In this issue

Successful Network Outsourcing Begins and Ends with Your Business Goals

The High Rewards and Low Risks of Selective Outsourcing

CIO Update: Benchmarking Helps Outsourcing Deals Stay Competitive

Why Trust Your Management Services Requirements to Avaya?

Successful Network Outsourcing Begins and Ends with Your Business Goals

A key challenge of enterprises is to find the best way to allocate human and financial resources to meet the needs of the business. Amplified by the pressures of a sluggish economy, the job of setting the organization's strategy becomes even more difficult. Now more than ever, it's critical to ensure that budget dollars are used to create new revenues or drive costs out of the business.

No business can afford to simply throw resources at a problem. Every investment must pass the toughest scrutiny, paying its way by delivering attractive return on investment (ROI) and clearly helping move the organization toward its goals.

The same rigorous standards must be applied to managing the enterprise's voice and data networks. Communications and information systems are increasingly important for organizational success. Today's business is highly dependent on its access to customers, suppliers and information. Many enterprises depend on multiple channels of communication – including voice, data and video – to conduct business.

For most enterprises, the planning, design, installation and maintenance of communications and information systems are not among their core competencies. To build such skills in house would be costly, and take employees away from focusing on the needs of the business. For a number of enterprises, one possible answer is to outsource some, or all, of their communications and information systems operations.

According to Gartner, Inc., a research and advisory firm, "When time, money or expertise is missing, selective outsourcing can enable the IT (information technology) operations group to keep IS (information systems) operations services up-to-date and efficient. If leveraged properly, several IT services can deliver high rewards."¹ As Gartner reports, "The successful exploitation of selective outsourcing can bring technology, skills and improved processes that would otherwise be difficult for an enterprise to obtain."²

Gartner also warns, however, that "Poorly conceived outsourcing decisions can bring service or operations problems and waste money."³ What defines the difference? To succeed, network management outsourcing must be based on and tied to the strategic goals of the enterprise. "Even with a successful outsourcing deal," Gartner says, "it is still important to:

• Define the deliverables
• Regularly audit results
• Integrate the services into an enterprise's workflow"⁴

Given such oversight, network management outsourcing can produce a number of benefits, including:

• Speed – Outsourcing provides quick access to the outsourcer's staff and facilities, helping to speed implementation and to avoid the delays that can accompany "do it yourself" internal development of staff and facilities.
• Flexibility – Effective outsourcers provide a range of options, from limited, specialized support to comprehensive managed services, so the enterprise can select a solution that precisely meets its needs.
• Knowledge and Experience – Quality outsource providers can bring a breadth of experience to bear on any communications problem. Though each project has its unique challenges, major outsourcers have "been there" multiple times and understand the issues thoroughly.
• Trained Staff – Outsourcing puts highly qualified people to work without requiring the enterprise to find, hire and train new employees. If the project ends, the people move on to their next assignment. There is no easier way to put the best people to work on behalf of a business.
• Facilities and Tools – Outsourcing eliminates the need for an enterprise to design, build and pay for such costly facilities as network operations centers. And experienced outsource companies may have developed their own proprietary tools to enhance network management.
• Focus – Relying on an outsource provider for operations and management support frees managers to focus on key corporate goals and objectives.

As with any allocation of resources, the decision to bring in outside help to manage key communication functions must produce competitive advantage. Only an outsourcing arrangement that demonstrably helps advance enterprise goals will succeed over the long term.

"To outsource a critical capability like communications is a strategic decision," says Barbara Echols, director of outsourcing services at Avaya. "Outsourcing should and can be proven as the best strategy to achieve the advanced capabilities, performance and cost control a company requires to meet its goals and win in the marketplace."

To use outsourcing strategically, the enterprise must adopt outsourcing as an integral part of its effort to apply its skills and resources where they provide the greatest competitive advantage. Making the right outsourcing decision requires a careful analytical approach:

• An assessment of the business environment, and the challenges the business faces
• An in-depth understanding of the organization's core competencies
• Knowledge of any gaps associated with operational needs – and how these impact the ability of the enterprise to achieve its goals
• A clear vision (shared with the outsource provider) of how outsourcing will close those gaps, backed up with timelines and milestones
• To keep the outsourcing relationship on track, a tracking plan with agreed-upon service and performance levels, regular performance audits and benchmarking against similar outsourcing agreements outside the business

The Evolving World of Business
Dramatic change in the world of business is focusing increased attention on the ability of the enterprise to communicate seamlessly with customers, suppliers and employees. Enterprises are expected to deliver accurate, timely information securely to the places where it's needed. Reliable, secure communication across multiple channels has become as essential to business success as invoices and paychecks.

Among the forces at work:

Financial Challenges An emphasis on financial results combined with a sluggish business climate is forcing enterprises to scrutinize every dollar they spend. Both expense dollars and capital for new investments are hard to find. Limited resources must be utilized where they will realize the greatest return. Enterprises are focusing new attention on how they can leverage business productivity investments – including new information and communications technology – for bottom line impact.

People Issues Staffing a company with quality employees is always difficult – particularly so for trained and experienced network management personnel. The continuing rapid changes taking place in communications and information technology make training and re-training a time-consuming and costly task.

Complexity of New Business Models
Web services are gaining strength as the internet continues to grow as a critical channel for business transactions. According to Gartner, "Consumers will go online, finally, with the number using online account management doubling by 2005."⁵ "Gartner estimates that, by 2005, 97.5 million in the US will be using e-billing and online account management."⁶ That's too large an audience – and too important a channel of communication – to ignore. Businesses able to access the required expertise, with their own staff or outside resources, are weaving the Web into their network of communications with customers, employees, and suppliers.

Customers Seek Choice in Access
Customers expect to be able to reach enterprises via multiple channels – telephone, Web site, Web chat, e-mail and fax – and expect enterprises to track and act on those multiple contacts. Enterprises that fail to include new communication channels in their customer access mix risk falling behind the competitors that provide customers a full choice of contact methods.

Tying Applications Together The integration of business applications produces real benefits for businesses. According to Gartner, "Few enterprises can escape the need to integrate internal applications if they want to develop new business processes or exploit business-to-business trading-partner management. Yet many have failed to invest seriously in developing an application-level network that provides unifying connectivity among people, application systems and devices across locations and business units. …Application integration is an enabler of innovation and underlies many of our predictions for 2002."⁷

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Continued

Posted on September 16, 2002.