Reducing the Cost to Serve - Network & Telephony Services

About this research note: Operate & Optimize notes provide Reducing Cost-to-Serve: recommendations for effective and efficient IT practices that help Network & Telephony improve the performance or reduce the cost of technologies already Services deployed in the enterprise. Publish Date: April 13, 2009
Enterprises looking to reduce costs in the network and telephony services area can make significant headway in reducing expenses without reducing quality of service. First, determine which areas have potential for cost savings, then assess how much time is available to reach cost-reduction targets. IT can then narrow down the cost-cutting techniques at its disposal. Keep potential pitfalls in mind, and adopt the effective measures that Info-Tech recommends to avoid these traps. © 1998-2009 Info-Tech Research Group www.infotech.com
Executive Summary This research note applies the Cost-to-Serve cost management approach to identify opportunities for controlling expenses in the network and telephony services area. Coverage includes: » Guidance on when this service area is a strong cost management candidate for the organization. » Description of specific cost-reduction measures that can be achieved, according to varying time frames. » Case studies that provide real-life insight into experiences with these cost-reduction techniques. The network and telephony services area offers several concrete opportunities for both immediate and long-term expense management.
Operate & Optimize 2 Reducing Cost-to-Serve: Network & Telephony Services www.infotech.com
Introducing Cost to Serve
The Cost-to-Serve method examines the relative cost to deliver specific IT services, such as servers and storage services, end- A Practical Methodology user support services, and application maintenance services. Its ultimate goal is to directly map and forecast the impact that For step-by-step guidance on how to
changes in spending on IT services will have on the ability to leverage the Cost-to-Serve method to
achieve business strategy. reduce costs, refer to the ITA Premium research note, When activities have been categorized into services, it's much "Methodology: Reducing IT Cost-to-easier to decide which spending changes to make. Spending Serve." changes that will negatively affect business strategy are avoided, and those that will positively impact business strategy are prioritized and pursued.
Service Description Network and telephony services are comprised of two individual services described below: » Networks. Networks are comprised of the enterprise's local and wide area networks, including Internet and intranet connectivity. This includes the acquisition and maintenance of hardware for core, distribution, and access layers, as well as the contracting and monitoring of Internet service providers. » Telephony. Telephony consists of IT support for enterprise voice services and mobile devices, including cell phones and smart phones. This includes the acquisition and maintenance of PBX and IP telephony infrastructure and the management and monitoring of local, long distance, and wireless carriers.
When to Reduce a Service IT leaders should consider the following statements to further investigate whether network and telephony services offer a potential cost-cutting opportunity. » There is a vendor maintenance agreement in place for the LAN environment. » Telco and ISP bills have never been audited or have not been audited recently. » Telco and ISP contracts are automatically renewed.
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» There has been no evaluation of the enterprise's method for providing and accounting for mobile device hardware and services. » The enterprise is in line for a telephony, VoIP, or LAN refresh. » Maintenance or service contracts for networks and telephony are up for renewal. A checkmark against any one of these items suggests that IT should examine network and telephony services.
Cost Reduction Targets Deep cuts will not be singly achieved by reductions in network and telephony services expenses. However, 70% of IT leaders surveyed noted that this is a service area they will look to for cost reduction. There are many simple actions that can generate real dollar savings with litt... [download for more]