Why does your company need a reliable “supplier” independent 3rd party to partner with on telecoms expense management?

Ten years ago almost to the day, in November 1999, I sat with a guy called Franco Bossi in Cape Town and spoke to him about a dream I had of starting a company. I asked him if he would be prepared to put money into the idea. Apart from the fact that a mutual friend told Franco he could trust me and that I certainly had the drive, I also did a pretty good sales job on him, because here we are 10 years down the line, with a thriving business, albeit a business that morphed into one you would not recognise from that first year.

Today I was reading an article in Time Magazine on Malcolm Gladwell, the author of "The Tipping Point", "Blink" and now "Outliers". The article reminded me of the inspiration The Tipping Point gave me during some of the darkest hours of the last decade, whilst my partners and I were building DataRoom into the company it is today. We could not sell our solution to anyone. Businesses in South Africa did not understand what it was we did, and we were still learning to articulate what we did and translate it into tangible actions and benefits for our clients.

Malcolm Gladwell’s latest book is based on the belief that success has less to do with IQ and more to do with where you come from, how you interact with the people you meet and the time you put into your field of expertise. You cannot do it on your own and you cannot do it overnight, says Gladwell. It takes 10,000 hours or 10 years, no matter how smart you are.

I believe him. Our business is living proof of that. For 10 years we all put our hearts and souls into DataRoom. Along the way we lost some bodies and picked up new ones. We would not and could not have made it without the people at DataRoom, who all have their own particular skill set and value to add. And here we are, all a lot wiser from the journey, the lessons and the mistakes.

So what’s my point? I am often asked how we came up with the DataRoom idea, and why it is different to the other solutions, offerings and consultants available today. Why should we use you? What differentiates DataRoom from the other consultants out there?

Well as Gladwell says in “Outliers”, the fact is that it takes 10,000 hours, and we have put in those 10,000 hours. We have come out the other side with a knowledge and a thorough understanding of what our clients need. I would go as far as to say I believe our offering is unparalleled in its commercial form in South Africa today.

DataRoom’s vision is to understand voice and voice infrastructure better than anyone else and our strategy has been to commercialise the application of that hard-won knowledge into a solution your company can use to manage telecoms quickly and efficiently.

So what is the problem in business today?

The cost of communicating accounts for a substantial part of the operating expenses in any business. Since communicating is essential, those costs are unavoidable. But they are not unchangeable.

Most companies are spending way too much on their phone calls, infrastructure, internet usage and faxes. Few can boast of cutting back those costs by making smart use of best practices in telecoms optimisation. That is not surprising, because their core business is not managing telecoms suppliers or calling patterns.

Without intelligent automated telecoms expense-management technologies, you probably sit with problems such as these:

• Managing multiple suppliers including Telkom, the cell phone companies and their service providers. You pay them every month, but do you check each invoice? Are you aware that billing errors occur in 7 to 12% of all invoices? [Aberdeen 2007] Do you know what you are paying for? Do you notice the hidden costs? What about price increases? How do you keep track of all your bills from so many different suppliers? Do your suppliers have best-of-breed products and services?
• Employee misuse – are you aware of how much your company spends on personal calls versus business calls? Do you know cost-effective ways to save money on all telecoms usage in your business?
• High employee and resource costs – you may be spending too much on administration and management of telecoms that could easily be eliminated.
• Lack of cost-saving solutions and no advice from your suppliers - the fox in the hen house approach when suppliers offer advice and promote their own services is dangerous.
• Mismanaged infrastructure – you may be paying for services you don’t even use or require. How do you decide on infrastructure if you do not know what your business needs are?
• Negotiating with service providers when the suppliers know more than you, can be problematic and costly.

How does DataRoom provide solutions?

• We provide a supplier independent “intelligent single view” into all your company’s telecoms costs
• Using your own supplier billing and call records, we analyse both fixed and variable expenditure, call patterns and voice infrastructure.
• We use what we find to develop a documented strategy and project plan with a measurable scorecard to drive down both direct and indirect costs.
• We provide ongoing piece of mind for the management of calls, infrastructure and suppliers
• For a single monthly fee, dependent on how many lines you have, we provide the skills, knowledge, business intelligence, automated reporting, best practices and project management

Where do the savings come from?

The savings and simplicity come by having a single view into your telecoms; to manage your costs and your suppliers and to strengthen your decision-making processes.

Most of our customers already have cost initiatives in place by the time we get involved. Least Cost Routing (LCR) of cell phones calls, term and volume agreements and supplier discounts are good examples of this. However, without the knowledge, the single view business intelligence, best practices and tried and tested technologies, the next tier of savings is almost impossible to reach.

DataRoom’s customers typically reduce their direct costs by an additional 15 – 30% over and above the normal initiatives mentioned above.
Why choose Data Room?

• Apart from a 10 year track record in our field, we are experts in voice and voice infrastructure
• Our customers and our success stories speak volumes for our ability
• DataRoom are a “Best of Breed” solution offering
• DataRoom have the business intelligence, supplier independence, automated reporting, training and documented “telecoms best practices”; required to deliver optimal voice and voice infrastructure
• We do this cheaper and faster than you or your suppliers can do it
• DataRoom will embed the knowledge you require to manage telecoms efficiently into your company; whilst giving you the continuity and knowledge retention you require to make informed and ongoing decisions into the future
• All information is sourced directly from your networks and service providers.
• No ongoing lengthy photocopying exercises or installation costs
• SUPPLIER INDEPENDENCE

And if you are still undecided we will help you -

• Understand your business better than your suppliers. You cannot make decisions or negotiate on supplier proposals if they know more about your business needs than you do
• Understand technologies that are changing rapidly – it is DataRoom’s job to stay ahead of the game and cut through the confusion to know which are best for your business
• Retain knowledge in your business and provide continuity in managing telecoms
• Ensure
o a guaranteed lowest call rates for your business needs
o all the role players know what to do and where to start. This includes suppliers, management and employees
• Forecast and control all telecom budgets for your business
• Identify opportunities and shortfalls quickly and efficiently
• Deliver immediate savings on your current telecoms expenditure.

So here's to the next 10 years. I still have not lost my passion for this journey and am excited by the prospect of where we can be in 10 years from now.

Peter Walsh
JHB
30th November 2008

Cell Mobility

Cell phones have changed the way that businesses do business since they first arrived in South Africa about 15 years ago.

The mobility factor has been embraced by some companies to a far greater degree than just being able to answer calls at anywhere and anytime. Other compelling features include vehicle tracking, systems monitoring on production lines, SMS confirmation alerts for internet banking transactions, the ability to integrate your office PC to a cell phone to access company data; and handheld delivery note processing via GPRS. Those services and the even greater range of applications in devices like the Blackberry have changed the way we do business forever.

Executives and managers quickly recognised the benefit of their employees and management teams being able to make and receive calls on the move. Providing 24 x 7 x 365 support to customers and increasing the efficiency of business processes is highly attractive to management.

Despite the obvious benefits that cell phones bring to businesses, the cost implications are significant --and it can be quite difficult to place a value on the return on investment that mobility offers. In my experience, the cost of cell phone use in South Africa and the inability to manage these costs effectively is having a negative impact on the adoption of mobility as a “must have.”

Take a look at how service providers earn their revenue from the GSM networks and how this affects their ability to deliver quality service to you, the customer.

Service providers are paid a margin [roughly 26%] to sell you a network’s services. Out of this margin the service provider must put in place the sales staff and all the operational and financial resources needed to manage their business.

In a bid to reduce their costs, corporate clients buy cell phones from their service provider and demand discount structures, instead of demanding high levels of service and the tools to help them manage their costs.

To make matters worse many companies use multiple service providers on a national basis, so neither the customer nor the SPs have a single view of the company’s total cell phone spend, and no way for one SP to manage all the costs.

Then the company requests a discount in return for their substantial monthly business, and the SP can end up with less than a 10% margin from some clients. Yet the corporation will still expect a top dollar service for bottom dollar payment.

Sales teams are rewarded for new sales they bring in, and therefore the attention they pay to retaining a client is often negligible or non-existent.

Into that mix you can add the constant drive to maximise profits for shareholders, the lack of skills in the marketplace and the general cost of doing business. By now you start to understanding why there is no incentive to inform customers on how best to manage their cell phone costs [ie. spend less money] and more importantly, probably no understanding on where to start.

Companies that adopt cell phones as a crucial business tool can chose one of many paths, or a combination. They can:

· Expect the employee to carry the burden alone
· Share the burden with the employee
· Use GSM Fixed Cellular call back from cell phones to stay in contact with the office
· Limited the use of company-owned phones to the top tier employees
· Put in place credit limits
· Roll out mobility across the board and carry all the costs

Without the necessary skills or insight to assess and manage these options themselves, the business is bound to get frustrated or have limited success in the balancing act between costs and benefits.

However, one of the more serious mistakes made by companies facing increasing cell phone costs is to hand the task of managing the cost over to the employee. The employee is given a credit limit and any additional costs are deducted from their wage. Even worse, many companies have transferred cell phones into the name of the employee, generating many unwanted consequences.

The risks here include losing the cell phone number when the employee leaves, so customers now phone the opposition; not being able to claim the VAT expense anymore, having to ask employees to spend company time getting reimbursed for company costs each month; friction if the employee feels it is costing him to work for you; and resentment from employees who have to let you integrate their private phone into your business processes

So what options does a business in SA have to manage these costs and reap the much-wanted benefits of 24x7x365 connectivity for employees?

These are some of the options available to your business:

• Ignore the benefits, and limit company cell phones to upper management
• Reimburse employees for calls made from their private cell phones
• Pass the costs onto the employees and insist that they have their own phones as part of the job description
• Go the split billing route, where you pay the subscription and the employee pays the call fees
• Employ someone to manage the costs for you or hand it over to an existing employee
• Ensure that you get cost management [read optimisation of cell phone packages and 3G cards] written into your SLA with your existing service providers
• Make use of the various management tools available from service providers
• Outsource the whole management headache to a company like DataRoom

As with every business decision there are pros and cons behind each option. In my experience, businesses are already under enough pressure and managing cell phones requires more than just people. It requires systems, software, knowledge, and good relationships with all the service providers to access their data and intelligent reporting engines.

You need to establish which solution best suits your specific business needs. And most importantly, you should be calling in an expert to advise you on your options.

To understand the opportunity for improving your business efficiencies and be able to weigh that against the costs, you need to be able to measure the consumption ….

And that is where DataRoom’s expertise comes in.

Peter Walsh

Thursday, October 23, 2008
www.dataroom.co.za

Choosing your Telecoms Consultant or Telecoms Cost Management company

When choosing the right telecoms consultant or Telecoms Cost Management compnay, here are some questions to ask:

• Does the company or individual have a proven track record?
• Are they supplier independent?
• Do they have a fixed monthly cost, published pricelist or do they take a percentage of your savings or do they charge per hour?
• Is there access to secure website online reporting available?
• Will the solution on offer cover all your telecoms costs? Namely Fixed line, GSM handsets, GSM fixed Cellular, VOIP and wireless solutions
• Do they manage both fixed and wireless costs?
• Do they install equipment on site or are they able to perform off site / virtual data analysis?
• Is the solution ongoing and sustainable?
• Is the information you receive 100% accurate? Based on supplier billing.
• Is the solution using manual systems or fully automated?
• Are site visits, project management and consulting included in the price or does the supplier charge extra for this?
• Is a well documented return on investment [ROI] included with your proposal prior to any contract being signed?
• Are they able to benchmark all your products and services?
• does the solution include any "Best Practices, telecom polices, methodology and benchmarking?

Neil Buckley - Apex Business Intelligence - neilb@apexbi.co.za

082 805 5555

Focus on the pain not the price

Last year I was sitting in Cape Town airport waiting for an aircraft that was late to land [due to rotational reasons - I believe that’s a euphemism for sorry we are late again] and take me home. My mind was mulling over a question I had been asking myself again and again.

Why do we struggle to get our message across to our clients?

Some background at this stage; the company I work for manages telecoms costs for businesses that spend anything from R100 000 to R12 million per month. In essence we measure, manage, optimise and report on telecoms infrastructure and its associated costs. Our offering typically costs a company less than 3% of what it spends every month on phone calls and for the most part, we reduce these monthly costs by an additional 15 to 25%. I am the sales guy responsible for bringing in the budget every year.

So there I am wondering what I can do differently. What can I tell my clients that would speed up my sales cycle? Why are they not hearing me? Surely it’s not that difficult?

Let’s go back to the facts, I think aloud. We offer a good service at the right price! We have a good track record. Oh, except for that one incident [sigh] where we spent a small fortune fixing a mistake we made and got the boot anyway.

Businesses have a very definite need for telecoms cost management right now. Telecoms costs in South Africa have been exorbitant for years. And the government has no interest in doing anything about it. Too many vested interests are at play for politicians to care what happens to businesses and the people they employ because of prohibitive telecoms costs. Lack of leadership is the latest excuse being offered to explain the debacle.

Telecoms costs are so far down our list of social problems that we can’t expect any good news in the short term. Those cell phones you cannot do without will carry on costing you money, but your employees need them. Telkom will continue to put its prices up, and if Telkom is sold to new owners who have to pay back their funders it is not going to get any better.

So where was I? Oh yes. What can I do differently? In a perfect world, one would rather spend less time selling and more time delivering services. My logic is that the quicker I deliver, the more we invoice and the less time I would need to spend in this airport. More time in the bush, a better social life and financial security, surely this is the way to go?

I have been managing telecoms costs more efficiently for various companies for nine years. And I consider myself very good at what I do. Many of these companies are still our customers. Our business is successful, our clients are happy and we have built up a steady reputation as the guys who deliver the goods. So clearly it’s not what we do, it’s how we explain it to potential new clients that is the problem.

Our company DataRoom has spent the last nine years perfecting its value proposition and the delivery of solutions to clients. We have many success stories to talk about. We have a slick presentation. We have the testimonials. We even really understand the business needs. We do our job better and cheaper than most companies out there. Yet sometimes it still takes months for new clients to make up their minds. That’s frustrating.

So why is it hard to sell managed telecoms services to businesses?

Our customers have been listening to their service providers telling them for years that their solutions and products are going to save them money. All they need to do is give them the business and they will look after your telecoms. This endless sales pitch has clouded the real problem, and customers have bought into it. Never mind that telecoms in SA are so complicated and so mired down in inter-connect rates that the chances of making a cheap call are about as strong as unemployment halving by 2015.

There is no political will to do anything about the high interconnect rates charged between networks, since they were designed to protect the incumbent fixed line operator that the government happens to have a share in. And interconnect rates and bandwidth costs are responsible for the high cost of calls in South Africa. How do you rent network capacity from the only provider and then compete with it? The government has created a very expensive telecoms environment and low telecoms costs in South Africa are not going to happen for quite some time.

Since we have some of the highest telecoms costs in the world, businesses need to learn how to manage those costs. So surely they need the help of experts?

But there’s a catch. Commission-based sales incentives for sales people, network incentives offered to service providers for every new connection, and the fact that a service provider only manages call made over one network, not on rival networks, leaves a lot of room for improvement in the management of telecoms.

Every telecoms sales person in South Africa is promising to deliver cost savings. Yet customers are sick of hearing about how much money they are going to save - they would far rather hear about how we can take away their pain and deliver the goods.

Negotiating some discounts is not a euphemism for managing telecoms. To do the job properly you have to get to understand a company’s requirements, and invest time and money in managing and monitoring those requirements into the future or the costs rise.

This is a difficult and time-consuming process. So if you do not have the toolset, the business intelligence and the knowledge, then negotiating discounts are just about all a procurement guy, IT manager or CEO can do. Never mind what that sales guy with the Porsche selling Premicell and VOIP solutions tells you. How do you think he got to afford the car?

You see it is not all our fault. Our customers play a role. They let the equivalent of the "local building supply store" design their dream house and supply the building materials. They get a house all right, just not the one they wanted. If you want a dream home you go to an architect. And if you don’t like what he or she shows you, you go the next architect until you do like it. But you need to recognise that you do not like it. Or that you could do better. But without an architect you are unlikely to find out.

So why, when it comes to understanding one of the world’s most complicated telecoms environments, and when they need a world-class telecoms infrastructure, do our customers go the “local building supply store” for their designs? And more importantly how can I get them to see that they need an expert to manage their requirements?

Why do companies in South Africa rely on their service providers to tell them what to do? Having the fox watching the henhouse has never worked well for Farmer Brown and it will not work for your business.

Needless to say I did not get the answer that afternoon in Cape Town. But the answer has crystallised over a period of time through lots of debate and discussion. We had a sales conference in Johannesburg in September, where we threw out the agenda and decided to reinvent ourselves. We decided we had to present ourselves for what we were. After all, we are a business that understands telecoms better than any of our competitors. Even better than our customers understand their own business needs. We decided to show our customers we had a plan.

So what should our customers really be looking for when it comes to making telecoms decisions? How do you manage those cell phone costs? How do you ensure your mobile employees have connectivity on the road without killing your cash flow? Which PBX and which service provider will do your communications platform proud?

Customers want to know that their supplier has the knowledge and strategy to know what they are talking about and they want to see a plan. Customers want a partner that understands telecoms better than anyone else. They want a partner that invests in getting to understand their business and their business needs better than anyone else. A company that puts together a documented plan and sticks to it until circumstances change.

That supplier needs an independent insight into how to do things better and a sustainable solution that delivers real management benefits cost effectively.

To manage your communication costs properly, you need more than a discount from your service provider. You need not sign long-term deals with a fixed line operator and cell phone provider to gain what you rightly deserve. But you do need an expert to help you understand what to do, where to start and how to implement the changes.

And your expert must manage everything; fixed line, least cost routing, cell phones, 3G cards, VOIP and infrastructure. So here is my advice to the businessman or businesswoman who wants to know where to start or just needs to know they are on the right track. If you are looking to manage your monthly telecoms costs, make sure the people you hire are experts who have a plan for where to start and what to start with, and most importantly make sure they are 100% supplier independent.

Peter Walsh
www.dataroom.co.za
Saturday, June 07, 2008

DataRoom / Consultants and TMS - clarity on the differences

I get so many requests for more information on what DataRoom does that is different to other companies. So I thought I would provide a precis thereof.

There are many consultants out there who do parts of what we do, but none do exactly what we do or to the same extent. DataRoom’s biggest advantage over these types of companies is that -

1. DataRoom do all fixed and variable costs
2. DataRoom have a really strong web based reporting engine and they do not
3. DataRoom are SUPPLIER INDEPENDENT
4. DataRoom manage
- product
- call patterns
- infrastructure optimisation and tracking
- all TYPES of expenditure
5. DataRoom provide the best practices, methodology, resources and reporting
6. DataRoom performs for a fixed price with no sharing in the savings – typically our costs are between 1 and 2 % of what the customer is spending every month as a benchmark across our customer base
7. DataRoom ensure that there is a significant reduction in time and resources required to manage telecoms, whereas consultants sell time
7. PRICE, PRICE, PRICE, PRICE – for what we do we have to be the cheapest in the market place
8. DataRoom are a South African brand, we own our IP and we have developed our offering around the unique requirements of convergence and the SA market place

Furthermore consultants sell hours whereas DataRoom sells knowledge, best practices and reporting for a fixed price per line. Meaning every time you need more knowledge or benchmarking or reporting you have to repeat the entire exercise with the consultants before you can make a decision on anything.

One of our clients recently indicated that DataRoom costs for the entire year were cheaper than the costs they incurred for a few months with a consultant performing the same scope of a voice project – namely reporting / optimisation and consulting.

Some examples of consulting houses in SA are -

1. Nebula
2. Torch

Then there are also many players out there in the TMS [telephone management system] field. However TMS measures extension usage and does not provide best practices / methodology / reporting and product knowledge. More than 80 % of all DataRoom’s customers use both a TMS and DataRoom’s product offering.

The major players in TMS in SA are –

1. Telesa
2. Aspivia
3. Teletracer
4. Multimatics

Lastly there are so called savings analysis reports many suppliers use to market and sell there own product. These reports are focused on their own products and ARE NOT SUPPLIER INDEPENDENT.

So the information they provide does not reflect what is available in the entire market place, only on what they are selling into your customers. The fox running the hen house with this approach is NOT A BEST BUSINESS PRACTICE but typically does not cover all TYPE’s of voice in a business. Also in most if not all cases the reporting and IP is nowhere near what is on offer from DataRoom.

Examples of this type of organisation would be –

1. Huge Telecoms / Telepassport – using TMS solution from Multimatics / extension reporting based
2. VodaManage / Vodacom VSP – using their own web based software and reporting on their traffic only
3. Autopage – using their own web based software and reporting on their traffic only
4. MTN – using their own web based software and reporting on their traffic only
5. Orion - using their own software and managing only traffic that affects them

Hope this provides clarity for those of you out there that are asking me the same question. Any questions to peter.walsh@dataroom.co.za.