ROI Conclusions

In summary, the opportunities for cost savings are found in three areas:

• Network costs— Savings are usually seen in the procurement of equipment. For new buildings, data equipment—such as switches and routers—is a given. If the network can be designed so that these components also support the connectivity and communications for voice, then companies have just significantly reduced the capital outlay required.

® Administration costs— Savings are typically seen with the reduction in MAC, as well as the reduction in maintenance costs on an annual basis. This is a true opportunity for cost recovery, recapturing potential dollars budgeted each year and considered the cost of doing business.

® Application impact— Savings can be realized through new applications that improve business processes, resulting in potential revenue gain, and often resulting in cost reductions in areas that have nothing to do with telecommunications.

Finally, in a convergence model, calculating ROI for convergence is an exercise that asks companies to step outside their comfort zones and confront scenarios, practices, and processes that might be uncomfortable or even embarrassing. This openness is particularly critical when investigating new applications that will alter or enhance business processes, because the application might need to be developed to target the company's needs.

Many of these applications do not exist today. This is important to remember. They are laying dormant in an organization, waiting for someone to bring them to light. Because these applications are written to interface with existing back-end systems, using industry-standard interfaces, protocols, and languages, these applications can be developed much more quickly (and less expensively) than people realize.

In addition, the potential impact of these applications is limited only by how open-minded organizations are. The biggest killer for these potential applications is the notion that, "This is how we've always done things." This approach is essentially saying, "This is how we do business. It's how we've always done business. The costs that are associated with this are built into our budget. We don't worry about how we can reduce these costs!"

Defeating these paradigms is key to winning the ROI battle in terms of applications. Most manufacturers who provide IP telephony solutions also provide tools to help with ROI calculations. These tools require companies to open up their books (and minds) and share them with their partners, who can help them identify potential areas of business impact, as well as traditional telecommunications savings. Selecting the right partner, therefore, is of utmost importance, not only for the realization of ROI, but for the overall viability of the solution selected. This is the topic for the next chapter.

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