Acer Inc., the world’s third largest manufacturer of personal computers, knew it had to make some major infrastructure changes to compete in today’s connected world. It was operating six distinct networks that couldn’t share information. What it needed was a single Web-based, real time, e-commerce network. “Global networking is a key to remaining competitive and prosperous in today’s rapidly changing environment,” says Stan Shih, chairman and CEO of the Acer Group.
This January Acer signed a seven year contract with AT&T Solutions to build a unified global network based on Internet Protocol. AT& T Solutions of Florham Park, New Jersey, designs, installs and manages networks for clients who want to extend their global reach by leveraging the expertise of network outsourcers.
Since each of its six networks is managed separately, Acer projects it will save $15 million over the life of the contract, says Brian Maloney, vice president and chief operating officer for AT&T Solutions. But cost savings rarely are the primary motivator. “Clients don’t decide to do complex network changes to save five percent. They are happy to have the cost savings. But they incur the cost to enable new businesses. Survival is the issue,” he says.
Acer is investing $100 million in its new network to tie together its disparate design and production facilities. The value of networking is the ability to share information – voice, data and video – with employees, clients and suppliers. The new system will link 56 sites in 37 countries. The goal is to reduce product cycles by enabling designers to collaborate easily. Customer support in more than 100 countries should improve, too.
Need For A New Network
With the explosive growth of e-commerce, companies are forced to go on-line just to stay competitive. “People want to do business from desk top to desk top, not data center to data center,” says Maloney. E-commerce, however, puts increasing pressure on the bandwidth of their older networks.
Today, corporations have to move information around the globe at lightning speed. The technology to do that is very complex and network intensive. Many corporations don’t have the infrastructure required to handle the demands of e-commerce. “Their low speed data lines don’t do all the things they need to do in this high speed world,” says Maloney.
But bigger pipes are only part of the answer. AT&T also monitors the transfer of data from Point A to Point B – much like FedEx tracks the progress of its packages. The outsourcer can determine if a pipe is broken and knows how to reroute the data around the breaking point so data transfer remains seamless for the user.
Monitoring Network Capacity
The company manages its networks from client support centers around the world. The support center in Singapore will provide the proactive management of the Acer Global Network. AT&T’s Acer management team is based in Taiwan where Acer is headquartered.
Proactivity is AT&T Solutions’ strong suit. Its network management professionals can determine in advance if a problem is brewing and intervene before the client experiences any difficulty. Most problems occur when client usage pushes the upper limits of the network capacity. AT&T staffers can increase the capacity before the client is inconvenienced.
The benchmark for network uptime is in excess of 99.5 percent. The systems that process credit cards have an uptime of almost 100 percent because these clients want redundancy. Reliable performance, as well as predictable costs and advanced technology, are the main advantages of network outsourcing.
Maloney says corporations like to outsource their networks because they don’t want to worry about its engineering complexities. “They just want to be able to use it,” he says.
AT&T Solutions can attract and retain top talent for this task because of its career growth opportunities. For example, a networking specialist at a bank can only rise so far in the corporate hierarchy because networking is not the bank’s core business. But a network engineer who signs on at AT&T can conceivably one day become the chairman.
Corporations like leaving the networking to them. Once the parties sign a contract, AT&T assigns a general manager who is responsible for the project. Every employee on the AT&T client team works for this GM. Engineering experts typically spend the first 45 days of the contract designing the network, with the rollout starting around day 60. Even though it may take six months or longer to get the entire network up and running, customers can start using the system from the first day of the rollout.
Lessons from the Outsourcing Primer:
- Building global networks is necessary for business survival in today’s interconnected marketplace because customers want to do business electronically.
- Companies outsource their networks because they don’t want to manage the technical complexity of designing, implementing and managing them. They just want to use them.
- Outsourcing provides reliable costs, predictable performance and advanced technology.
- Outsourcers are able to attract and retain top talent because of the career opportunities they provide.
- Benchmarks can include 99.5 percent uptime – or better.