Successfully maneuvering through pressure to meet time-to-market demands, reduce or contain costs, and meet internal and external customer expectations of communications capabilities is a balancing act. Quickly evolving information and communications technologies (ICT)--as well as where and how to apply them to improve the top- and bottom-line competitiveness of a business--come with complexities that plague all but large enterprises.
Most small to midsize businesses (SMBs) don't have in-house telecom experts, lack the experience to handle ongoing quick technological changes, and simply can't effectively plan ongoing strategies, manage implementations, and ensure harmonious use of communications technologies and devices on their own.
Unitil Corporation, a New England public utility holding company for gas and electric distribution operations, recognized its need for ICT expertise years ago when it turned to the Tetrion Group, an independent telecommunications consulting company based in Rye, New Hampshire.
Why Outsource for Consulting?
"Our expertise is in utilities, not telecommunications," states Raymond Morrissey, Vice President, Information Services, at Unitil. "When we roll in new communications systems, we prefer not to do the systems development and implementation on our own. And we also appreciate someone with expertise who can be a good sounding board for what's reasonable and will provide best value for our company and our customers when we're doing vendor evaluation and contract negotiations."
Morrissey says Unitil rarely uses consultants but has an ongoing relationship with the Tetrion Group for ICT matters. Headquartered in Hampton, New Hampshire, Unitil has six subsidiaries, 120,000 customers, three energy-distribution companies, four locations in two states, and a call center with 24 agents to handle customer needs. Over the years, Tetrion advised Unitil on numerous ICT strategies, including assisting with network redesign when Unitil consolidated its switches for the four locations into the headquarters facilities, upgraded phone systems and equipment, and decided to build a call center.
"We rely on Tetrion and have a great deal of confidence in its non-vendor-biased judgment," says Morrissey. Tetrion also advised on Unitil's VoIP implementation at the beginning of 2006 and also helped ensure the utility has redundant switches for its call center and headquarters office. The consulting firm also keeps it apprised of ICT developments and changes as they occur.
Tetrion's approach to building Unitil's call center started with understanding the big picture. For example, what would be the estimated call volumes? How would Unitil like to communicate with customers (by voice, Internet email or chat, etc.)? What level of service would Unitil like to provide (how quickly would calls be answered, would there be an automated IVR system on the front-end to cut down on agents handling simpler calls)? These factors helped Tetrion determine the infrastructure necessary to support the type of service Unitil wanted to provide from its call center.
Paul Neiman, Principal and Founder of the Tetrion Group, says the firm advises SMB clients with 25-800 employees who, most of the time, are not driven by a need for lower costs but, rather, are looking for solutions that will improve their telecom services, avoid pitfalls, and ensure cost-effective implementations.
He says many companies turn to Tetrion in a scenario where they have already started down the path of a telecom implementation project and have run into trouble. The project is more involved than anticipated, the budgeted time and expense are running out, and they need someone who can "speak and translate vendor language."
Neiman cites two primary pitfalls in SMBs' purchasing decisions surrounding telecommunications technologies. First, they usually don't understand that they must have state-of-the-art infrastructure to support new communications technologies. VoIP systems that consolidate voice and data, for example, require having up-to-date data infrastructure.
The second pitfall is not understanding how (or whether) the new ICT systems "will integrate with the big picture of where the company wants to go" and how the associated technologies are likely to change over time. Neiman says SMBs' budget restrictions cause them to make technology purchase decisions that are effective for meeting immediate needs but often will hinder the company from evolving later.
The Tetrion consultant advises clients to use the outsourcing model for their telecom services. The advantage with outsourcing is not just quick access to resources and expertise. As he points out, the outsourcing contract locks in predictable costs, including upgrades and maintenance, for the length of the contract. But he warns clients to keep telecom services contracts short term in order to ensure flexibility for the evolving technologies and marketplace.
He says it is also important to outsource the management of telecom bills. Outsourcing service providers have the people and technology resources to stay on top of billing errors in a timely manner and ensure the network vendors bill at proper rates and provide the agreed-upon discounts.
Turning Telecom Expenses into Value-Add Solutions
In addition to clients like Unitil in the utilities industry, companies outsourcing their telecom consulting needs to Tetrion include organizations in healthcare, education, government, manufacturing, distribution, and professional services.
According to Neiman, the healthcare industry is ripe with need for effective ICT solutions. "The complexity of their systems is surprising," he states.
He cites an example of an assisted-living organization that benefited from Tetrion's advice. Its systems for residents' emergency nurse calls, residents' personal phone services, staff pagers, and its tracking and wandering systems (for recording nurse activities, as well as for tracking expensive equipment, and Alzheimer's residents) were all standalone systems and had separate cabling.
With Tetrion's advice, all these communications systems were unified into a common infrastructure, which includes the use of smart phones and wireless connectivity. Now the nurses can respond instantly to emergencies, rely on automation for easing the burden of tracking their activities at point of care (for Medicare billing purposes) instead of trying to remember later on to write it all down, and the company has a better tracking system using wireless technology.
Such a communications solution can achieve more than more effective, streamlined services and lower operational costs. "It can generate revenue if set up properly," says Neiman. Residents entering an assisted-living community must usually obtain their telephone services from a local vendor. This can cost $60 per month if Internet connectivity is included--something most aging Baby Boomers want. "But if the system is designed properly, the assisted-living organization can use its own implemented systems to re-sell phone and Internet connectivity services to residents at a much lower price than local vendors charge. This strategy can also be used to build a sense of community for the residents," says Neiman.
"The good news for the assisted-living segment of the healthcare industry is that it's a high-growth industry. The bad news is it's also highly competitive and companies must differentiate themselves in order to gain market share," says Neiman. He points out that providing these kinds of services to residents is a way to do that and gain revenue too. The revenue-generating strategy can be applied to other industries and businesses, too.
Avoiding Implementation Pitfalls
Tetrion Group recognizes that SMBs run lean and people's time is consumed by day-to-day activities and putting out fires; they can't take on an ICT implementation project that could add 200-500 hours to their responsibilities. "We take on all responsibility for managing the implementation project and making sure the client gets what it needs and what it believes it purchased from a vendor," says Neiman.
Again, it starts with understanding the big picture of how the client company wants to operate, then writing specifications for the technology to accomplish that solution, then evaluating vendor proposals. Tetrion ensures the proposals are apples-to-apples comparisons. It also ensures proposals provide figures for growth costs and how a vendor's capabilities will grow. "Without this information, clients can end up having to buy expensive add-on technologies later on," warns Neiman.
He points out two pitfalls surrounding ICT implementations. First, companies tend to be swayed by what the vendor advises--"and that's usually a vanilla implementation," says Neiman. "A vendor's goal is to get in and out as quickly as possible. That's okay only if the client doesn't need any customization. To save money, they need to make sure of a proper set-up and customization during the implementation. Otherwise, if they decide they want more options or customization later on, they'll be on the clock for costs of the system re-design."
The second implementation pitfall for SMBs is "being penny wise and pound foolish." Neiman says many companies think they can save money by implementing the technology themselves. But implementation projects involve many unknowns and uncertainties, and it's also not unusual to encounter a vendor that can't fulfill its promise on time. These scenarios, of course, cause extra costs for the SMB and delay time to market and time-to-value realization.
"Over the past 30 years, I've been through implementation wars a number of times," states Neiman. "I can see when things are not going well for my clients. And the vendors know they have to deal with me, not my clients."
Lessons from Outsourcing Journal:
- Most SMBs don't have in-house telecom experts, lack the experience to handle ongoing quick technological changes, and simply can't effectively plan ongoing strategies, manage implementations, and ensure harmonious use of communications technologies and devices on their own. Outsourcing such matters to a consultancy with telecommunications expertise is a wise move.
- Select a consulting firm that has no bias toward any telecom vendors.
- Pitfalls associated with SMBs' telecom purchasing decisions include (1) not understanding the infrastructure that must be in place to support modern technologies and (2) not understanding the big picture of how the company plans to evolve its use of telecom systems and how those technologies may also evolve.
- Outsourcing contracts for telecommunications services lock in predictable costs but should be kept short term in order to ensure flexibility for the evolving technologies and marketplace.
- SMB pitfalls associated with telecom implementations include (1) letting a vendor do a "vanilla implementation" and then having to pay for customization and additional options later on and (2) thinking they will save money by handling the implementation project in house.
- In highly competitive businesses, telecommunications systems can be differentiators and revenue-generators.