Six Options for Managed IP Communications

Many traditional businesses maintain separate networks for data and voice communication. With a converged voice-and-data network, companies can often reduce costs and gain significant productivity benefits.

However, the cost of implementing and managing the solution internally can be prohibitive. A more affordable option is to out-task IP communications to a managed services provider. This arrangement avoids initial CapEx and provides economies of scale -- because the service provider already owns the required infrastructure.

You can choose from several options for managed IP communications services. The following describes typical managed IP communications service offerings, and how you can apply them.

Business IP Telephony Services
This includes both subscriber and group calling services. Companies that need sophisticated PBX features can use a managed IP telephony service. Many small businesses can also receive the functionality that they require with a managed IP telephony solution.

Site-to-Site Voice
This service is really useful for companies with several branch offices that communicate regularly. A site-to-site voice service enables you to call from one site to another using the service provider's voice-over-IP (VoIP) infrastructure, avoiding long-distance toll costs. You can maintain a private dial plan, including support for simple 4-digit dialing.

Public Switched Telephone Network Access
Access to the traditional public switched telephone network (PSTN) can be enabled centrally over the service provider's network. Central PSTN access provides economies of scale, which, in turn, help reduce your costs.

Unified Messaging
These capabilities enable you to retrieve and respond to voice, fax, and e-mail messages from any phone or PC within your organization. Your team can check any type of message from the same inbox -- either the voicemail box, accessed from a phone, or the e-mail inbox, accessed from a computer. Rules-based call routing and speech recognition can further enhance usage for you, and your callers.

Voice over VPN
This service can reduce toll charges for your telecommuters and mobile team members. Using an IP phone from home, or SoftPhone software on your laptop during travel, you can easily make voice calls over the same, secure Virtual Private Network connection that's used to access data network applications.

Other Enhanced Services
You can also increase productivity by delivering new applications and information directly to your team's IP phones. As part of a managed IP telephony service, providers can provide customized Extensible Markup Language (XML) applications -- for example, to access team calendar information or read news stories relevant to your business.

Contact a managed service provider, to learn more about these IP communication capabilities, and the associated cost savings or productivity benefits. Most providers will have customer case studies for your consideration.

The Business Case for BT Convergence

The structured approach of Business Technology Management (BTM) is a proven methodology that seeks to unify business and technology decision-making at every level within a company.

Originally conceived to address the needs of large enterprises, there are now very apparent benefits for both small and medium sized businesses. Let's consider the growing body of evidence that supports that business case.

Put simply, BTM is applied to ensure that a company's business strategy can be realized by the technology it deploys. This approach is used by business leaders to align, synchronize and even converge technology and business management for the purpose of ensuring better execution, risk control and profitability.

The Path of Total Convergence
Clearly, these are the type of guiding principles that should transcend all businesses, regardless of their size. Let's explore the meaning of those three states of progression.

Alignment is defined as a state where technology supports, enables, and does not constrain the company's current and evolving business strategies. It means that the IT function is in-tune with the business thinking about competition, emerging threats and opportunities.

Synchronization implies that business technology (BT) not only enables execution of current business strategy, it also anticipates and helps to shape future business models and strategy. In this state, BT leadership, thinking, and investments may be ahead of business needs.

The state of Convergence includes both alignment and synchronization, with technology and business leadership willing and able to operate simultaneously in both spaces. Essentially, the disciplines have merged in both the strategic and tactical senses. A single leadership team working together to orchestrate one intertwined agenda.

A Business Impact Case Study
Does this seem like an academic exercise? Consider the following facts, and then you decide.

According to the BTM Institute, in research covering 50 industries, companies with a more converged business technology management exhibited superior revenue growth and net margins relative to their peer group:

• 12% average annual revenue growth vs. 4% for their industry groups.
• 36% average annual earnings per share growth vs. 7% for their industry groups.
  

Not only did these companies grow at a faster pace than their peers, but they also exhibited consistently greater returns than those of their competitors:

• 6% higher EBITD margins than those delivered by their industry groups.
• 4% average higher return on equity, 8% average higher return on assets and 14% higher return on investments.
  

Therefore, perhaps the most important question is not whether you should strive for BT convergence, but how will you be able to compete with those companies that have already evolved to that state? It's something to think about, as you consider your next steps.

Small Community Banks, Big Managed Service Benefits

Community banks have attracted new customers by offering a truly personal banking experience that their larger rivals can't match, and by maintaining close ties to local communities.

However, all bank customers are demanding Business Technology driven services that many community banks simply can't provide with their current infrastructures. The lack of the latest technology can make migrating to new services prohibitively complex and expensive.

Community banks have depended on multiple providers for their voice and data networks. These banks found that they were paying substantially more for their network connections than larger institutions.

Moreover, having to deal with multiple providers can strain the smaller bank's modest IT staff. Implementing and operating a new converged voice/data/video IP network would overwhelm an IT team that usually handles simple tasks.

In addition, deploying a new IP network could negatively impact the community bank's operating budget. In fact, the total cost of ownership (TCO) for a typical bank's voice and data networks is second only to employee salaries and benefits.

Truly Demanding Operating Environment
Adding to these business challenges is the banking industry's strong emphasis on security and business continuity. Banks must be certain that their networks can pass their banking regulator's annual IT audit -- and deliver 24/7 services to customers in the event of a major disaster.

A strict regulatory environment and tight budgets make community bankers conservative when it comes to implementing technologies they consider unfamiliar. One solution that's proven, and likely to deliver lower operating costs, is the out-tasking of IT and communication network needs to a managed service provider.

A managed service solution can reduce a community bank's recurring voice and data expenses by 10 to 25 percent, with even greater reductions possible for larger banks.

Less Restrictions, More Freedom to Innovate
That said, an out-tasked IT and network infrastructure scenario isn’t purely about cost-reduction, it's also an enabler of customer service innovation. As an example, community banks are now deploying TelePresence applications that simplify the challenge of delivering full-service offerings at their distant branch locations.

A customer at an outlying branch can contact a bank officer at another branch and talk face to face without having to travel a great distance for the meeting. Plus, all required transactions can be completed locally.

Small community banks can now gain big Business Technology benefits, thanks to the creative use of managed services.

How to Enable the IT to BT Transformation

According to Forrester Research, as technology becomes integral to all types of commercial offerings and associated business strategy, the traditional model of IT as an independent and monolithic entity is clearly obsolete.

A proven Business Technology (BT) model will replace IT's legacy orientation -- with a focus on providing business value through process-governed services, measured in business-relevant terms.

Forrester believes that all business professionals should understand what is driving the shift from traditional IT -- as well as the key challenges around strategy, process, and culture when implementing BT practices.

So, how do you avoid the mistakes of the past, and pro-actively transform your IT capability to address today's apparent challenges? Forrester offers three key suggestions.

Deliver services and value, not hardware and software
IT's traditional focus on system components means that it has neglected to maximize business-relevant services for its internal customers. This piecemeal approach led to excessive complexity and redundancy.

In contrast, BT convergence is meant to align or better synchronize disparate processes and technologies into integrated services that provide value to the business user.

Organize around holistic processes and a lean culture, not silos
Instead of allowing low-level tactical responses to proliferate, BT relies on a broader view of IT processes in order to make decisions that maximize value for business users.

This process shift must often be accompanied by a culture change. Lean methodologies and behaviors shed the traditional IT use of one-off workarounds in favor of continuous aggregation, experimentation, and learning that keep sight of overall business objectives.

Measure performance with business-relevant metrics, not IT assets
BT also means stronger performance management systems. IT has traditionally focused on providing resources that sometimes don't have a clear impact on business outcomes.

As an example, server availability and capacity utilization, while important, are not relevant to business executives. By replacing technical benchmarks with metrics like alignment to business strategy and IT spend ratio, the BT model enables decision makers to objectively consider business cases for the inherent value they provide.

Intro to the Business Technology Roundtable

Today, the application of technology is an integral part of most businesses – in some shape or form. However, while many decision makers are now primarily concerned with using technology to pursue new business opportunities, and gaining business-related capabilities is their main objective, the vendors and suppliers that they encounter sometimes don't speak the same language.

Matching buyer's business needs with technology vendor's offerings is sometimes referred to as the business/technology alignment chasm. Filling that void with substantive information, meaningful guidance, and compelling "how-to" storylines is the charter of the Business Technology Roundtable (BTR). We seek to shed light where there has been an apparent absence of editorial illumination.

A business technologist -- perhaps a new term to some -- should be focused on driving business technology adoption, rather than purely the acquisition of new systems.

They should also value delivering business results promptly, instead of merely applying inventive product features and functions. Once informed, they'll likely crave low-cost integration into existing business processes, pay-as-you-go pricing, and efficient knowledge transfer.

Given this backdrop, new business technology adoption is often more dependent upon changing behavior than the common prior scenario -- changing underlying technology.

Within this new scenario, the insights and recommendations of trusted peers and independent subject-matter experts supersede all others in the process of choosing a justifiable approach, and supporting key business decisions.

As the co-authors of BTR, we will be on the lookout for resources -- plus proven and repeatable processes -- to speed-up the shift to subscription-based business technology offerings. We'll also highlight the competencies required to enable the facilitation of adoption education and acceleration.

A Call to Action
We invite you to join us in an exploratory dialogue about managed Business Technology services, and welcome contributions of your ideas and associated expertise, as we embark upon this journey together.