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Control the Budget: Embrace Hybrid WANs and Freemium
At Enterprise Connect Orlando, Gartner’s Sorell Slaymaker will offer his top 10 recommendations for quick wins and longer-term gains.
Controlling the communications budget is a thankless part of the telecom and sourcing manager's job, a task that isn’t going away. In the unlikely event that you’re not under a direct mandate to cut costs, cutting costs may still be a way to fund projects that can make a positive difference within the enterprise -- at a time when big capital projects may not be feasible for communications. So what are some strategies for controlling the communications budget?
For the second year in a row at Enterprise Connect Orlando, Gartner research director Sorell Slaymaker is going to offer his advice for this critical task. In a phone conversation, Sorell told me that he’ll be providing a list of 10 suggestions, in rank order, in his session, “Strategies for Reducing the Telecom Budget.” In our conversation he shared three of them.
Move to Hybrid WAN - Enterprises that relied on MPLS networks in the past are now moving to deploy more Internet-based services in remote offices, with Ethernet private-line services at the core. Sorell pointed out that bandwidth demand isn’t slowing down, so you need to increase capacity and lower cost, which this new hybrid strategy can achieve. “Any time you have a project that can both increase performance and reduce cost, that is a golden project,” he said.
Reconsidering your WAN technology fits nicely with another of Sorell’s cost-saving strategies:
Move to SIP Trunking - As described in this earlier post, SIP trunking is still all about cost savings. And with the cost savings remaining substantial, it ranks in Sorell’s top 10 for controlling the budget.
Embrace Freemium - Rather than pushing back against freemium applications for functions like audio, Web, and video conferencing, enterprise communications leaders should embrace this major trend and offer a tiered service model, with a freemium option, he said.
Sorell noted that Freeconferencecall.com reports it is now the second-largest audio conferencing provider in the U.S. business market, with roughly 13% share. It’s one of many applications that business users might go out and procure on their own if they’re not happy with the choices from their enterprise IT shop.
So what he advises is that IT/communications staff vet freemium applications and then offer a tiered structure -- generally anywhere from 2 to 4 tiers -- from free, publicly available apps up to the in-house, enterprise-provided systems. Then make the tradeoffs clear to users, both at the individual level, where the choice may be centered around convenience, and at the departmental level, where cost savings may come into play. “IT should give the business some choices between cost and quality,” Sorell said.
As he did last year, Sorell is going to break down his suggestions into those that IT can act on quickly, say within 90 days, and those that IT can build in as part of a 1-year budget-cycle plan. The savings can be aimed directly at the bottom line, or can be incorporated into a plan to fund reinvestment; usually, it’ll be a mix of these two outcomes. “Once you save money, then you’re in a good position to determine how do you allocate that money,” Sorell said.
So if you need strategies to trim the budget -- and who doesn’t -- Sorell’s top 10 is a great place to start.
Sorell also will be presenting the session "SIP Trunking: Come for the Cost Savings, Stay for More Cost Savings," at Enterprise Connect Orlando, taking place March 16-19. Register with code NJSPEAKER to save $300 on conference passes.