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Cheaper telecommunications costs do not result in long-term savings

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Companies continue to spend Billions of Rands on voice and data communications, however they are under a common misconception: that they are getting a reduction in cost from service providers who promise cheaper prices.

This is according to Craig Young Group MD of Unison Communications who sites a BMI-T SA IT Market Overview Sizing and Forecast report which states that corporate and Top 350 Market Telecoms service types spend for 2008 for fixed voice, mobile, LCR (leased cost routing) and bulk SMS was believed to reach R34.B Billion.1

“While cost reduction is certainly on the agenda of decision makers, what companies don’t realise is that short term communications price reductions don’t necessarily reflect long term,” says Young. “In fact costs actually escalate because communications infrastructure is complex with a myriad of technologies, service providers, data services and interoperability required.”

“While we would like communications infrastructure to be easier, cheaper and seamless, it’s not. A smorgasbord of incompatible technologies and a number of service providers within their communications environment comes at a high administrative cost,” explains Young.

On top of this, Young says costly outsourced specialist skills, are required to improve, integrate and extend their infrastructure to service and meet customer demands. “The reality is that this expertise costs,” he says.

Young recommends companies to take control of their communication infrastructure and acknowledge that their existing environment is complex.

He recommends the following:

1.Analysis: Enterprises don’t do enough to get the information they need to make decisions. They need the business intelligence which shows them what kind and how much communication is flowing across their network. Unpacking
traffic generated and understanding the impact of how users communicate and interact is critical. It is essential that this information is based on the company’s own interpretation and not on the value proposition given by service providers. In addition, they must be able to incorporate information from communications into the Financial Plan, from there empowered decisions based on business/ financial factors can be made.

2.Longevity through interoperability: By knowing the future requirements for further convergence within their networks business can make decisions based on solutions that would yield the best ROI over the long term rather than cheap fixes that produce immediate results but end up costing more in the long run.

3.Planning: Bring in more information to the plan including true financial modeling of infrastructure and scenario planning. Identify key communication priorities based on business outcomes requirements and not technology requirements can be made though accurate planning.

According to Young, key for any corporate communications environment is to remember that interfacing between the users and client communication on an external and internal level needs to be at a standard where the course of business is fully supported and not hampered. Even if companies avoid an expensive upgrade system, integration still has to take place as seamlessly as possible.

By unpacking the traffic flowing across their network enterprises need to interpret this data. There is great potential for cost resolution, however businesses have to take charge of their environment and not simply purchase technology for technology’s sake or because it is cheaper.

Unison’s solutions and skills help companies track, control and manage their telecommunications expenses.

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