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.
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 Successfulpreparation 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.
The official launch for Microsoft Office Communications Server Release 2 is tomorrow… get the details here.
Some of the new features include call distribution via the Response Group Service (including longest idle, round robin) and the option to front end the service with a voice prompt for callers to select an option.
Group Chat provides chat room functionality together with archiving abilities.
There are new features on the mobile client and a new attendant console for reception staff.
Gathering requirements for a new telephony solution is a time consuming task. Usually a project sponsor will have a good idea of what is required, however often specific requirements of the various users within a company need to be teased out.
Workers at remote sites, corporate head quarters, contact centres, reception areas, those who travel frequently, and those who need voice recording all have very different telephony needs. Often the best way to get this detail is through face to face surveys.
An example survey for a 500 user organisation, two sites, and 60 user call centre is available on our resources page, http://inrich.co.uk/resources/, in Microsoft Word format. This customer (customer name removed in the example) needed to replace their ageing PABX. In addition to capturing their current requirements they needed to make sure nothing was missed when evaluating future solutions.
The survey was emailed to key user representatives to stimulate thought. Then the information was gathered face to face to make sure all concepts and the true drivers behind each requirement were understood. Enaging users in this manner has an added benefit of building user support for the selection process.
Perhaps this survey will help provide some guidance for your own telephony project.
I have actually been using the SpinVox service for over a year as a VIP customer. I can vouch for the reliability and accuracy of the service. More importantly the voice to text feature is a great time saver. I can read a message faster than calling my voicemail, stepping through the menus, and then listening. I can also read a message in circumstances when I can’t easily call my voicemail (perhaps while in a meeting for example). In short, I could never go back to listening to voicemails!
Best of all is anyone can use the SpinVox voice to text service irrespective of the Avaya announcement. If you signup with SpinVox you are provided with a voicemail number and simple instructions to program your mobile and/or landline to use this number as its voicemail number.
Single Number Reach, single voicemail, presence and softphones… hopefully this presentation provides some stimulation when considering the feature requirements for your own organisation. The presentation is available for download as a PowerPoint document or viewing below together with audio.
One of the biggest criticisms leveled at UC provider sales pitches is their focus on ‘soft’ benefits, such as time saved for the average office worker and increased productivity. Of course, what most organisations need in order justify a UC purchase decision is reliable evidence of ‘hard’ benefits such as cost reduction and accelerated time to market. ShoreTel’s promotion of the energy efficiency of its solution provides an interesting example of a UC provider trying to address that need.
ShoreTel’s claims are based on a report it commissioned from the Tolly group to investigate the power consumption of its IP switches and IP phones relative to those from other suppliers. These tests were then used as the basis for projections of the typical energy consumption of ShoreTel’s UC solution in various deployment scenarios. These projections estimate that a ShoreTel UC system on a network made up of 350 users at a main site and 19 branch offices would use 45% less power than Cisco’s UC offering. At a single site with 65 users, the saving would be 44%, and that deployment at a main site with 1500 users plus one regional and one branch office site would produce savings of 37%.
On the one hand, it’s shame that the figures that ShoreTel is quoting here are only projections - many customers will only be convinced if they see numbers that originate from real world deployment. On the other, ShoreTel should be commended for having enough faith in its own technology to risk a severe loss of credibility if customers make a purchase on the strength of these energy saving projections, and then fail to achieve a comparable result in the field.
The variety of applications available to run directly on VoIP phones is quite amazing; world clocks, weather forecasts, stock tickers, room booking systems and even remote surveillance. These applications definitely provide a novalty value but do they actually provide any business benefits?
At Inrich Consulting we only see true businesses benefits when phone based applications remove the need for more expensive physical alternatives such as a PC, touchpanel or information kiosk. In other words the benefit is cost savings! Generally this excludes applications for desk based office workers as they already have a PC … and lets face it, no matter how cool it is to have a stock ticker on your phone there is no way you will continue to use this once the novalty has worn off.
Example locations that do benefit from phone based applications include; booking systems in meeting rooms, ordering systems in hotel rooms, paging systems in hospital wards, and staff directories in office corridors and reception areas. In these circumstances the phone can provide specific functionality where a more expensive PC, touchpanel or information kiosk would have been required.
The growth of phone based applications is directly due to vendors providing software development kits for third parties. Companies such as Berbee, LiteScape, and Eporta have found the potential development opportunities for customers has grown as the installed base of VoIP phones, with processing power of small PCs, has grown.
A specific and more unusual example from a project we have been involved with is the implementation of an audio visual room control system. The above screen shot shows the interface. Users within this banking client could control everything from the lights, displays, and change channels on an IPTV enabled set-top box by using the touch screen on the phone.
The overall solution used products from Pivod (for the XML applications), Starbak (for the IPTV content delivery) and from AMX (the room control systems which were IP enabled).
Single number reach, Presence, Instant Messaging, Click to Call, single voicemail box… these are some of the key features that separate a telephone system from a Unified Communications system.
A valid question for the technology decision maker in a large enterprise is to ask “why do my employees really need this?”.
There are many answers, one of which may be “because your employees will expect these tools!”.
Imagine the office before email. Business still functioned. Imagine having an office now without email. What would your employees say then? It is probably a fair statement to say email is a necessary requirement in today’s business environment. Notice I never mentioned a business case.
Employees have email at home, they had it in their last job or when at school. Employees now expect and rely on email as a communications tool.
If we take the spread of consumer Internet based Unified Communications offerings then perhaps it is fair to assume that people will start to expect Unified Communications tools in the workplace. Perhaps not now, but in time I propose they definitely will.
For example take the biggest consumer Internet company of them all with Google’s GrandCentral (single number reach, single voicemail) and Google Talk (VoIP, presence and Instant Messaging). How many students (the employees of tomorrow) do you know without an Instant Messaging account?
British Telecom may be seeing the trend, or hedging their bets, through an Internet enabled service offering with RingCentral called BT RingCentral. A service for small office and home office that includes fax to email, single number reach and a single voicemail box.
While neither of the above are exactly a complete Unified Communications solutions they are definitely showing signs of evolving.
So perhaps decision makers in large organisations when considering the latest Unified Communications solutions available to their organisations will need to ask themselves “can I afford not to provide Unified Communications tools to employees?”.
Some highlight news items over the last fortnight in enterprise telecommunications:
Enterasys has formed a joint venture with Siemens Enterprise Communciations by taking a controlling stake in the company. This provides the networking company with a voice offering to aid competing with companies such as Nortel and Cisco who supply both voice and data solutions.
Meanwhile Cisco who already has a voice and data solution portfolio has announced an arrangement with HP to collaborate on Cisco Unified Communications products. Some analysts see this as acknowledgement by Cisco that partnerships with competitors are key to expanding their market.
Energy efficiency of equipment is making headlines. According to the Tolly GroupShoretel IP Telephony will use up to 37% less energy than Cisco for a 1,500 end deployment, thus reducing total cost of ownership and helping the environment. I’m not sure if the absolute comparisions are of too much value, however the key point of considering energy consumption and efficiency in total cost of ownership is well illustrated.
RADVISION will be enablingCisco’s Unified Customer Voice portal, a contact center user self service product, with video. The objective is to support video interactions with customers. Perhaps this product will be renamed soon to Unified Customer Interaction Portal :).
Research firm Frost & Sullivan has made some predictions on growth for the Unified Messaging market: Contact Centres will provide the lead, and the real trigger will be Microsoft and IBM encouraging customers to upgrade their email and Instant Messaging platforms. I agree 100%.
Another market growth observationfrom Frost & Sullivan: growth in IP Telephony is due to replacement of out-of-date equipment rather than drivers for new functionality or cost savings. This is consistent with my own observations of the market.
Nortel has provided their top 5 examples for ”hyperconnectivity” this summer (Nortel’s marketing term for staying connected to communications anywhere anytime): the office is anywhere, rural connectivity, road tripping, island hotspots and playtime. If you ask me their idea of summer is terrible. Lets leave things to “the office is anywhere”.
I often get asked “which manufacturer is best for IP Telephony and Unified Communications?”. I see this questions almost like being asked “which car is best?” … really it depends on what your requirements are, now and in the future, and on your budget. I’d be happy with a good value sports car now (because I cant afford a luxury sports car!) but that is not going to work when I get a family (my requirements will change in the future)… my retired self-made millionaire friend (if I had a friend like that!) will give you a different answer.
When considering an immediate requirement for a new corporate telephony solution it is important to also consider the Unified Communications requirements that may be needed, even if not needed immediately. A bit like my sport car annology you don’t want to out grow your purchase.
If your requirements are clear the next challenge will be determining which manufacturer and ultimately supply partner is best suited to meet them.
Manufacturer platforms change so rapidly that assessing the relative merits can be difficult. Companies such as Gartner release research on their view of the Corporate Telephony and Unified Communications landscapes. I propose that the relative positions of the manufacturers on the above charts are not too important, but understanding the differences between their solutions is key to determining which is right for your own requirements (and it may result in a combination of manufacturers - note that IBM and Microsoft do not appear in both charts for example).
If you have a good understanding of your requirements (now and in the future) and a good understanding of the available solutions then you will provide your own answer, or answers, to the question “which manufacturer is best?”.
Some highlight news items over the last fortnight in enterprise telecommunications:
