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Wanted: New RFPs and TCO Metrics

This post was written by Fred Knight, GM of No Jitter and VoiceCon. We hear much about how Unified Communications will trigger massive changes in the enterprise communications markets and how it how it will be used to redesign and recreate business processes. But for that to happen, some changes have to be made in trenches of telecom/IT organizations--specifically the tools that are used when acquiring UC and related communications products and services.

This post was written by Fred Knight, GM of No Jitter and VoiceCon.

We hear much about how Unified Communications will trigger massive changes in the enterprise communications markets and how it how it will be used to redesign and recreate business processes. But for that to happen, some changes have to be made in trenches of telecom/IT organizations--specifically the tools that are used when acquiring UC and related communications products and services.For example, consider the venerable communication system RFP. Over the past seven years or so, as IP-PBXs began to replace TDM, many enterprises--and consultants--adjusted their RFPs to reflect that fact that the underlying technology for voice communications and networks was changing.

But in many respects, that meant little more than adding the initials "IP" in front of an otherwise standard list of phones, features and other devices. In many if not most situations, that sufficed. Going forward, it won't.

Unified Communications certainly includes voice and traditional messaging; it also includes features and functions that are already included in most RFPs--capabilities like presence and IM, and encompassing both wired and wireless domains.

But UC goes beyond a list of technical features and capabilities--it is increasingly defined as providing the ability to: "....build new communications methods directly into the sequence of tasks in a business process to make that process function most effectively."

In short, UC includes traditional communications but goes beyond it, to deploy communications systems and software to improve business processes. I submit that an RFP and a procurement process aimed at accomplishing that goal is vastly different from an RFP and procurement process that's aimed at swapping out a TDM switch for an IP-PBX.

RFPs are one example where UC triggers the need for innovation (see--and contribute to--our attempt at Next-Gen system RFP Template at the VoiceCon RFP Wiki, another is the area of TCO and life-cycle metrics. The need for innovation here is driven by the fact that IP Telephony is increasingly, a software-driven architecture.

Doug Carolus, a consultant with N'Compass, has done a lot of work in the area of UC budgeting and cost planning. When I asked him about the impact on the new software-intensive systems would have on capital vs. operating budgets and on depreciation, he noted that enterprises are familiar with depreciation schedules for software.

But he went on to identify some of the key challenges he thought enterprises would face in budgeting and TCO because of the change in communication system cost architectures. He recommends that enterprise managers ask themselves the following:

1. Do you know truly understand all of the software licensing costs for the systems and applications you're buying? What they are, what they do, and what the restrictions are?

2. Do you understand the organization's future growth well enough to plan for and purchase sufficient license capacity--there can be major cost savings realized during the initial procurement versus after-market purchases.

3. Do you understand the "break points" in licensing models--where does it make sense to invest in additional licenses?

4. Do you understand how software upgrades are priced and implemented (especially for multi-site infrastructures)? Vendors have different cost models for software upgrades depending on which release the customer is running R-1, R-2, etc.

5. What vendor service/support is available for software applications? What are the warranty and post-warranty support service costs, support options (and potential issues)?

The people who run today's enterprise networks have vast experience with the entrails of vendor pricing, and service and support offerings. But many of those details are going to have to be relearned, as UC rearchitects the cost structure for enterprise communications.

What do you think? Have you rewritten your RFP/RFI for UC? Are the assumptions you use changing for TCO or life-cycle metrics as a result of UC? Send your comments to me at [email protected]