Marty Parker
Marty Parker brings over three decades of experience in both computing solutions and communications technology. Marty has been a...
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Marty Parker | June 11, 2012 |


Cost Savings or Business Value: Industry and Career Choices

Cost Savings or Business Value: Industry and Career Choices A focus on cost reductions will usually add minimal business value, while a focus on business value may also create major cost savings.

A focus on cost reductions will usually add minimal business value, while a focus on business value may also create major cost savings.

Each day, enterprise decision-makers make an important choice: Whether to focus on telecom cost reductions or on communication-based business value. The options are not mutually exclusive, but a focus on cost reductions will usually add minimal business value while a focus on business value may also create major cost savings.

Making the choice is not always obvious, but it is a choice just the same. The way to see which choice is being made is to look at how the organization and the people are spending their time and their budgets. Whether you represent a communications vendor or you work in an enterprise Telecom or IT department, you can see these choices being made all the time.

Here are some typical characteristics showing the contrast between the two options:

* Cost Reduction:
--Spend time with infrastructure vendors and carriers.
--Read lots of product announcements.
--Vendor presentations emphasize their great technology.
--Work primarily with the incumbent communications vendor.
--Upgrade existing systems rather than testing new options.
--Have a SIP trunk cost-saving initiative.
--Move to IP-Phones for telecom system TCO.
--Don't do any BPA (Business Process Analysis); no BPA staff.
--Few or no CEBP (communication-enabled business process) apps or pilots.
--Keep looking for reductions in current maintenance contracts and cost.

* Communication-based Business Value:
--Spend time with operating departments, lines of business.
--Read lots of case studies.
--Vendor presentations emphasize business improvement opportunities.
--Explore innovative vendors, whether incumbent or not.
--Avoid upgrades or migrations of incumbent systems, unless there is business value.
--Look for more efficient topologies (Ethernet backbone, cloud communications, even SIP).
--Grow the use of new devices, shrink the number of phones (TDM or IP); reduce TCO.
--Hire or train BPA roles in your team, specializing in finding CEBP applications.
--Have one or two CEBP-type pilots always running to prove business value.
--Optimize TCO and Maintenance costs as part of the new solutions.

Both options improve the business, of course. But an important distinction between the two is that the time and money that are consumed in pursuit of cost reductions usually reduce or eliminate the ability to pursue business value initiatives. A common statement is, "We just want to migrate to Voice over IP so we can move to SIP trunks, then we can build UC (surrogate for 'business value') on that new platform." When this happens, the enterprise may well lose two or more years in new application adoption to those enterprises that are focused on business value first, with cost savings as a benefit.

It is also worth noting that almost all of the new Unified Communications solutions for increasing business value can also produce a major technology cost reduction, since the new methods are so much more efficient and usually have lower licensing and maintenance costs.

Of course, we have seen a similar set of questions in the contact center market in the past two decades. Most of the innovation and spending came from proving that new methods would deliver business value and staff efficiency. Cost reductions for contact centers focus on the savings in labor and time for the customer facing staff rather than simply on minimizing technology costs (e.g. of legacy hunt groups).

Perhaps you want to take a look at this question. Maybe the cost reduction choice feels right for you and your company. That's fine, but realize this choice leads down a road of constant reductions in headcount and spending and has the risk that business value solutions based on other technology platforms (e.g. communications built into business application software packages) may ultimately take over some or all of the communications functionality.

But, if the business value choice feels best for you and your company, begin to spend your time and budget on finding the places in your enterprise where the new technologies of Unified Communications, Collaboration and Social Business, blended with your enterprise’s business processes and business applications, can transform your enterprise’s operations and workflows. You can do this one process or one department at a time; it's not necessary to do it all at once. When you're done, you will be working for a more profitable enterprise or more efficient public sector entity, likely with increases in customers, revenues and market share or services.

By the way, if you want to pursue a business value path and your organization (vendor or enterprise) doesn't see things that way, maybe it's time to polish up your resume. Enterprises that value growth and innovation are always looking for people who have a passion for that business style. And, good luck on your journey, whichever choice you make!


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