SmartTelephony – The costs of business communications are in steady decline

The world of Business Communications has fast become the focal point of several converging technologies that are racing to fill the worldwide need for cost efficiency and higher productivity. Piet Henning, a communications expert told delegates at a recent Smart Procurement breakfast that: “South Africa is an anomaly in that it is required to serve a large third world region with first world infrastructure and it cannot do so cost effectively because of institutionalised inefficiency’s and hopelessly outdated legislation. And all of that comes at a price! We pay the most exorbitant rates for both our fixed line and mobile telephony.”

“Which brings us to the next anomaly- SA has one of the most robust Cell Phone industries in the world and, a first world ‘rate of take- up’ by its people- about 85% of the population are connected!”

“But new technological developments in this area, specifically VOIP (voice over internet protocol) is dramatically shifting the competitive scenario within the telecoms market. Already 174 million people are using a free service called Skype to make local and international calls at no cost,” said Alan Low of Purchasing Index.

“Developments like these are driving the one thing that South Africa really needs in this market namely COMPETITION!!,”Low emphasized.

This trend lead to SmartProcurement hosting a new addition to it’s TCO short event series, viz. Smart Telephony in July. Both breakfasts, in Centurion and in Cape Town, were well attended and confirmed our premonition that it is a ‘ hot topic’ for procurement and supply management professionals and will continue to be so for the next 18-24 months.

New developments in Telephony offers many organizations the opportunity to cut costs and expenditure on a substantial scale. One large multinational with headquarters in Cape Town recently cut their ‘phone bill’ by over R800,000 ( that’s by 80%) per month, by adopting a strategy that incorporates the latest technologies available at the moment.

While telephony as a commodity group usually takes back seat to the more recognized targets for procurement expertise viz. MRO, Logistics and Stationary, the scope for real savings in communications bills is both tangible and measurable and, relates to a wide variety of options including:

– operator/ SP selection;
– equipment and technology selection;
– optimum usage of all the features of the system installed;
– customization of technology (‘s) to the organizations business needs; and
– the ( intial and ongoing) training of personnel in the uses and applications of the system( s) installed.

In short, it is a commodity group that is tailor-made for the practitioners of the principles of strategic sourcing!

Quick Wins

A quick win in this area can be achieved by utilising American Express’s specialized “Telkom payments” solution. This electronic facility takes the pain out of managing your Telkom payments with all the detailed reporting support that comes with sophisticated card technology.

The service comes with a free audit that identifies if your organisation has been overcharged for telco services rendered. A Pretoria based Educational institution has so far saved R2.4m in this way.

And believe it or not, the organization garners a straight rebate or, incentive “miles” on all those Telkom invoices in the process.

With the massive growth of the global economy over the past five years, many South African enterprises have expanded geographically. With this comes the enormous challenges of growing secure communications networks and, keeping the costs in check at the same time .

A leading law firm (in fact it is South Africa’s oldest!) underwent this same metamorphosis recently and brought on board it’s Communications and Internet SP, Storm Voice and Data, to provide the wherewithal. The jump to a Johannesburg office from two branches in Cape Town was a strategic necessity for Fairbridges, who first opened their doors for business in 1812. In outsourcing the VPN (Virual Private Network for voice and data transmission) that was successfully implemented in just under 4 months, without an exponential rise in costs, has enabled these lawyers to utilize their IT resources in other mission- critical areas.

For those of you who wish to learn more about this technical commodity group, we remind you that SmartTelephony is one of the TEN TOP COMMODITY GROUPS which will the subject matter of the upcoming SmartSourcing Conference in Centurion on the 9th and 10th October. The added advantage to attending this two day event is that the Telephony module will also deal with the drafting of the appropriate SLA’s that ensure the sustainability of savings over the life- cycle of the system installed by you.

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