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.

What’s the Hype about VoIP?

Why the excitement about voice over Internet Protocol? Should I care? How will it affect me, my business, my costs?

These are just a few questions the man in the street is asking since February 2005 when VoIP burst onto our newspapers, TVs and radios. To many the answers are immaterial. If you don’t already have a fast, broadband Internet connection at work or at home, VoIP is currently not within your reach. But for those who have broadband, understand there may be some cost savings, quality improvements and access improvements, VoIP is already being quickly snapped up as a very preferable service to existing fixed-line telephones. Let’s look at some basics:

What is VoIP/Internet Voice?

VoIP allows you to make telephone calls using a computer network, over a data network like the Internet. VoIP converts the voice signal from your telephone into a digital signal that travels over the internet then converts it back at the other end so you can speak to anyone with a regular phone number. When placing a VoIP call using a phone with an adapter, you'll hear a dial tone and dial just as you always have. VoIP may also allow you to make a call directly from a computer using a conventional telephone or a microphone.

How Can I Place a VoIP Call?

Depending on the service, one way to place a VoIP call is to pick up your phone and dial the number, using an adaptor that connects to your existing high-speed (broadband) Internet connection. The call goes through your local telephone exchange to a VoIP provider. The phone call goes over the Internet to the person you called for the completion of the call. Another way is to utilize a microphone headset plugged into your computer. The number is placed using the keyboard and is routed through your modem.

What Kind of Equipment Do I Need?

A broadband (high speed Internet) connection is required. This can be through a modem, or high speed services such as ADSL or a local area network. You can hook up an inexpensive microphone to your computer and send your voice through a modem or connect a phone directly to a telephone adaptor.

Is there a difference between making a Local Call and a Long Distance Call?

Some VoIP providers offer their services for free, normally only for calls to other subscribers to the service. Your VoIP provider may permit you to select an area code different from the area in which you live. This means you may not incur long distance charges if you call a number in your area code regardless of geography. It also means that people who call you may incur long distance charges depending on their area code and service.

Some VoIP providers charge for a long distance call to a number outside your calling area, similar to an existing, traditional fixed-line telephone service. Other VoIP providers permit you to call anywhere at a flat rate for a fixed number of minutes.

If I have VoIP service, who can I call?

Depending upon your service, you might be limited only to other subscribers to the service, or you may be able to call any phone number, anywhere in the world. The call can be made to a local number, a mobile phone, to a long distance number, or an international number. You may even utilize the service to speak with more than one person at a time. The person you are calling does not need any special equipment, just a phone.

What Are Some Advantages of Internet Voice?

Because VoIP is digital, it may offer features and services that are not available with a traditional phone. If you have a broadband internet connection, you need not maintain and pay the additional cost for a line just to make telephone calls.

With many VoIP plans you can talk for as long as you want with any person in the world (the requirement is that the other person has an Internet connection). You can also talk with many people at the same time without any additional cost.

What Are Some disadvantages of Internet Voice?

If you're considering replacing your traditional telephone service with VoIP, there are some possible differences:

• Some VoIP services don't work during power failures
• Not all VoIP services connect directly to emergency services
• VoIP providers may or may not offer directory assistance/white page listings.

Can I use my Computer While I talk on the Phone?

Yes

Can I Take My Phone Adapter with me When I Travel?

You may be able to use your VoIP service wherever you travel as long as you have a high speed Internet connection available. In that case it would work the same as from your home or business.

Does my Computer Have to be Turned on?

Not if you are making calls with a phone and adaptor or special VoIP phone, but your broadband Internet connection needs to be active. You can also use your computer while talking on the phone.

How Do I Know If I have a VoIP phone Call?

It will ring like any other call.

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by Greg Hatfield, General Manager, VoIS Solutions, Internet Solutions [www.is.co.za]

Case Study—Logistics company controls expenditure between their fleet of trucks and operations using LCR call back

Description of business need

A national logistics company had a requirement to ensure that their fleet of 130 trucks was cost effectively communicating and making use of the most efficient technology available within their existing telecoms environment.

The company was highly dependent on telecoms for day to day business needs and was running 2 branches in Cape Town and Johannesburg.

Their telecoms costs were escalating year on year due to the following:

· An expanding business
· A dependency on telecoms as a critical business tool
· Increases in the size of the fleet
· Annual supplier increases

Managing the drivers and their costs was proving problematic and confrontational. Management required a solution that was reliable, manageable and cost effective to use for daily communications within their fleet

Situation

There were 3 incumbent suppliers; namely Telkom, a LCR supplier and a cell phone service provider. The costs of telecoms were escalating month on month and cell phone usage in the trucks was proving difficult to manage.

Whilst LCR was being used from the offices to the trucks, drivers were calling the offices from company owned handsets and costs were difficult to manage. Furthermore deducting costs from wages every month was causing friction between management and the employees, whilst being difficult to administrate.

Driving down costs, monthly reporting and financial budgeting / forecasting was problematic at best.

Solution

The customer selected DataRoom as its supplier independent advisor with a clearly defined set of objectives:

· Ensure all calls were at all times at the cheapest rate for their business need
· Ensure reliable infrastructure with seamless usage
· Take away the “pain” of managing the costs and reporting

DataRoom performed an analysis on call pattern and infrastructure. The reporting revealed that the opportunity lay with the optimisation of the existing LCR suppliers and managing the call patterns and packages of the cell phone handsets.

DataRoom recommended installing cell phone call back [to the offices] for the drivers and each drivers cell phone number was to call the LCR instead of the Telkom line. The LCR then called the driver back automatically. Furthermore, the cell phones were programmed to limited phone numbers and locked to avoid abuse issues.

The company chose a supplier with digital LCR equipment and a strong track record of good service to support their 24x7x365 requirement. Once the LCR call back was in place the next step was to optimise driver cell phone packages for their low call volumes.

Benefits

No more disgruntled drivers. All the drivers could still phone family, clients and company offices, but the onus on cost reduction was no longer their problem. No more deductions from wage bills either. As a added benefit the monthly fixed costs of subscriptions dropped dramatically.

Cell phone costs and LCR costs reduced significantly and management were confident in their ability to communicate efficiently. Management are now empowered through DataRoom’s “single view” into their telecoms costs and in a position to effectively validate and justify CAPEX and OPEX relating to all telecommunication needs.

Communications between their fleet and the operations were at the lowest possible rate and operating smoothly 24x7x365.

Case Study— Sharp Electronics reduces their Monthly telecoms by R 960 000.00 per annum

Description of business need

You do not know what you do not know. Without the correct guidance, monitoring, support, infrastructure and ongoing management, the typical organisation would almost certainly fail to achieve its strategic objectives. The same applies to the cost and infrastructure management of a customer’s telecommunications environment.

Technology in all segments of the market, does and will continue to advance at a rapid rate and as it does, so suppliers attempt to position themselves in such a way that they are most favourably aligned to on sell their solutions to their customers [often with no real business case that clearly and accurately defines the customer need].

The reality is that the majority of suppliers, however competent they may be in the marketing and selling of their products, falls short in the implementation, measurement and ongoing management of the customer’s infrastructure and telecoms expenses once the products are in place.

Sharp Electronics required a business partner who understood their unique business need, could identify the opportunities, would enable the company and its suppliers to manage costs and infrastructure efficiently and report on the objectives and results into the future on a national basis.

DataRoom provided Sharp and their suppliers with -

· An automated set of “Telecoms Report Suites” using a web based reporting engine
· The methodology, best practices and intelligent reporting required to reach their objective of optimal telecoms expenditure

DataRoom empowers its customers with the knowledge to make business decisions.

DataRoom ensures that all the roles players at both the vendor and the customer gain access to accurate reporting that ensures the objective of optimal telecoms costs and infrastructure is achieved.

Situation

In November 2005, Sharp was spending an average of R 220 000.00 per month on voice calls nationally. There were 3 incumbent suppliers of voice in the area of fixed line, Cell phones and LCR [least cost routing of cell phone calls].

Sharp was represented nationally by 14 branches with Johannesburg by far the biggest branch and a Cape Town head office.

Sharp had no single view into their call patterns nationally and apart from understanding that LCR was an option, they were unsure of the best option for their unique business need and wanted complete control of their costs, infrastructure and suppliers.

Furthermore Sharp had a requirement for a single view into their monthly telecoms environs.

Solution

Sharp chose DataRoom to deliver supplier independent telecoms reporting, the methodology and the best practices; to bring down monthly telecoms costs. More importantly the DataRoom offering was seen as a way to reduce time and resources required to deliver optimal telecoms.

Using supplier billing and call detailed records; a thorough analysis of all voice expenditure by supplier, branch and geographical region was undertaken using DataRoom’s Telecom Report Suite was performed. Once management had a thorough understanding of the current call patterns for total voice and infrastructure requirements; with DataRoom input suppliers were chosen who firstly could address their unique business requirement and secondly could deliver quality of service at the right price.

DataRoom recommended per second billing for all suppliers, low cost [free] interbranch calls, cheaper national calls, single supplier for national / GSM and inter-branch calls as a minimum requirement in choosing their supplier.

Benefits

Management at all branches and head office have a single view into their total voice expenditure every month. All regions and branches are held accountable for their own costs.

Expenditure reduced from a November 2005 high of R 223 000.00 to R 143 000.00 in June 2007. This reduction equates to an average reduction of 36% or R 80 000.00 per month less.

This equates to annual savings of 36% or R 960 000.00 per annum. Sharp now makes all their voice calls at the lowest possible rate for their specific business need and can effectively monitor these costs using the DataRoom Effective Rate report. Sharp has also integrated DataRoom's monthly reporting into their monthly business processes and sustained the savings to date [updated June 2008].

Peak and Off Peak rates for local / national / cell phone / national and interbranch calls are all down significantly in June 2007.

Sharp can now expect to reduce monthly costs further through the efficient configuration of infrastructure with service providers in conjunction with the “DataRoom Best Practices for optimal expenditure” guideline.

Case Study— Nashua Mobile tender to customer for VOIP services

Description of business need

You do not know what you do not know. Many VOIP service providers do not have an accurate picture of their customers [or potential customers] monthly call patterns.

For a service provider of VOIP services to put together a proposal on VOIP, the service provider must understand the customers business need 100%. This includes all TYPE’s of expenditure [Telkom/cell phones/inter branch] per branch, including

· Cost implications of inter branch calls
· Validating the business need for VOIP
· Monthly call patterns in Talktime, Billed Minutes and Rands.
· Number of concurrent calls per branch
· Effective Rates for Peak and Off Peak times

DataRoom provided Nashua Mobile and their customer with -

· A complete set of reports highlighting the precise business need across the group of companies and all its branches. The DataRoom “Telecoms Report Suite” was used.
· An accurate analysis of call pattern information that allowed
· the configuration of infrastructure per branch
· An understanding of call patterns per branch
· A detailed proposal to their customer for a nationwide VOIP solution over multiple companies and branches, over a large geographical area

Situation

In May 2007, Nashua Mobile approached DataRoom for assistance in tendering for a VOIP solution to an existing LCR client. The service provider was the incumbent supplier of LCR [least cost routing of cell phone calls] and cell phones.

Other service providers were offering their customer VOIP and Nashua Mobile wished to differentiate them against their competition, understand the business need accurately and ensure that they retained the customer. They ran a very real risk of losing their customer and the LCR revenue to a competitor if they did not address the VOIP requirement.

The service provider and their sales team did not have the capacity to perform the required call analysis and understood the importance of coming to grips with the customers business need. Furthermore, they did not have the skill set / tools to professionally analyse and understand the existing environment.

Solution

Using supplier billing and call detailed records, a thorough analysis of all call patterns by company, branch, region and all TYPE’s of expenditure was completed using DataRoom’s Telecom Report Suite.

Benefits

On completion of the analysis performed by DataRoom, the Nashua Mobile sales teams had a thorough understanding of the current call patterns for total voice and infrastructure requirements. The tender was put together based on the understanding of their customers business need.

There was no guess work involved in understanding the infrastructure requirements.

The sales team and the product manager understood exactly how many concurrent calls needed to be catered for each company, branch and TYPE of spend based on historical call patterns over the last 3 months.

Furthermore, by re-rating each call made over the last 3 months on the new VOIP rate, the service provider could accurately predict the RAND savings going forward and the resultant return on investment for his client.

Through the skills/tool set provided by the DataRoom reporting, this service provider was able to be viewed by the customer as specialist in voice communication [including VOIP] and no longer just a LCR / PBX supplier.

The customer knows uses Nashua Mobile for all their voice requirements and are expanding the initiative to other companies in the group.