Tag Archives: Alsbridge Inc.

AT&T Virtualization and the OpenStack Bandwagon

Little Red Wagon

Alsbridge Transformation Team –

The Wall Street Journal recently reported that AT&T’s network virtualization efforts are moving beyond testing and prototyping and into large-scale deployment. The news suggests that the carrier could gain a significant competitive edge by reducing capital expenditures and increasing capacity.

In a broader sense, the deployment reflects the changing nature of the cloud space and foreshadows a potentially significant consolidation in the relatively near future. Specifically, AT&T and other big players are increasingly embracing open source technologies and moving beyond the elasticity limitations of the commercial virtualization approaches they had previously been using.

AT&T joined the OpenStack Foundation as a member back in 2012 and now has Platinum-level board representation. Assuming that OpenStack is in fact what’s under the covers of the new virtualization offering, this will indeed be a significant competitive advantage. Although AT&T jumped on the OpenStack bandwagon relatively recently, it looks like they’re already starting to reap the benefits.

Oh, You Wanted That Telecom Plan?

Price Cut Tag

Nichole Wells, Consultant

Don’t you hate it when you buy something and discover that you could have gotten something else that you liked better, and for less money?

Telecom carrier plans can be like that. Programs and options change on a regular basis, as do variations between small, medium and enterprise business offerings. Pricing, flexibility and support options also fluctuate, depending on carrier financial priorities and objectives, not to mention quarterly sales targets that have to be met. For example, enterprise buyers typically aren’t eligible for less expensive small-business wireless plans. However, we’ve seen instances where carriers make an exception to “make it work” and keep a client happy.

The point is that it’s worth exploring and understanding current vendor offerings and market nuances. Keeping abreast of market changes, carrier behaviors and what’s going on behind the scenes can have a significant impact on pricing and the overall contracting environment. If nothing else, customers can set a high level of expectation for carriers to communicate the status of new services coming on line, as well as established offerings being slated for retirement.

Plan options aren’t the only thing that’s confusing about telecom services. Pricing, contract terms and invoices can be maddeningly obtuse. There, too, customers need to demand clarity to understand what they’re paying and what they’re getting.

Telecom Pricing – Keep it Simple

3d graphic of a happy Dollar icon nodes in network cable chaos

Maggie San Miguel, Senior Consultant

In this day and age, why is it so difficult for a company to get a clear picture of their total telecom spend and contract landscape? Telecom rates are contained in a hodgepodge of formats that include contracts, amendments, addendums, schedule of charges, service order attachments, tariffs, service guides, discount tables, promotions, credits (both one-time and recurring) and ICB quotes. Invoicing and Billing is even a bigger quagmire. You have different names in contracts, not to mention different billing descriptors that don’t match the nomenclature for the contract usage types. My favorite is when a carrier offers lower access costs in “Lit” buildings, but then can’t tell you where those are, or even if you’re in one today. And what exactly is Type 1 versus Type 2, and Type 2 versus Type 3?

We know the answer, of course – obtuse pricing is a tried-and-true tactic vendors employ to muddy the waters and gain an edge at the negotiating table. If clients lack insight into a carrier’s pricing, they struggle to understand how Vendor X’s apples compare against Vendor Y’s oranges, and whether either offering is aligned with competitive market standards. Amidst this confusion and uncertainty, clients often leave money on the table.

Clearly, the client bears the onus to understand the contract, reference actual pricing included in the agreement and define a true contract rate as the basis of negotiation. That’s a challenge, but it also represents an opportunity – if you as a customer can establish market-based guidelines and comparative standards, and a consistent, leveraged approach, vendor negotiations can be a dialogue rather than a battle, and you can get past the smoke and mirrors.

And while vendors may not relish the thought of a more level playing field, increasing transparency and consistency will ultimately facilitate an honest, mutually beneficial relationship.

Pricing clarity is one of several initiatives discussed in a recent Alsbridge white paper that examines how the tactics of cost reduction can support the strategy of network transformation.

EU Openness an Opportunity for Global Network Management

Circuit board background - Europe - JPG version

Margot Wall, Managing Consultant

In recent years, the European Union has taken steps to begin operating as a single economy, going beyond a single currency to develop consistent standards for information privacy and freedom of movement for EU citizens.

That philosophy of openness is extending to telecom providers, with new entrants into the fixed and mobile operations space being granted freedom to offer their services across the EU. While the old Postal Telegraph and Telephone (PTT) operators continue to function under (and often hide behind) a great deal of regulation, the new market entrants – as non-incumbents – have more freedom to build, price and negotiate.

Meanwhile, many U.S.-based multinationals are looking to operate more globally and centralize management. The WAN is typically under a single invoice, but other services are largely decentralized and present an opportunity to drive out cost. To seize this opportunity, many businesses look first to Europe: It’s accessible, it’s probably where they first expanded and costs there are probably out of control.

For these enterprises, the new players in the EU market represent a potential option beyond the traditional PTT. The typical practice in Europe is to repeatedly renew local and mobile contracts and to think of the PTT operators as “Ma Bell.” Renewals involve either the country manager striking an agreement to get another plan added or drive another access level discount. The business often recognizes that the market outpaces these auto renewals, and that consolidation and optimization is really the key to maintaining control over costs. The challenge, however, is to understand the local and mobile options and to know which options are viable and which aren’t.

To develop an effective consolidation plan, insight into the players, their footprints, services and solutions is imperative. In addition, clients need an understanding of the specific steps involved in building their inventories right – and doing it right the first time.   Any strategy, any RFP and any RFP response depends on a valid and accurate inventory as the first step in understanding the current situation, and the last step in planning any transformation project. Finally, for both mobile and fixed (local voice) service, regulatory knowledge is needed to navigate EU privacy laws, while still getting access to billing portals.

Bottom line: the evolving EU economy presents some significant opportunities for optimizing global communications by leveraging the capabilities of new market entrants. And as the market moves away from TDM-based voices services, European players offer some interesting options on next-generation technologies. But knowledge of local conditions is a must.

An advisor who understands the technology, the local players and regulatory environment can help overcome the obstacles and achieve a positive outcome. It’s like going to Paris if you’ve never been and don’t speak any French. You can go on your own, or with someone who knows the language and customs.

Margot Wall is an Alsbridge Managing Consultant in the Network Services Group.

Head Out of the Clouds – When a Premises-Based Contact Center Makes Sense

Businessman standing and hiding his head behind an empty cloud

Mark Minorik, Director

Cloud-based contact centers offer a variety of potential benefits, including cost savings, flexibility to align with business needs, improved customer experience and opportunities to increase revenue.

In certain situations, however, traditional premises-based contact centers might be a better fit than a SaaS or cloud solution.   For example, an enterprise that requires uninterrupted and continuous availability – such as mission-critical emergency services or air-to-ground communication – may want to eliminate possible failure points within an IP network.  In this case, a premise-based solution might be a better choice than cloud.

Another possible scenario favoring a premises-based solution is where an enterprise has recently made large capital investments in upgrading their internal contact center applications (e.g. call/work distribution) and may not be able to reap financial and/or other benefits by migrating to cloud-based services. Similarly, early adopters and users of beta or emerging product (multi-modal applications) may find that cloud providers can’t adopt and/or deploy new software or services in a timely or cost-effective manner.

Companies that require highly custom or unique feature functions (e.g. unlimited skills) to run their business may not be viable candidates for the cloud, as some of these feature may not be available. Understanding the solution and roadmaps from both premise and cloud providers is critical when evaluating service models and options.

Non-US markets where regulations dictate local use, or where data and IP voice and transport are limited or have poor track record of availability, may be a poor choice for cloud-based services. Knowledge of the market and the geolocation of the contact centers is imperative when charting the roadmap and making decisions.

Finally, while enterprises rarely require end-to-end control of their environment, those that do find that cloud and outsourced solutions will generally fall short.  Assessing the reasons for control and conducting due diligence on management and operating models can help determine the choice between premise and cloud solutions.

As with any technology investment, analyses of service levels, capabilities, operations, functionality, cost, and other critical services and components, such as disaster recovery and continuity, are essential when comparing cloud-based to premise-based contact center solutions.

Mark Minorik is an Alsbridge Director, Transformation Services.

Will HP Share the Toys Now?

Child holding set of colorful jacks

By Chip Wagner, CEO

A few months ago, I had the opportunity to witness a number of emerging technology breakthroughs from HP and its labs (and I bet they didn’t even show the uber secret stuff). What I saw was Star Wars-like in its advancement and eye-wateringly impressive.  At a dinner following the demonstration, I asked Meg Whitman why, as the makers of the light sabers, hyperspace drives and cloaking devices (or “toys” if you prefer), HP seemed unable to use their innovations smarter and earlier than their competitors – who buy the same technology from HP and then use it to serve their own customers. In other words, why should a pure play services competitor overseas be able to outflank the maker of the technology?

If the split into two businesses allows HP to answer that question and be more nimble and imaginative in using their own capabilities, then it can’t help but be a good thing. From the outside looking in, it seems that HP never fully capitalized on the potential synergies from integrating EDS’ services business.  The organizational structure, perhaps its revenue accounting approach, and the historical product culture/mindset may have contributed to this. HP’s own data centers were not run by the services business, rather they stayed in the internal IT organization. It appeared that there was a lack of coordination between the products and services businesses, leading to sub-optimal outcomes.

In order to leverage that tradition of innovation, the new HP must be faster to market, aggressively exploit its breakthrough technology and proactively use that technology to re-engineer and re-craft their managed service contracts well ahead of renewal time. If they can do that, the seeming cannibalization of their book of business will in fact be a fortification.

And consider this: the most common frustration voiced by enterprise managed services customers these days is lack of innovation. That demand for new thinking and creativity can potentially be the very thing that energizes HP’s services business portfolio. Meanwhile, the printer and PC folks can do what is best for them. Maybe the services guys will figure out how to use one or two of their sister company’s products too, although cross-selling products into the services side of the business has long been an HP challenge.

The jury is out, but what an opportunity if it can be harnessed.

Don’t Pay Too Much (or Too Long) for Custom Network Services

By Beth O’Hern

In an ideal world, you as a telecom services buyer negotiate contracts based on existing, validated rates for standard services and well-defined business terms and conditions. This helps ensure relevant comparisons, competitive rates and quality service. In many cases, however, you require specialized, custom services such as private rings and high bandwidth private lines. Pricing for such services is highly dependent on location, routing and availability, and typically requires vendors to invest in special equipment and expertise. These investments are generally passed on to you, the customer. While that’s reasonable, you often continue to pay high rates long after vendors recoup their investment and have significantly lowered their internal monthly costs.

One reason this happens is that specialized services are typically contained within a larger network services agreement and, during renewal, tend to be wrapped into the big-picture discussion rather than separately and directly negotiated. As a result, the high rates get pushed into the next agreement. Moreover, the competitive landscape for custom services is unfamiliar, so finding a market-based comparative precedent for special services presents a challenge.

How can you prevent this long-term overpaying? At a minimum, insist on including custom services in renegotiations as a separate discussion item. While direct, like-for-like market-based pricing comparisons are hard to come by, you can apply rules of thumb regarding margins and payback period for custom access and special builds. Using the contract to show evidence of install dates and details such as ring locations and private route paths, you can make an effective case for lowering monthly rates.

Vendors will typically push back, stating that the complexity surrounding custom services requires special support on an ongoing basis. But don’t be too quick to accept that argument, and don’t hesitate to demonstrate a willingness to put the service out to bid. Keep in mind that custom services generate significant margins for vendors, so even with lower monthly rates your deal will remain a profitable one and your vendor will not want to see you walk.

While the opportunity varies, the size of the prize can be significant for a Fortune 1000 enterprise. I’ve seen instances where a business spends $10 million annually on capital-intensive custom services and could easily lower that spend by 40 to 50 percent.

Bottom line: don’t ignore the potential of this low-hanging fruit.

SG&A E2E Transformation – 2015 and beyond

business and technology concept - businessman hand with chart on

By Michael Fullwood

The pressure continues to mount on corporate C-suites as Wall Street demands ever increasing shareholder value, while Main Street demands higher quality of goods, services, and consumer value. Neither is particularly interested in segmented cost cutting measures of certain back office functions, or isolated initiatives related to quality or lean processes. Indeed, both Wall Street and Main Street expect true enterprise value, a tangible barometer of a firm’s strength and sustainability.

Leading corporate executives recognize this and are rethinking their Sales, General and Administrative (AG&A) models. Rather than examining specific back office functions (traditionally customer service and accounts payables), these business leaders instead comprehend the magnitude of these mandates. As such, they’re aggressively assessing end-to-End SG&A P&L components, with the prospect of embarking upon an SG&A Transformation.

What does end-to-end SG&A transformation actually look like? The process will vary for every firm, but these three keys are generally shared by all:

  • Sales – Optimize the revenue cycle
  • General – Source and procure more prudently
  • Administrative – Become more productive in the back office finance organization.

The precursor to implementing this type of transformation is a carefully crafted roadmap, the principal deliverable of an assessment of these areas. Furthermore, the assessment is founded upon each of the three aspects having a unique primary objective, but common secondary objectives.

Sales (Order-to-Cash) – In today’s globally competitive marketplace, organizations continually seek to optimize revenue opportunities through the maximization of recurring revenue channels and creation of other non-recurring cycles. The efficiency of the order-to-cash organization enables stronger revenue. Whether it’s shared services, internal transformation or outsourcing, world-class sales operations are being evaluated in direct connection with an assessment of procurement and finance operations.

General (Requisition-to-Procure) – For decades, direct procurement has garnered a great deal of corporate executive attention; and as long as gross margins remain a crucial financial metric, this will be the case. However, the best of best global companies have seen substantive bottom line positive impacts to their P&L by managing and influencing a higher percentage of their indirect spend. Assessing the requisition-to-procure functions with the objective of putting more IP spend under the influence of the sourcing/supply chain organization has consistently proven to be a catalyst to secondary, but sizeable benefits. This is directly related to and complementary to a finance assessment.

Administrative (Procure-to-Pay & Record-to-Report) – As exhibited during the 80’s and 90’s with the transformation of manufacturing in the automotive industry, managing internal cost centers like back office finance has a direct correlation to EBITDA and an organization’s ability to increase quality of goods and services. Operating cost metric outliers in the procure-to-pay and record-to-report functions will weigh down a company and impede agility. Yet, evaluating finance productivity in a vacuum and untethered, particularly to req-to-procure functions will only produce a partial answer.

In the final analysis, an assessment and subsequent enterprise transformation of SG&A increases shareholder value and consumer value through:

  • Optimization of the revenue cycle
  • Maximization of the spend under influence and ultimately
  • Reduction of Cost

Higher Revenue + Lower Cost + Operational Efficiency = Market recognized Enterprise Value (Shareholder & Consumer).

About Alsbridge

Alsbridge is a global management consulting firm that helps companies enable their businesses and reduce costs by optimizing their service provider relationships.  As a trusted advisor to over 40% of the Fortune 500 and FTSE 250, we work with over 200 clients a year on over $11b in spend.  Our experienced consultants leverage market insight and deep benchmarking databases to help clients align their requirements to the optimal vendor solution, apply best practices, negotiate terms at fair market prices and improve relationship governance. We help clients utilize the most cost-effective and value-added sources globally for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.

Alsbridge to Sponsor the 2013 CVS Caremark Charity Classic Golf Gala in Rhode Island

Award winning benchmarking, sourcing and transformation advisory firm, Alsbridge, Inc., today announced that it is pleased to sponsor the 2013 CVS Caremark Charity Classic, a non-profit organization and Southern New England’s largest charitable sporting event, taking place June 23- 25, 2013 at the Rhode Island Country Club, Barrington, RI.

The CVS Caremark Charity Classic, was established to raise money via a world-class golf venue for the support of other non-profit agencies throughout Rhode Island and Southeastern New England. Since 1999, the CVS Caremark Charity Classic has allocated more than $16 million in charitable donations to hundreds of philanthropic organizations. $1.2 million was raised in 2012 alone.

“Alsbridge takes social responsibility and commitment to the community seriously. We believe in giving directly to such organizations that are dedicated to helping the less fortunate,” said Ben Trowbridge, Chairman and CEO, Alsbridge Inc. “And the CVS Caremark Charity Classic provides a unique opportunity to do just that by bringing together world-class golf with worthwhile agencies, allowing them to extend their mission and services to so many.”

A three day charitable sporting event, the 2013 CVS Caremark Charity Classic brings together 18 elite golfers from the PGA, LPGA and Champions tours for a great cause as they compete for a $1.55 million purse. Each year the CVS Charity Classic assesses critical needs within the community and responds with targeted grants to support those most in need. Currently, it supports 20 working charities, in addition to 80+ additional nonprofits focused on health, education and support for children and families at risk and in transition.

For further details about the charity and the event please visit:

http://www.cvscharityclassic.com/content/charity

About Alsbridge Inc.

Alsbridge provides world class sourcing advisory and benchmarking services for the CIO, CFO and CPO.  We’ve helped hundreds of companies reduce costs and get more value from their vendors.  Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors.  Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP) based on the value delivered to clients.  This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.