A variety of telecoms products exist aimed exclusively for
SMEs. As Anthony Adshead reports, SMEs are now beginning to
formulate strategies for growth based on the technology that is
appropriate and best suited to them.
Equipping an SME
with a comms infrastructure for the modern world is a tough task.
Where do you start? Technologies move so quickly that last year’s
‘next big thing’ has long since been forgotten. And SMEs are not
easily lumped together – there are businesses of all sizes in all
sectors.
Fortunately, there
is one thing working in the favour of the small company. The market
jargon calls it convergence – the tendency for data and voice
networks to be able to travel along one single network. Until a
couple of years ago it was only the early adopting enterprise-level
businesses that were able to take on these new technologies, but as
they gain a maturity and the suppliers look to expand sales outside
of the Fortune 500 companies things are trickling down to the
mid-market.
A number of
technologies – voice-over-IP (VoIP), WiFi and compression
technologies – are beginning to become affordable to the SME and in
many ways their flexibility and scalability make them extremely
suitable for the medium-sized business.
Marco Crueger,
International Sales Director for IP telephony specialist Swyx
Solutions, believes SMEs are beginning to spend on comms but
acknowledges they are careful with their budgets.
He says, “After a
period of refusing to invest in IT infrastructure SMEs will take a
more careful look into the equipment they really need. They will be
selective and research costs and features, and will not just take
the next best new technology. They will only take equipment that
will deliver a good ROI and one that has a positive and direct
effect on their business.“
Strategy
formulation
But how do you
formulate a comms strategy to be a forward-thinking SME? As with
any area of procurement, it’s all about working out the
fundamentals first.
Nick Watson, of
Cisco Systems, says, “The first thing companies should do is to
clarify their business strategy, identifying where they want to be
not only today but also tomorrow. They should then seek out a
partner who can provide trusted advice on how best their ITC
strategy can enable the business strategy; enabling them to remain
focused upon winning business.”
Watson also
advocates reconsidering how information and comms technology is
viewed. Rather than automatically classifying equipment as a fixed
asset to be written off, leasing equipment is an option that should
be considered, he says. This approach enables a more tolerant
cash-flow profile and provides the flexibility to upgrade equipment
without significant write-offs.
Avoid the
exotic
Cost emerges as a
fundamental concern to the SME. After all, they are, by definition,
smaller businesses, and need to ensure that if they reach into
their pockets they don’t want to pull too much out and become
exposed.
David Grove, SME
specialist at network equipment and solutions supplier Avaya, says
this means avoiding exotic solutions. “For SMEs, price is
important. It is, therefore, important to them that it is a
shrink-wrapped solution that can be up and running immediately,
with no small premium at the start,” he says. “The cost for
installing such technologies can be justified with the payback on
the initial return of investment, which is normally a six-month
lead time and will need to be shown.”
Assuming the ROI
calculations give the green light for implementation, many of the
present generation of networking technologies can pay back very
quickly. Take VoIP, for example. Once such a network is established
between branch offices, the company will be saving in a variety of
ways: no call charges between sites and calls can be redirected
when an employee isn’t in the office, so there will be no lost
calls from potential customers.
VoIP is a
technology that is trickling down to SMEs – likewise with sheer
bandwidth and bandwidth compression technologies. Even SMEs
bandwidth needs are increasing to levels unthinkable only a few
years ago, so the dilemma arises – go for more bandwidth or try to
squeeze more from what you have.
Network equipment
supplier 3Com is one vendor attempting to give large amounts of
bandwidth to the masses with its gigabit Ethernet technology. Bob
Honour, Solutions Marketing Manager at 3Com, says, “The cost of
upgrading to Gigabit Ethernet has dropped significantly over the
past year or so, making the technology more affordable than ever to
SMEs. If a company is already using Fast Ethernet, it is likely
that they are also using bandwidth-hungry applications so moving
onto Gigabit Ethernet would be the logical progression.
“With prices now
so reasonable (less than £25 per Gigabit port), it makes business
sense for a SME to now future-proof its network and invest in
Gigabit Ethernet switches rather than Fast Ethernet, as the
bandwidth per dollar ratio for Gigabit Ethernet is higher than that
of 10/100 switching,” he adds.
Investment
optimisation
Network
compression equipment maker Peribit says a different approach can
work: instead of paying out for extra bandwidth, why not get more
from the cabling you have? Its MSR (Molecular Sequence Reduction)
identifies repeated patterns across data flows – even where they
exist in separate applications – and sends only one instead of
multiple copies of the same data.
Rob Mustarde of
Peribit says, “Peribit’s technology was originally focused on
Fortune 500 type accounts, but we have seen a large take-up of
sales into SME companies who may have either lower speed circuits
or a smaller number of offices or indeed both. The point is this:
Peribit’s technology is actually company size and vertical market
agnostic, so if you have a Wide Area Network, then Peribit is
almost certainly a relevant technology for you to take a look at,
even if you only have one 64K circuit.”
He adds,
“Peribit’s original core function – Molecular Sequence Reduction
(MSR) – is a brilliantly simple cost-saving alternative to
upgrading WAN circuits. For a one-off capital cost a client can get
up to a 10-times increase in WAN capacity without having to order
circuit upgrades which then require annual recurring charges.”
Long-term
plan
But what of the
future? Where is comms technology for the SME sector headed in the
next few years?
Most agree that
the onward march of the converged IP voice and data network is
unstoppable. But it’s not a trivial consideration for the network
manager – the PBX is an expensive piece of kit, but it is tried and
tested and not dead yet. What is to be gained by going down the
converged route?
Well, 3Com’s Bob
Honour says that the converged model has a lot going for it. “The
business case for networked telephony is a strong one. When
compared with legacy PBXs, it has very low management and
maintenance costs. As the SME grows and expands, adding new users
to the system is a simple and straightforward process. The only
additional cost of adding a new user is that of a new handset, and
the easy-to-use browser administration tools mean that anyone who
is able to navigate their way around the Internet can easily
manager the telephony system.”
And according to
Avaya’s David Grove, the movement towards convergence will see its
‘tipping point’ in the next couple of years.
He says, “Although
the sales of converged systems to SMEs are still lower than those
of traditional PBX systems, this is going to change in the next two
years. In 2005 we expect that 54% of systems sold to SME businesses
will be either converged systems or IP-enabled PBXs, with growth in
these platforms at the expense of traditional PBX systems and
key-systems and hybrid products.”
However, Grove
makes the point that no matter what the technology, what counts for
users is what they can do with their system. As he says, you should
always ask, “What I can do? How much it will cost? And how much
will I save?” Sound advice indeed.
Cisco and
the RSPCA
The RSPCA invested
in Cisco AVVID technology and Cisco IP Telephony solutions to
increase efficiency and minimise costs at its new HQ near Horsham,
West Sussex, with the aim of maximising funds available for animal
protection and welfare.
Matt Winckless,
Technical Communications Manager at the RSPCA, said, “As a charity
we depend on the generosity of the public, so we need to make our
investments wisely. Staying with PBX would have meant building two
cabling infrastructures, investing in a massive PBX system and
installing a new wiring loom. And it would have been outdated in a
few months. The new [HQ] building has allowed us to take a leap in
IP strategy and build voice, data and video on a converged network,
to capitalise on the benefits of integrated applications. Cisco’s
IP Telephony technology was an obvious choice. It helps us maximise
the efficiency of our organisation by offering sophisticated
communication tools. We chose to put a Cisco IP Phone on every desk
because these allow people to access invaluable information at the
touch of a button.”
The top
technologies for SMEs
IP
telephony In other words, telephony on data cabling.
Businesses initially save money by eliminating multiple networking
infrastructures while making communications applications easier for
employees to use. However, IPT solutions deliver real and
measurable ROI through increased employee productivity. For
companies who want to test it before committing fully, they can run
a networked telephony system alongside their existing PBX so they
can become familiar with the technology and let the new telephony
system grow at its own pace.
WiFi Wireless networks. Justifying the costs of
wireless networking for the SME is simple: as the business grows,
the company needs a network that will continue to offer reliable
support. Wireless is the obvious solution as it does not require as
much additional infrastructure investment as a hard-wired network
extension.
Virtual
private network (VPN) A VPN provides a secure, wide area
infrastructure without requiring a large capital investment. A VPN
enables a small business to use public telecommunications
infrastructure without investing in their owned or leased lines by
creating a secure, encrypted “tunnel” between the roving employees
or branch offices and the core network.
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Click here for Part One of the SME supplement
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