because the process itself will have become that much more effective.

Employees performing workarounds are characteristically quite flexible and capable of learning new tasks because over time they inevitably have to adapt the workarounds to new systems and procedures. Does that mean that such persons should be retained and others fired?  Not necessarily.  Only after the nature of the real work to be done is revealed once workaround layers have been shed can the skillsets necessary to do such work be determined.

Is it possible, then, to perform PSM (or other work process analysis) on a department or a function (such as order processing) and realize productivity improvements that eliminate the need for new systems?  Yes, it's possible, but so is the counter scenario that the resulting increase in productivity will strain existing systems beyond capacity and thus necessitate system change anyway. 

Fortunately, in such a situation, the organizations benefits doubly: first, because the initial phase brought increased productivity and reduced cost without the capital expense of a new system.  Secondly, because the greater work output will demonstrate exactly where (and which) new system capabilities are required to sustain the higher levels of work output and productivity.  Finally, with the slack removed from the system, it will become obvious where system robustness must be enhanced, where redundancy must be implemented, where excess capacity must be planned, where backup plans must be formulated and tested and initiated, etc.

Similarly, where the new workload requirements are beyond the capability of even the current workforce, the analysis can determine those traits and knowledge sets necessary for future productivity, help the organization recruit employees with newly validated academic or technical qualifications or work-related experience, and help the organization better recruit employees for advancement from within employee ranks based upon specific abilities rather than making do with traditional office skills or work experiences.

In fact, perhaps the definition of PSM should be changed from Procedural Strip Mining to Productivity Success Methodology…

The Teleconvergence Telecom Retainer FAQ

1. What Is The Teleconvergence Retainer Service?

It's a longer-term retainer agreement whereby Teleconvergence essentially acts as the telecommunications manager for a client, possibly working to complement IT staff in areas where they lack specific telecom expertise. Your existing staff continues to administer the day-to-day telecom function.

2. What are the telecom functions that in general can and shouldn't be outsourced, even on a retainer basis?

These functions theoretically can be outsourced

• Infrastructure, Systems, and Strategy
• Operating Administration
• Clerical Administration

These functions shouldn't be outsourced:

• Corporate infrastructure strategy
• Finance and budgeting

3. Which of those functions does Teleconvergence perform?

We perform only the first -- Infrastructure, Systems, and Strategy -- and we help train client staff to properly control the others.

4. What exactly does Teleconvergence do?

On a non-recurring or project basis we work on:

• Strategic Investigation and Evaluation and implementation Planning
• Determination of Specific Objectives
• New systems, software, and procedures to satisfy changing requirements
• Establishment of Financial Parameters
• System, Facilities, and Infrastructural Assessment
• Contractual Obligations Assessment
• Department and Individual Needs Assessment
• Telecom Contingence and Business Continuity Planning
• Procedural Strip Mining and Business Analysis

Our recurring functions include:

• Periodic Audits and Reviews Of Billing
• Periodic Review of Demands, Changes, And Opportunities
• Contract Management and Renegotiation

On a demand or planned proactive schedule we actively monitor:

• Changes In Client's Plans, Size or Direction of The Organization, Opportunistic Events
• Additions or Deletions in Number of Locations or Employees Assigned to a Particular Location
• Acquisitions and Divestitures
• Relocations, Movement of Workers From or to Home Office Functionality
• Creation of Virtual Offices, Partners, Establishment of Offices In Shared-Tenant Locations, Etc.
• Strategic Shifts in Direction Of Distribution, Call Center Orientation
• Changes In Requirements for Communications (Voice/Text/Fax/video) in Foreign Languages, Translate Among Languages, Convert From/Among Fax/Text/Voice.
• evaluate Technological and Regulatory Risks and Opportunities
• New Opportunities to Reduce costs and/or increase productivity

Finally, we help the client manage internal control and administration over:

• Telecom and other billing and contractual obligations
• Work orders
• Configuration tracking and management
• Fraud and abuse control

5. Do you duplicate the work my clerical staff already does?

Not at all. In fact, we may simplify it, since we know which invoices require constant scrutiny, for example, and which need only be looked at on anniversary dates. Similarly, we work diligently to streamline procedures and automate activities wherever possible.

6. Is the Teleconvergence Retainer very expensive?

We think you'll be pleased to discover how reasonable it is, especially compared to what you'd have to spend for full-time professional staff to do the work. It's a forward-looking process that assumes significant time usually being expended at first, then a leveling out after a while. We try to negotiate flat payments largely independent of monthly workload, similar to how one pays a utility when ignoring seasonal fluctuations.

6. Is there a lot of paperwork to get started?

Generally not, because initial estimations and activities are subject to ongoing mutual review to ensure that the client agrees with our priorities and activities.

7. How do we know that outsourcing is the right strategy? How do we regain control if we think it's not working out?

First of all, outsourcing to Teleconvergence is a financial decision, not a strategic one, So there are no long-term or irreversible implications. Secondly, by outsourcing with Teleconvergence, there's no need to be concerned about regaining control because you never lose control. You're not putting authority into anyone else's hands; by retaining us, you're simply allowing us to share the responsibility with you.

8. How big is our committment?  How long do we have to commit?  What happens if it doesn't work out?

These are all reasonable questions. You should to only what seems reasonable to you.  The initial commitment is generally for three to six months, if we've not done project work for you before. Regardless of the size or the term of the commitment, our retainers are always cancelable on reasonable notice, and all terms and conditions are spelled out in clear English (or Spanish) in our retainer agreements. 

9. How do we know if we should begin by outsourcing our telecom function or just begin with a single project?

You should begin at the beginning, with what you need the most. If it's a single project, we'll do that. If it's a few of them, that's OK, too. If you have some projects that must be done, but you're really not prepared to administer the projects or the function, we can set priorities and manage the situation properly.

But we have to start at the beginning, by finding out what you need and determining if and how we can best be of help, no matter what sort of label we pin on it. If that sounds reasonable to you, why not begin by calling us to discuss your situation?

So You Want To Compete Against Vonage (And Other Death Wishes)

It's interesting how many individuals and companies express this (apparently suicidal) wish. Why would anyone want to compete with Vonage?  This is a company successfully sued to within an inch of its corporate life for patent infringement, a company that loses money on every sale and tries to make up for it with volume but can't because of a customer turnover (churn) rate that seemingly guarantees a permanently profitless future.

The appeal of the Vonage proposition to the consumer is undeniable: unlimited telephone service, e-mail, and fax for about $25 per month.  Even acknowledging some limitations (non-standard 911, no operator service or collect calls, variable voice quality, no service during power outages, etc.), it still seems like a bargain for the user.

It's a different story for the VoIP provider. Startup and market entry is inexpensive and the technology is readily available, making the service a commodity and resulting in significant competition and thin margins, at best.  The sole remaining possible differentiator (a factor that makes one company stand out against the crowd) is marketing.

Does Teleconvergence have that single magic marketing answer?  Of course not. There is no magic answer, at least no single answer that applies to multiple companies.  If there was, smart entrepreneurs everywhere would immediately seize upon it, eliminating its value as a differentiator, and the hunt for the magic bullet would begin anew.

However, the fact that there's no single answer available to everyone does not mean that you can't identify -- or create -- one that can work for you. 

The next article,The Four elements of VoIP Success, paints a realistic picture of  participating in the VoIP market.  It will identify how to avoid at least some self-inflicted wounds and how Teleconvergence may be able to help you achieve your objectives.  

The Four Elements of VoIP Success

 If you don't know where you're going, any road will take you there.

[Alice in Wonderland by Lewis Carroll].

To begin with, you should note that we're not guaranteeing success. We're just going to identify the factors necessary for a successful VoIP business.  By themselves, all they do is allow you to participate in the industry. Whether or not you make a success out of them is up to you.  Fair enough?

Here are the factors. We discuss them in detail below.

1. The Technology
2.  The Application
3.  The Market
4.  The Business

1. The Technology

It's hard to manage something if you don't understand it.  It's harder still to make money at it.  It's not that you have to be an engineer, but there's no excuse for not learning something about VoIP basics, about the SIP protocol, and so on. Nothing elaborate, just buy a basic book about VoIP or get one from the library.  You're going to have to make some business decisions and you can't make good ones if you don't understand the business because you can't understand the vocabulary.  Just common sense, right?

We realize that it must seem as if we’re asking you to do a lot of the work: read this, read that, learn that.  That’s because Teleconvergence views client relationships as partnerships, with each party sharing the load. Why is this important?  Because this is about your company, your risk, your decisions, your business.  It's up to you to make the decisions that you -- not us -- will have to live with.  And the best way for you to make knowledgeable decisions is to actually know something about the subject you're making decisions about.  Reality check: If you simply want a solution without having to work hard to make it your own, then don't pay a consultant, just trust a vendor and buy something.  On the other hand, if you might want to use our expertise to help you make your own decisions, then read on.

Next, and this is very important, there are some things you should know about your choices and there’s a great deal you needn't ever waste time learning about. If you’ve not yet read How Teleconvergence keeps Up with Developments, this would be an appropriate time.

You should know that the equipment necessary to run your new company may be located on your premises or it may be co-located at an ISP.  It may also be hosted remotely and it may very well only be available to you over the Internet as a service.  How do you choose?  We'll help you. When do you choose? The (real) answer is: much, much later.

There are advantages and disadvantages to each type of equipment and service, but in the final analysis, it all depends on the combination of the four factors coupled with your strengths and weaknesses. If your focus is on sales, without a compelling reason to do so, why divert your energies to system maintenance?  If you’re technical and analytical and have pretty good business sense but no affinity for sales, perhaps operating a system on the wholesale side of the business would be a more desirable route for you.

The hardware and software you select should reflect your business model, not drive it.  Technology is a tool. You should know what kind of house you’re going to build before you think about the tools you’ll need to build it.

 2.  The Application: 

Since VoIP is a technology and nothing more, there are almost limitless services you can create and benefits you can provide based on it.  Some of the basic applications are:

• Calling cards
• Call Centers (Inbound and outbound)
• Unified messaging
• Auto-Attendant and Call Screening
• Dial-Around
• Hosted Service (e.g. Vonage)
• Long distance and International calling
• Multilingual voice mail
• Internet Cafe

We can help you fine-tune what you have in mind, and perhaps even work with you to expand on it, if desirable. At times, you'll need a series of services; at others, it's a set of building blocks that have to be created.

The particular VoIP applications you offer simply constitute what you want to do, the business you wish to start in the market segment you wish to enter. VoIP is what lets you knock on the door. With our help and a good plan, you'll be able to open it and walk through it.  Never any guarantees, of course; but the quote at the beginning of the article is there for a reason.

 3.  The Market: 

At one level, your market consists of the customers to whom you wish to provide your VoIP services.  But in reality, it’s far more than that.  If it's residential, your market consists of a combination of types of people in certain places with certain incomes, affiliations, ethnicities, religions, etc.  If you're aiming at businesses, your markets consist of vertical or horizontally defined entities or even participants in certain supply chains bounded by customer size, location, geography, etc.

You should have and certainly will require a good sense of your market: what it is and where it is, and especially, why you think you have or can develop a unique relationship with that market that will make you stand out from others already trying to serve that market with VoIP.

Most markets may not be being served well, but they are indeed being served somehow, and you will find competition everywhere.  If you're not prepared for that, you're not prepared to enter the business, and you should save your money and do something else.

4. The Business

We are management consultants with expertise in marketing and telecommunications.  Because of that, we can help you size and estimate your market, prepare and flesh out your business plan, and most importantly, work with you to determine if you have or can create a Unique Business Proposition (UBP), something that will differentiate your company or service from your competition.

This is what the UBP is and why it is so important.  There are really five elements of differentiation, not four: the Technology, the Application, the Market, the Business, and – you.  It’s what you (perhaps with our help) bring in terms of experience, financial resources, contacts, and vision.  To be successful, you have to combine those elements to create a different story, a better story, and the better story better be real.

The problem is, if you can't create a truly UBP, then all you have left is price. Without a unique proposition, the only way to successfully sell on price is to have lower costs.  Without a proprietary marketing or technological edge, margins on most applications, are generally so slim that you will not be able to generate the volume necessary to bring the cost down enough to have a reasonable chance to make a success of your enterprise. It's plain talk, but that's what you get from us.

In other words, you have to be able to define your UBP in order to be able to defend your decision to enter the business. Before you ever open your doors, you should be able to state why you think you'll be different enough to make a difference, and to state why you think you’ll be successful.

You'll obviously be better off finding a viable solution rather than implementing a hunch.  Using Teleconvergence as a sounding board is a solid step toward developing it.  We may be able to assist you in a wide variety of areas: product development; channel and market selection; strategic planning; positioning and differentiation, business plan preparation, and so on.

If you feel that you already have a good handle on what you want to do and can possibly use our help to move you toward your goal, feel free to read the articles suggested earlier, and look over our FAQs or anything else that will make you feel comfortable speaking with us.  If you're already there and are prepared to move forward, then this site has fulfilled its purpose and the next step is up to you.

Please call or e-mail us to establish whether and/or how we can move forward together.

Thanks for visiting.

The Very High Cost of Low Flat Fees

The Very High Cost of Low Flat Fees

The concept of a flat fee is inherently attractive to both client and consultant. The client likes it because it can be budgeted and limits financial risk. The consultant likes it because it represents guaranteed cash flow. Yet in most instances, it's a truly bad idea for both parties. Here's why.

Let's begin with two true statements. First, a consultant's most valuable resource is the time for which he or she charges. Secondly, all projects consist of knowns and unknowns.

The two come together because all projects, but especially more complex ones, contain many unknowns, or as Teleconvergence calls them, gotchas. The full extent of gotchas are unknowable before a project starts -- indeed, many gotchas are created once underway, when a client becomes aware of a new risk or opportunity and asks us to investigate or to develop an idea further. These unanticipated efforts and new directions take time to work through, and time is, well, you know, money.

Any consultant proposing a flat rate has three choices, only two of which will generally be acknowledged. Since gotchas consume unknowable but frequently considerable amounts of time, the consultant generally has to either (1) ignore gotchas while bidding or (2) hide a significant amount of contingency time in the bid to account for them. This really isn't padding the bill; it simply reflects a desire to avoid losing money on the project when an unforeseeable snag (or even a series of them) raises its head.

Any prospective client receiving an surprisingly low time estimate should beware. Just as surgeons are frequently surprised by what they find while operating, it's equally true that no consultant can foresee everything. If there is no fudge factor for unknowns, and gotchas begin to consume the project, the consultant has every incentive to not spend time and effort elsewhere. Never assume a consultant will be willing to perform all the work necessary even though he or she stands to lose a significant amount of money, despite assurances to the contrary.

What about the third choice? The third choice is for a "consultant" to bid a low flat fee and to more than make up for it by receiving a hefty commission from one or more vendors in the consultant's stable while adamantly denying it's taking place.

Which of these approaches does Teleconvergence take?

None of them.

Except for retainers, we usually don’t perform projects on a totally flat rate; we will provide a flat rate for specific work with the proviso that time expended on anything not specifically included in the work description shall be billed separately.

In general, as we say elsewhere, we have a variety of plans and we always try to propose more than one of them to a prospective client in a way that is revenue neutral for us. That allows us to simply suggest that the client select the compensation method with which he or she feels most comfortable.

The Teleconvergence System Selection Process in Detail

Step 1. First, we attempt to ascertain and define your real needs in terms of your business objectives, budget, business plan, etc. During this step, we envision satisfying a client's needs as a desired system, software, and/or process that would be capable of achieving a certain set of objectives, if not initially, then in stages. We then determine what the infrastructure must consist of initially to support that system creation activity over the longer term.

This need definition process may or may not include our modified form of business analysis or business process review, called Procedural Strip Mining (PSM) Once we understand your business requirements, we may translate them into conceptual alternatives (independent of vendor or specific technology) that meet your business objectives in order to give you an early understanding of possible operating parameters and financial business benefits and tradeoffs. We may do this multiple times to fine-tune the process and expected results.

Step 2. We proceed in a very natural and practical manner. We identify your requirements as we understand them, prioritize them, place them in writing, and get your agreement that our understanding parallels yours. We will modify the documents until everyone is on board and heading for the same destination.

Step 3. Once the final details have been worked out and we have the client's approval, we then turn those business needs into technical requirements within the context of a business-oriented Request for Proposal (RFP) that we submit to an adequate and appropriate cross-section of potential suppliers. Naturally, the client must approve the RFP before it is submitted.

Why does Teleconvergence submit only RFPs (Requests for Proposal), and not RFBs (Requests for Bid) or RFQs (Requests for Quote)? In our opinion, there are both specific presumptions and inherent bias risk dangers with RFBs and RFQs. You can read about them in Why Teleconvergence submits only RFPs. The business-oriented RFPs that Teleconvergence submits has none of the limitations of RFBs or RFQs, which consist primarily of stipulations and specifications.

With Teleconvergence RFPs, specifications are just part of an entire information package in which we present a client's situation, issues, problems, objectives, and operating issues, and at minimum, an indication of budgetary constraints. We always ask all respondents to point out any area where Teleconvergence inadvertently limits the range of possible responses or alternatives. Finally, we invite each vendor to individually develop the best possible response to the client's requirements and to work with us to optimize it for presentation to the client.

Because identical RFPs are sent to all prospective vendors, they enable all vendors to compete equally to provide the most satisfying overall solution possible. This may involve a one-vendor solution or intermixing technologies, vendors, and systems to enable a best-of-breed approach for the client's specific application.

Teleconvergence inevitably submits one or more necessary rounds of RFC's (Requests for Clarification) to various vendors to eliminate ambiguities and make the submissions functionally comparable. Taking these steps at this point eliminates probability of noncompliance and serious misunderstandings later on.

Step 4. The responses from those vendors who satisfactorily respond to the RFPs and the RFCs constitute the range of realistic alternatives and solutions. Clients thus see one or more optimized approaches in which their needs can be completely or almost completely satisfied.

A client may opt to simplify a solution or to adopt it in stages, but at least the overall solution is known and can be accepted, modified, or declined by the client. Moreover, since multiple responses may adequately satisfy the client's needs, then the client can act on whatever additional "wants" or personal priorities or preferences that may exist.

Step 5. In order to help the client better understand the responses to the RFPs, we then prepare a series of worksheets (operating, strategic, financial, technical, etc.) which we submit to and discuss with the client. Note that we do not just create and submit a report and call that a job well done; some of the work is just starting.

Step 6. We work with the client to narrow the choices, adjust the situation or system parameters as appropriate, eliminate less desirable options, then more deeply investigate the remaining alternatives. We will also modify the original worksheets to show fewer alternatives but more details in order to help the client better weigh the variables and arrive at a decision. During this time, we may also prenegotiate financial terms or maintenance terms, delivery schedules, etc. with multiple vendors simultaneously in order to arrive at total package pricing and total Cost of Ownership (TCO).

Step 7. Once a tentative decision has been made, we work with client counsel to help negotiate agreements, stipulate desired modifications to offered proposals, work on implementation schedules, etc.

Note that Teleconvergence does not normally oversee the implementation of a system. Since one of our functions is to select a competent vendor, in our opinion, overseeing or being directly responsible for the implementation would not only question the competence of the vendor, but effectively require the client to pay twice for the same implementation.

We are, however, frequently retained to periodically monitor the progress of the implementation and verify its compliance with the content of the accepted proposal, as well as to verify the completion of the project before the final payment changes hands.