Many IT managers I know are in a three-way pinch. They need to connect to their carriers' converging voice, data and network services. The CAPEX (capital expenditures) to do so is severely constrained. And then there's the $300(+/-) million OPEX (operations expenditures) question facing the average Fortune 100 company: how do you manage the complexity of telecom's myriad circuits, services, and equipment lifecycles to staunch the bleeding wound in the side of your enterprise?
All expenditures are not created equal
CAPEX contribute to extend fixed assets, and they are depreciated over an economic lifetime. You apply CAPEX when you extend the business or improve the range of services provided by the business.
Your OPEX are expenses that do not contribute to extend fixed assets and are consequently not subject to depreciation. OPEX keep the metaphorical lights on -- paying for the company's technical, administrative and commercial operations.
Ring... Ring... VoIP calling
With the encouragement of folks like Nortel, Siemens, Lucent, and Cisco, vendors and carriers are shifting to Internet Protocol (IP) solutions for routing and transmission on their voice and data networks. Or rather, make that their IP network -- singular -- as voice and data converge to run as applications sending intermingled packetized traffic down the line. Service providers tout the new open environment for application services that will bring you all sorts of whizbang next-generation services. But the main reasons are our old friends OPEX and CAPEX. IP lets carriers relieve trunk lines congested with wireless and dialup traffic and eliminate point-to-point overlay networks between central offices.
No question, this VoIP (Voice over Internet Protocol) stuff is pretty cool. It's going to make it easier to link automated call attendants to data services. Desktop Web portals will integrate calling services, directories and e-mail. Presence controls will enable telecom to follow employees across the enterprise and out into the wireless world of the mobile workforce. And you'll be offered flexible network bandwidth that routes data and voice services dynamically.
Paying the pipers without knowing the tunes?
Traditionally, telecom budgets have been a black hole. There have been countless cases in which, for example, a customer put in a disconnect order on a T1 on March 15. Come September 15, they were still paying, due to a dropped ball at the phone company. Or else the disconnect of service went through on March 16, but the customer was billed through June 15, because the phone company has a 45-day period or service level agreement to disconnect written into the contract.
With un-itemized, un-audited and/or un-reconciled bills, your IT department is at the mercy of the phone company. To illustrate my point, at one company I visited, 15 full-time employees did nothing but reconcile bills to audit overcharges and tariffs. This is not an uncommon practice. The sad thing is even when resources are committed to this needed task, they are missing the required level of detail about turn-up or disconnect service to actually reconcile billing against service delivery.
If you're not careful, you can wind up paying for hundreds of extra T1 circuits. Maybe hundreds of circuits were never used and hundreds were supposed to be disconnected but weren't. How would you know? And how would you ever explain the gross over capacity, not to mention overcharges, to your board of directors?
Time to demystify telecom for good
Let's plug our $300-million OPEX question into this frame of reference. Big companies are losing their shirts on telecom and the IP is about to hit the fan. In this brave new network world, a cable might connect to a device, or it might connect to a service. With flexible capacity and a slew of new services, some available on demand, how will your department ever keep up with service charges and equipment allocations?
Now, more than ever, we need to get a handle on telecom.
Telecom process management is a new frontier
Controlling telecom is a new frontier that offers tremendous ROI potential. Although difficult, it won't be as hard to produce results as you may think. Telecom has a lifecycle, just like data services. There's procurement, provisioning, turn up, disconnect, plus assets and contracts to track manage and maintain. Exchanges and circuits and PBX aren't that different from servers, software and cable drops. You can leverage IT service delivery process management methods and experience as well as IT service management products on the market to manage them. The best ones offer specialized tools, processes and practices designed to address telecom's particular attributes and components.
Believe me, it's going to be worth it. You'll be able to add visibility to CAPEX and OPEX. You'll be able to control costs by recovering overcharges and matching capacity to actual demand. So tame your telecom and navigate your way out of the convergence triangle with confidence.
Greg Lenox, an expert in the processes, methods and practices of IT operations for customer support, help desk, asset management, inventory management, telecommunications management and change management, is president and CEO of Entuition Inc., a maker of operations management solutions in the infrastructure logistics marketplace. At Entuition and in previous positions, he led several major re-engineering projects. His clients included SunTrust Banks, Citibank, Target, GlaxoSmithKline, Baxter Healthcare, Nations Bank, Wachovia Bank, First Union Bank, BB&T, CCNB, CNA Insurance and others.