VoIP Tender Toolkit - Part 1: Preparation
This is the first installment in the “VoIP Tender Toolkit” series. I hope the complete series will provide everything you need to prepare, issue and evaluate a 500 - 5,000 seat VoIP Tender. Template documents will be provided where helpful. This series is based on actual experience and incorporates my lessons learnt over the years. In this first part I will run through the considerations before you start; defining business objectives, activities and expected timelines, budgeting, and resources required.
Business Objectives
Start the entire VoIP tender process by defining your business objectives. Too often have I seen people forget that technology is a business enabler and that business objectives provide the focus of a tender not technical objectives. Business objectives provide the reference point to make decisions towards getting the best value for money tender result, this may not necessarily be the best value for money technical result! (indeed it may not even result in a VoIP solution!). In my experience tenders commenced with a technical objective too often result in a poor business result and are consequently deemed a failure.
The following table provides some common business objectives and the potential VoIP tender results. Hopefully this highlights the reason for stating business objectives rather than technical objectives.
| Example Business Objectives |
Potential Tender Results |
| Provide telephony to a new office site |
Installation of a PABX, extension of services from an existing PABX or installation of hosted telephony service. |
| Lower telephony costs |
Renegotiation of call rates, renegotiation of maintenance contracts, installation of lower cost telephony solutions (PABX, extended services or hosted services) or outsource of telephony support |
| Increase business efficiency |
Integration of business software and telephony services (e.g. in call centre environments), solutions to save telephony administration time or new solutions to support under served business functions (e.g. home or mobile workers) |
Activities and timelines
The activities and related timelines for preparing and releasing a VoIP tender are presented in the following table. In general, the timelines are the same for any size company over 500 ends. Larger or more complex requirements need more work but usually have more people involved. The first step “Preparation” is the focus of this post, and the remaining steps except “await supplier responses”! will be the focus of the next parts in this series.
The activities and related timelines for preparing and releasing a VoIP tender are presented in the following table. In general, the timelines are the same for any size company over 500 ends. Larger or more complex requirements need more work but usually have more people involved. The first step “Preparation” is the focus of this post, and the remaining steps except “await supplier responses”! will be the focus of the next parts in this series.
| Step |
Timeline |
| Preparation | Month 1 |
| Business requirements gathering | Month 1 |
| User requirements gathering | Month 2 |
| Technical requirements gathering | Month 2 |
| Technical environment survey | Month 2 |
| Tender strategy development | Month 3 |
| Tender development and release | Month 3 |
| Await supplier responses | Month 4 |
| Tender evaluation | Month 5 |
| Contract negotiation | Month 6 |
Yes, the above table provides an elapsed estimate of 6 months! I’ve seen slightly quicker, but never less than 5 months. In an organisation larger than 500 people it just is not possible to get agreement and approvals any faster. It can be up to 9 months if a second stage of tendering is completed. Organisations who try to complete a tender in less time often miss key detail, make mistakes, and end up regretting it.
Budget
Too many organisations spend loads of money on running a tender process only to find they can’t afford any of the resulting proposals. Having a budget to produce the tender will manage short term cost expectations and having an idea on the resulting proposal cost range will manage the medium to long term cost expectations.
| Item |
Budget range |
| Tender process | ± 50% |
| Internal labour (see next section for details) | 29 weeks of effort |
| Consultant labour | 5 weeks of effort |
| Tender result | ± 30% |
| “no frills” telephony |
around £12 (per end per month over 5 years + call costs) |
| “advanced” telephony |
extra £5 for call centre functions extra £5 for voice recording (per end per month over 5 years + call costs) |
| Legacy or existing system integration | 10% of the overall solution otherwise not worthwhile |
Please note I have provided a cost per end point per month over 60 months as this is a reasonable life span of a telephony solution. The estimates include ongoing maintenance costs but do not include call charges. VAT in addition. The budget accuracy of 30% for the tender result and 50% of the labour resources acknowledges differences in solutions and deal size (labour varies significantly more). Vendor finance options will only effect cash flow but not the total cost (there’s no such thing as a free lunch!). The number of sites in a solution wont have a significant effect on the budget accuracy as long as each site has at least 100 users.
So as an example using the above table, a 500 user solution including 50 call centre seats including voice recording, will cost over 5 years about £270,000 to £500,000 + call costs + internal and consultant labour + integration costs (500 “no frills” × £12 × 60 months + 50 “advanced” × (£5 call centre + £5 voice recording) × 60 months = £390,000, 70% = £273,000, 130% = £507,000).
Resources required
The following table provides a breakdown of the labour estimate in the previous section. As usual the estimate is a guide and will hopefully be useful in preparing your own estimates.
| Role |
Activities |
Weeks effort ± 50% |
| Project sponsor (accountable for the tender outcome) |
Essential input to Preparation stage, Tender Strategy Development Stage and signoff and steering for key decisions. | 3 |
| Project manager |
Manage and co-ordinate activities and resources from beginning to end. | 16 |
| IT resources |
Key input to technical requirements gathering, technical environment survey and tender evaluation stages. | 3 |
| Business representative resources |
Key input to business requirements gathering and tender evaluation stage. | 3 |
| Procurement resources (may include legal and finance representation) |
Key input to tender development and release, tender evaluation and contract negotiation. | 4 |
| Total | 29 |
Consultant time was estimated at 5 weeks, this covers assistance across all stages of the process, but in particular insight and experience in the tender development and release, the subsequent evaluation and contract negotiation. Unless your company has specific VoIP tender experience I would not recommend excluding this resource as the benefit will far outweigh the cost when compared to the overall solution budget.
Summary
Successful preparation for a VoIP tender will mean your business objectives have been clearly defined, a schedule defining tasks, timelines and resources will have been developed and expectations on the approximate financial values resulting from the tender will have been managed with your project sponsor.
Part 2 in this series will cover business, user and technical requirements gathering.
Add comment February 23rd, 2009
For organisations planning to deploy 
