Convergence: VOIP/UC Business Case · Identify business/technology liaisons within IT Identify “grassroots” help Budget time for discussions with business-units hLeaders in HR,

Convergence: VOIP/UC Business Case

Robin GareissExecutive Vice President, Sr. Founding Partner

www.nemertes.com

© Copyright 2010 Nemertes Research

About NemertesBusiness Case for VoIP & UChDrivershGetting StartedhTeam Approach

Implementation and Management CostsRecommendations

Agenda


Quantifies the business impact of emerging technologies Conducts in-depth interviews withIT professionalsAdvises businesses on critical issues such as:

Unified CommunicationsSocial ComputingData Centers & Cloud ComputingSecurityNext-generation WANs

Cost models, RFPs, Architectures, Strategies

Nemertes: Bridging the Gap Between Business & IT


Pre-Approved Business Case: Required?

Pre-Approved Business Case Required?


Why Create a Business Case?

85% of organizations are working with

decreasing or flat IT budgets.

Organizations that require a business

case are less likely to put projects on hold.


Building a Business CaseAccurate assessment of current costsh Implementation, operational, capital

Identify business & process benefits h Engage business units to understand problems your technology can solve

– We didn’t need to schedule a follow-up call to answer that question? – We didn’t have to search for that information? – We had the benefit of X’s insight when we needed it on this project?

Confer with business process owners to validate improvement & gain buy- inTest-drive a prototype to uncover problemsMeasure “before” and “after” results!Measure ROI, TCO, NPV


Sample


Team Approach

Identify business/technology liaisons within ITIdentify “grassroots” helpBudget time for discussions with business-unitshLeaders in HR, sales, finance, customer service, legal, etc.hAlso discuss with managers and staff

Don’t ask technology questions—focus on what problems with their jobs, processes, customer relationships, revenue-generation, etc.Understand business problems, and relate your technology knowledge to solve themAssemble UC teamhMulti-disciplinary team—network, telecom, application development, contact

center, security, business unitsEngage team in all UC-related decisions


Steps for Success


VOIP Business Case

Is a VOIP business model still necessary?hYes! Now seeing 12-month paybacks as crucial in many industries for any

new IT investmenthExecutives want to see hard- and soft-dollar costs/savings.hLooking for ROI, TCO, and NPV

Challenges existhDo I need to budget for network upgrades? (54% do upgrade)hWhat are the true implementation and operational costs?hDo I need third-party management tools?hHow much should I invest in training?hHow quickly should we move to unified communications?


VOIP Costs: Key Findings

Overall, capital costs are droppingh Vendors are becoming much more competitive h Large companies saving 30%-90% off list price

when dealing directly with vendor-manufacturer

Implementation/operational prices 20% higher the first 2 years when compared to TDMh As expertise grows, costs decrease

IT training (and cross-training) importanth Troubleshooting IP takes 1x-4x longer than TDM

More companies spending budget on management toolsCost details available separately


VOIP Cost/Benefit CriteriaCosts

Implementationh Time/expertise

Capitalh Switch, Handsets, Gatewaysh Network upgradesh Management toolsh Cabling

Ongoing operationalh Network/WANh Staff (internal/outsourced)h Maintenance & Licensingh Training

SavingsImplementationh Cabling costs

Capitalh Softphones v. handsetsh Centralizing voicemail/UM, serversh Hosted Offeringsh Audio bridges

Ongoing Operationalh MACsh Staff Reductions & Retention

– IT, receptionists, CC turnoverh Network, FMCh SIP trunking


Nemertes Data: Cost Components

Implementation: hPlanning, installation, troubleshooting. Internal + consulting

Capital: hCapital costs for IP switches, phones, gateways, network upgrades related to

the VOIP implementation, IP video and audio bridges, management tools, unified messaging, and traditional voicemail. For comparison here, we included only VOIP switches and phones (hard phones & soft phones).

Ongoing operational: hTime and money companies spend managing and maintaining their VOIP

systems.


Average VOIP Costs

Average Profit MarginsHardware/software: 15% - 38%Professional Services: 50-55%

*Figures for Avaya, Cisco, Nortel, ShoreTel rollouts


VOIP Management Tools Spend

Average number of employees managing VOIP range from 1 for small companies to 10 for very large companiesWhen managing in-house, they add between one and six tools just to manage VOIP!43% buy tools 3 years after deployment (20% between 1-2 years)


How Did WAN Costs Change With VOIP Project?

Average WAN savings:

23%


LAN Upgrade Costs

Includes pricing for all vendors


Closing Thoughts: Best Practices to SuccessUnderstand business problems UC can solve.Don’t rush! Spend time up front educating IT, business units, executives.h Win support internally.

Tie VOIP to the overall UC project.Tie UC to corporate green initiatives.h Enables telecommuting, conferencing

Understand vendor roadmaps & alignment with your strategyh Architecture & scalabilityh UC app supporth Virtualization plansh Partner expertise

Thank You

Robin GareissExecutive Vice President & Sr. Founding Partner

www.nemertes.com

Documents

Convergence: VOIP/UC Business Case · Identify business/technology liaisons within IT Identify “grassroots” help Budget time for discussions with business-units hLeaders in HR,