Packet Fusion / ShoreTel / MPLS / SIP
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A Debate About Outsourcing

By
Joe Bjorklund

I recently had a passionate conversation with a potential customer that I still find very interesting.  I had been given his name by a customer of mine when I asked for a few referrals.  As you know a happy customer that refers you to another company is solid gold.  When you have a unique offering such as our vManager platform, that introduction is even better.

The conversation started off well there was a lot of chatter about the telecom business etc.  He was anxious to look at options to lower his telecom spend.  I assured him that we would be able to offer significant savings and things were really starting to gel.  I got to the part of the conversation where I explained that we are a telecom management provider and we offer a solution to our customers that not only lowers their hard costs but has a dramatic effect on their soft costs.  That is where I lost him.  He replied back to me that he was not interested in handing over the management of his telecom to us.  The implication, of course, was that he could do it better than we could.

Now, I have been in sales for many years and don’t need to be reminded that the last thing you want to do is get into a conflict with a prospective customer.  Here was the problem:  He was wrong!  I am sure that he is great at what he does and his IT staff of 2 seasoned telecom veterans works very hard to keep things in tip top shape.  That being said, he was still wrong.

Realizing that the potential for a sale was rapidly fading; I made a decision that one day he will thank me for.  I decided to stand my ground at any cost and show him that he was wrong.  You can’t pay your bills with moral victories but it had been a long day and I was determined to passionately vocalize my point. 

He began telling me about the voice mail box that all of his branches leave messages regarding problems with lines and circuits.  He told me how the mailbox pages him to let him know there is trouble.  He explained that he has every piece of information regarding his circuits in a spreadsheet so he can manage the carriers.  Smelling a little blood in the water, I asked him to bear with me as we did a test.  I asked him to think about how he is currently managing his carriers as I explain what my customers do.  I gave him 5 questions to find the answers to while I did the same in the software that my customers use.  I asked him to find the following information on one of his remote offices.

                What is the Circuit ID (from the LEC) of the PRI installed at that facility?

                What are all of the DID numbers assigned to that circuit?

                When does the contract expire on that circuit?

                Get a copy of the paperwork that was signed to have that circuit installed?

                What cost center is that circuit assigned to?

I was able to complete all of the items above in the time that it took him to write them down.  I could have gone on a lot longer with many more examples but I knew I was pushing it a bit. At this point, one of two things could have happened.  I was either going to hear dial tone in my ear or he was going to admit that there is a better way to manage the carriers.  He didn’t hang up on me but he also didn’t tell me that I was right.  He did say, however, that there may be some value to the accounting department and he would forward my information.  Change is very difficult for many and the way our customers manage their telecom IS different.  It is not only different, it is better.  My prospect realized that after our test but was not going to admit it.  I expect to be talking with him again soon.

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In Search of a Better Wireless Experience

By
Joe Bjorklund

For those that follow this blog, you know that it is all about total telecom management with the net goal being a lower total telecom spend.

In recent months, the most common question asked here has been: where is the best place to buy my wireless services?  The honest answer: I have no idea.

Here is what I do know, along with a plan to find the actual answer to the question.  In business (wired) telecom, the days of working directly with the carriers are rapidly coming to an end.  This distribution method is archaic and will soon go away completely.  Here is analogy that I often use.  In the old days, you would go directly to the farmer to buy your eggs.  That was a time consuming task with varying results.  Today you get higher quality eggs, a much better egg selection, lower egg prices and better overall shopping experience based on the distribution model that the grocery store has created

That distribution model is why our customers love us.  The success of our company is based on a few simple business concepts:

  • Our customer service is far superior to the carriers (now granted, that is not  hard to do)
  • Our aggregated purchasing power gives us pricing far better than a customer can get from the carrier directly
  • We have over 30 carriers that we manage which gives our customers every option that they would ever need
  • You have better things to do than managing the carriers (plus, we are better at it)
  • Your business matters to us.

It stands to reason that the wireless customer would benefit from this same distribution model. A wireless provider that can offer the same value proposition to their customers would be a gift to everyone from the IT Manager all the way to the individual user.

To find the answer to the question above, I have been conducting an informal survey of my customers, peers and friends to find the wireless provider (not the carrier directly) that offers the same value to its customers that we do to ours.  I am not quite ready to let the cat out of the bag, but a few names keep coming up with one of them far outpacing the others.  I am waiting to hear back from a few more IT managers that I work with before I post the results.

Stay tuned

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Blind Telecom Management

By
Joe Bjorklund

This certainly seems like an appropriate post to re-publish in this blog. I will go into greater detail in my next post but here is the short version. I met with a company today that has 6 offices in remote locations. They are having a tough time in this economy and asked me to look over their telephone bills to see what I could do to help. They were quite happy when I told them that I could reduce their monthly bill by $2,200.00 a month. That is over $25,000.00 a year! Needless to say, they were out of their minds with excitement to drop the $25K and also get rid of the horrifying customer service provided by a Northwest (name to follow in a future post…….)CLEC. You can only imagine the mood when they found out that their provider had “Evergreen Claused” them into a……..anyone…….anyone…….YEP, 3 year contract at the same rate. No savings, just an ongoing $25K overpayment for the next 3 years not to mention the fact that they have to deal with the carrier directly.

Let me compare that  to how my customers deal with their contracts.  Every one of my customers has the ability to log into the Telecom Management tool that we provide and see not only the term length of the contract but the date it was signed and a PDF copy of the original document.  We call that VISIBILITY.  Each piece of invnetory (T1, PRI, MPLS, DSL, etc.) is tagged with the contract information as well as cost centers and General Ledger coding not to mention the underlying carriner information, the circuit ID numbers, signalling, coding…. you get the point.

It really comes down to one very simple question.  Why in the world would a business choose to deal directly with the carrier when there is such a better way to do it?

Joe Bjorklund – Director of Business Development – vCom Solutions.  Contact Joe at: joeb@vcomsolutions.com

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Cherry Picking for ON NET Savings

By
Joe Bjorklund

Are you ON NET?  It is a simple question that could save you a lot of money on your voice and data expenses. As the telecom industry has evolved over the years, the choice of networks available to the consumer is enormous.  Most customers can go to their current carrier and get services for any of their locations across the country.  The problem with that scenario is that each market is different  for each carrier.  Every carrier has their core network that they own and provide services from.  If your building is within this footprint, they can offer you very aggressive pricing.  If you are not on their network, they can still get you the services but the pricing is not nearly as good.  For example, you could find that one of your locations is ON NET for Verizon and your T1 is below $300.00 but at another location you are OFF NET and the price jumps to $450.00 or higher.  That OFF NET location for Verizon may be ON NET for AT&T or Qwest

If a customer has a blind faith relationship with their carrier, they are likely paying far too much for their services in those areas that are OFF NET.  If the goal is Telecom Expense Management then the single carrier model does not work.  The customer that is making TEM a priority needs to look at each location as an individual entity and find the best of breed (cost or technology) for that location.  This “cherry picking” strategy can offer total telecom savings well in excess of 20% annually.  SALES PITCH ALERT!!! - My customers get this best of breed offering across the nation and we add the additional benefit on bringing it to them on a single monthly bill and web portal.  We act like a mini “RFP” for every city.  Sorry, I couldn’t help myself.  At least I warned you.

Joe Bjorklund – Director of Business Development – vCom Solutions.  Contact Joe at: joeb@vcomsolutions.com

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Get Rid of “Misc. Telecom”

By
Joe Bjorklund

I was having a conversation with a prospective customer the other day.  As we discussed her total telecom costs, she gave me an overview of how they tracked charges.  During this part of our conversation, she casually mentioned the “miscellaneous telecom” entry in her financial reports.  Knowing the answer in advance, I asked her what charges made up that total.  She was not able to tell me what that number represented other than it was a “catch all” for the charges that did not get applied to a particular office.  The “misc. telecom” total was about 30% of her entire telecom spend.  Needless to say, this makes it virtually impossible to manage these costs.

If you have read any of the other posts within this blog, you already know that I am a very large proponent of total telecom management and the visibility that it provides to manage telecom expenses.  With that in mind, I proudly state that my customers do not have a “miscellaneous telecom”  entry in their financial reporting.  With our TMaaS platform that my customers use to manage their telecom spend, every inventory item from their MPLS network all the way down to each calling card, gets a cost center and G/L code assigned to it.  These codes stay with the inventory items and only need to be entered once.  If a new item is added and the customer forgets to assign the G/L coding, the software will produce an error code when the customer uploads their bill into their A/P system.   Once the coding is added the customer can click one button and upload their entire bill to their A/P system with every item is in its appropriate place.  Net result: NO “Miscellaneous Telecom” Charges

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The Telecom Management Test Drive

By
Joe Bjorklund

In the business world you rarely see a no-brainer decision.  In the world of telecom, a no-brainer decision is like a Cubs World Series victory.  I believe that I can show you a true no-brainer.

Let me set the stage.  You run the IT department for a company with 150 locations across the country.  Once a month (they never seem to skip one) the mailman shows up with a canvas bag full of telecom bills from the likes of AT&T, Qwest, Verizon and the other usual suspects.  Now the fun begins.  These 150 bills get dropped on someone’s desk and they start the process of getting them into accounting to be paid….hopefully on time.  In today’s economy, paying too much for network services is one thing, but paying late fees due to poor internal processes is ridiculous.  Agreed?  The bills start their life in little piles broken down by the region that they represent.  The next step is to get them coded to the proper departments and cost centers.  I don’t need to elaborate on this painful ordeal.  You know how bad it can be.

As you may have expected, I have a better way.  I didn’t think it up or have anything to do with its design or development.  I just happen to believe in it.  So, here’s the pitch:  We sell network services and offer a TEM (Telecom Expense Management) solution to our customers.  Let’s say that of your 150 locations, you have an MPLS network, a bunch of PRI circuits and several internet T1’s.  Although you can lower your monthly costs of these circuits and get some amazing visibility into that top 5 operating expense, we will leave those alone for this conversation.  Let’s get back to the 150 bills from “The Phone Company” for your analog lines.  What if you could do this?

  • Consolidate all of those locations to a single monthly bill
  • Have the ability to break out any single location and retrieve their bill
  • Have a web portal to manage the master bill and the bills that make it up
  • Have each bill come PRE CODED for department and G/L allocation
  • Have a global inventory of every (yes EVERY) line in your company
  • Download that inventory to Excel for use in your company
  • Eliminate the “misc telecom” charges on your financials
  • Know every contract term, contract date and provider of the lines
  • See every minute of long distance or look at the global reports
  • See every trouble ticket, open order, disconnect and billing inquiry
  • No new installation or cutover.  A completely transparent billing change

Trust me when I say, I could go on, but I felt that the point had been made.  Now I assume that you are asking yourself, “how is this a no-brainer” decision?  All of that sounds amazing but it also sounds expensive.  The simple truth is that you can have all of this and more by moving your AT&T, Verizon, Qwest, Bell South, Ameritech lines to vCom Solutions for the grand total of NOT ONE PENNY MORE THAN YOU PAY NOW. 

I like to think of it as the “ultimate telecom management test drive”.  Convert your lines, use the tool, see how you like it and there is zero risk and no charge.  No Brainer?

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Filling the Hole in TEM

By
Joe Bjorklund

There is no arguing the value of a well thought out TEM deployment.  The increased visibility and reporting alone make TEM a valuable business tool. To the company that is trying to lower their telecom spend and manage the overall financial impact of this top 5 operating expense, TEM is perfect.  Sounds great right?  Well here is the rub.  Unfortunately there is a big hole in the traditional TEM concept.  Sure the financial reports are great, the A/P posting adds huge value, and the inventory modules offer wonderful clarity.  It sounds great, but what about your business?  TEM is helping you manage your costs but what about running your business.  What is the traditional TEM provider doing to bring you up to speed on new technology and competitive products?  Do you have the proper bandwidth at all of your locations?  Should you be using SIP trunking over your MPLS network?  Is the current portfolio of carriers the best for your business?  TEM can not help here. 

The hole in TEM has created a new offering that not only offers all of the TEM cost management and visibility but it also brings a high level of consulting and product knowledge to the table.  Total Telecom Management (sometimes called Telecom Management SaaS) is filling the TEM holes.  A TMaaS deployment is the best of all worlds.  I won’t bore you with the TEM part of it; that is the obvious value.  The hidden value is the ability to work with your TMaaS provider to bring “best of breed” products to the table for you to review.  By the way, “best of breed” has different definitions to different companies.  Some would say it is a Tier 1 carrier and some would say it’s the lowest priced provider available.  To each his own, right?

Let’s look at an example.  Let’s assume that you have a TEM platform in place.  You can see that the 10Mbps AT&T data connection you have in Baltimore is costing you $2,500.00 a month and the contract is up in 60 days.  Good information to be sure.  What it won’t tell you is that there are 2 Tier 1 providers that can get you that same circuit for $1,600.00 a month or bump you to 20Mbps for the same price you are paying now because they have fiber into the building and AT&T does not.  Your AT&T rep (not to pick on AT&T) is not going to share that information.  They are going to renew you at $2,200.00 a month and you will see that in your TEM report for the next 3 years.  Without a TMaaS deployment in place, the burden is on you to research the marketplace, meet with the carriers, determine your “best of breed”, manage the deployment, and integrate the new carrier into your TEM platform.  By the way, that is just one of your 78 sites across the country and the same is true with each site.

TEM is great but there is a big hole in it and TMaaS is filling it.

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Show me the Money

By
Joe Bjorklund

There are a lot of buzz words that live in the Telecom Expense Management world.  Many of them are very self explanatory like savings or cost reduction.  We are all smart enough to understand that if our cost goes down then we have more profits.  With that being said, as often as you hear the words savings and cost reduction, you also hear efficiencies and visibility.  I won’t bore you with a breakdown of the monetary value that efficiencies bring, although I often see people that can not articulate that value.

This post is about visibility. Not partial visibility, but TOTAL VISIBILITY.  Savings are the best, cost reduction is wonderful, efficiencies are great, but what is visibility and why should you care?

To start with let’s get one concept firmly in place.  It’s all about the money.  Sorry to make it so overly simple but that is a fact.  This entire industry (TEM) exists because of the customer’s desire to spend less money.  If your TEM platform provides your company with telecom savings then you spend less money.  If you spend less money then you make more money.  OK, enough of the Econ 101 lesson.

 With so much emphasis (understandably so) put on savings, what is the big deal about visibility.  In its most simple form, visibility is knowledge and knowledge is power.  Visibility into your telecom spend goes far beyond the T1 that you got for $12.00 less than your prior provider.  Visibility is the ability to look into every aspect of your telecom spend and see exactly what is going on.  As I mentioned before, any IT person can look at a bill and determine that one carrier is more expensive than another.

Let me give you a few examples of true visibility that actually have value.  Let’s assume for a second that your TEM platform could give you this information.  You do the math and decide if there is any money to be saved here.

  • Complete listing of every analog line you have (pretty basic stuff, I know)
  • A complete portfolio of your current bills broken down by location with an archive of prior bills (still pretty basic)
  • Filtered reports breaking down all T1’s, Analog lines, Local Usage and Long Distance (getting better)
  • Your entire inventory of circuits, lines, DSL, calling cards, etc. broken down by cost center and general ledger codes (starting to really show value)
  • The circuit ID numbers of the local LEC Loop for every T1 you have across the country (try getting this from your carrier)
  • The contract dates of every circuit with install date and term (no more automatic renewals)
  • The entire range of DID numbers associated to every T1 in your company (not an Excel doc in a manila file)
  • Every open installation work order with status, dates, configuration and notes  (compare that to hours of your IT staff sitting on hold with your carrier)
  • Every open trouble ticket with updates every 10 minutes and all (see sitting on hold above) 
  • Every disconnect order with contacts, dates and notes (how many lines never got disconnected)
  • A report that lists every analog line in your company that had zero usage (you might consider taking a look at those lines)  
  • A library of every document you have signed with your carrier (seriously, call your current vendor and try this one)

I could go on forever but I think the point has been made.  No one can argue that raw cost reduction is great.  The huge unseen value gained with total (not just seeing the bills in one place) visibility into your telecom spend will reap benefits equal to or greater than pure cost reductions.

The moral of the story is; Visibility = Money.  It’s really that simple.  So, if your company spends over $10,000.00 a month on voice and data services, go find a TEM Provider (www.temproviders.com) today!  Every one of them will show you how to save money but keep searching until you can find one that gives you the TOTAL VISIBILITY that you need to take control of your telecom expenses.

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Bundled Savings?

By
Joe Bjorklund

We just finished up a project with a customer and saved them about 32% off of their existing carriers plan.  There were several areas where they were paying too much but the glaring one was the “Bundled” long distance.

Here is how it works.  The carrier gets your T1 business and with that, they are going to provide you these great long distance rates.  Let’s say that you were paying 3.5 cents a minute for long distance.  This is not a terrible rate but certainly not great.  The carrier comes to you with their “Super Turbo 10,000 Plan” that gets you a bundled block of 10,000 minutes for $260.00 a month.  That is 2.6 cents a minute so you are saving the company over 25%!  This is great, your boss is going to love you, right?…..right?  Unfortunately in this scenario the likely answer is, NO!

The fact that your bundled rate is calculated at 2.6 cents a minute is true and also a good per minute price.  Here is the rub; you have purchased 10,000 minutes whether you use them or not and to make matters worse, if you go over the 10,000 minutes, you pay a different rate.  Yes, it’s higher.

Here was the situation for the customer that we helped.  They had 2 offices and each had the 10,000 minute plan at $260.00 a month.  We took typical months bills and this is what we learned.

Location A used 6,200 minutes and Location B used 14,700 minutes.  Location A used well under the 10,000 minutes but since they were on the “Super Turbo 10,000 Plan” they paid for all of them.  Location B got a great deal on the first 10,000 minutes but the overage cost them plenty.  See the math below.

Location A:  $260 / 6,200 minutes = 4.1 Cents Per minute (oops)

Location B: 2.6 Center per minute for the first 10,000 and 4.4 cents per minute for the overage.  Net result is 3.1 cents a minute (oops again)

The net/net of this is that we don’t recommend the “Bundled” long distance.

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Cost of Processing Telephone Bills

By
Joe Bjorklund

I met with the Telecom Manager of a trucking company yesterday.  He told me that his accounting department processes over 35 different bills from various telephone companies.  He was able to give me a feel for what he was paying for his T1 circuits and Long Distance.  He was actually receiving some pretty fair pricing from the different carriers that he could remember.  I asked him how much he thought the company spend to process those bills and get them to A/P.  We talked in detail about the process and both agreed to met next week with our individual assessment of that “soft” cost.  I am now on a RESEARCH MISSION to determine the true cost to a business to

1.  Receive the bill

2.  Verify the charges (Confirm disconnects, and track down credits)

3.  Break the bill down by departments

4.  Apply the General Ledger Coding to the bill

5.  Get the bill into the Accounts Payable system

I will post the results after our meeting.  It will be very interesting to see what he and I come up with.  Any comments on this will be GREATLY appreciated

Joe Bjorklund – Director of Business Development – vCom Solutions.  Contact Joe at: joeb@vcomsolutions.com

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