No business has ever pondered how to spend more money when procuring their technology, and for companies of your size the key concern is how to cut overheads in both your IT and communications infrastructure while keeping pace with the relentless changes in technology.
The world of communications is, to use the industry terminology, converging. Your data (IT) network, with the appropriate technology upgrade, could carry all your voice communication traffic - or is that the other way around? And to maintain pace with change so that you can compete in the short and medium term, the time to upgrade your network is now. That means sourcing as much information about IP networks as possible. Yet before you can realise the potential benefits of IP and IP networks, you have to address the issue of dealing with those who will supply you with the required technology. There are lots of suppliers out there, including national providers such as BT, the reseller channel and online sources. The first choice is who you want to do business with.
Rey Geelani, Managing Director at SME specialist service provider and reseller Network Interlinks, explains what IP means for his business and yours: "For the SME considering this sort of move [to IP networks], it is generally driven by some sort of project - either taking on a second office, hot-desking or home work. Activities like these will precipitate the need for this type of technology - then they will have to consider how they go about purchasing it. SMEs tend to buy from people like us - fellow SMEs."
Network Interlinks is just one of thousands of specialist IT resellers who are keeping pace with changes in technology and will be the primary source of service for companies like yours. But is it the vendor's technology pushing the change, or the needs of the customers facilitating the push to converge?
Richard Pitt, Director of SME Solutions Group for Avaya UK and Ireland, says: "Smaller businesses need a dependable system [for voice] and a network that gives them web access and website hosting capabilities and the standard way is to build a LAN and get in as many communications devices without hassle. The most cost-effective way for them to install a network is to buy in all the capabilities (voice, data and applications hosting) without compromise.
"The SME needs to think what is happening with the technology and how this is going to evolve their business - and they need to buy in a network that is IP ready. There are three types of business: the SME that does not need IP and does not want to be ready; the SME that wants IP but cannot afford to be IP ready, and the SME that wants to and can afford to be IP ready. All three need to look where the cost savings are."
Simplify your network
Peter Crowcombe, Head of Corporate Marketing at switch and routing vendor Juniper, concurs: "At SME level, the main driver to IP networks is to simplify your network infrastructure. That means infrastructure delivering multiple application types not only on data but on voice. This is now a realistic proposition for the medium-sized enterprise, particularly as that technology is over-distributed.
"Critical to this delivery is the service provider - they have migrated their services to a single platform and can implement that service to the SME." To get the best deal on an IP network you need to look at a networking infrastructure that is reliable and provides a cost-effective return on voice communications as well as IT. "The SME wants something cheap to deploy and something that does not go down. You can control cost levels on a daily basis," Crowcombe adds.
He strongly believes that resellers should be very much on your side when it comes to discovering information about IP networks and even when buying them.
"Our largest internal element of our marketing spend is in our channel; we have to support the channel to support the SME," Crowcombe asserts.
Resellers would admit that the vendors of IP equipment have to spend a great deal of money with their resellers so that they can support properly your needs.
But there are subtle differences within the channel, says Simon Brough, NEC Product Marketing Manager at channel distributor Crane. "Over the past three years technology has moved at a rapid pace toward full IP networks, yet within this sector there are subtle differences in approach taken by each vendor.
"From this perspective, what has become clear is the variety of technologies available claiming to offer the same converged utopia. In a market where vendors promise the same result with different tools, there is bound to be confusion on the part of the purchaser. Furthermore, if you add into the mix scare tactics surrounding security and future-proofing, both of which are broadly apparent within the channel, this confusion is added to," says Brough.
Whatever your partner, you should be asking your dealer some searching questions. Have they really have kept pace with changes in technology? Can they can provide you with the solutions that the implementation of an IP network demands?
Stuart Muirhead, Sales and Marketing Director at independent service provider Trend Network Services, asserts: "Many smaller organisations may not take advantage of IP as they could, they are using IP because they just want the phone. Medium-sized companies and bigger are talking about business realignment - the whole change of a networks operational use using the infrastructure for competitive advantage."
Muirhead warns that just as SMEs did not have the necessary technology skills to realise the benefits of the IP network, neither does the channel.
He explains: "I cannot think of a reseller who can provide all three [aspects of IP network delivery] at the level that is required and charge the right price. You have good network resellers, good voice resellers and good server resellers but not one who can do all three well, and the IP network will bring together all the different applications. Ideally you would go to just the one reseller, but you have to work with other partners with the skills in a consortium approach."
The consortium approach is a key consideration when looking for the best deal in IP network procurement; if you have three suppliers to consider the chances of costs rising triples.
Mick Hegarty, General Manager for ICT in BT Business, recognises the dilemma faced by many SMEs. "Larger SMEs often want to work with networking providers who can offer breadth, scalability and confidence. Smaller SMEs want all this too, but they also prefer a local face." BT's approach to this has been to set up a reseller channel of its own called 'BT Local Business'. It has created over 80 independently owned resellers covering the whole of the UK. As Hegarty says: "They are SMEs, they think like SMEs and they act like SMEs. But they can draw on all the design, services, management and strengths of BT."
However there is a danger that you could be influenced too much in your purchasing decision by those from whom you buy. Ian Morris, founder and Joint Managing Director at distributor Equip, believes that the vast majority of SMEs moving towards an IP network are being led by their reseller.
He says: "A lot of SMEs are being made aware by the reseller about how the technology is moving forward. And from a technology point of view, this is being driven by lower costs - the demand to connect to an office and its internal storage has always existed, but has never been affordable."
Setting the levels
Getting the best deal requires a service level agreement (SLA). This means not just coping with your network breaking down - the most common post-sales service - but considering the design and implementation of your network, the pre-sale before you even get the kit shipped in. Such knowledge could be essential in setting up your deal.
Says Morris: "SME SLA agreements in this space do not exist because the SME wants a 'best endeavours' type of service. They would like the problem fixed in four hours, but they are not prepared to pay for the SLA that gives them this fix. The reseller has to be able to offer the contract they require as the SME needs that flexibility."
One cash-guzzler can be the break-fix maintenance, and the terms and conditions of this should be a key part of any SLA.
Mark Gains, Business Services Manager at IP network service provider and reseller 3Net, admits: "Many [SMEs] are looking at their network and how it aligns to their business, but there are expensive break-fix contracts that do not offer a lot of value to our clients. This can be 12 months' budget down the drain. We have to sit down with our clients and conduct an audit on what they need in the short, medium and long term. Once we have got these parameters set up we can start to draw up an SLA, including the break-fix contracts. So part of the work we do is how to move from an expensive support contract to a frugal support contract."
Gains adds: "But it is not just about what support contract you are getting, it is about return on investment (ROI) - you have to perceive what value is in your IP network. This is an opportunity to evolve the network, which could be a better return on your cash. You have found a way to make your network more responsive and more reliable; this helps your business and helps increase your revenues."
To help decrease your overheads with a streamlined IT and communications infrastructure there remains three key concerns when procuring an IP network. First, learn what IP is and why it is beneficial to your business. Second, learn how IP networks are sold and who can provide you the most dependable infrastructure and service. Third, learn how to buy, which means a comprehensive SLA agreement, hopefully covering all the answers to your current networking problems.
In the last analysis, procuring an IP networking infrastructure is all about confidence in your suppliers. As BT's Hegarty says: "SMEs look for several things in a supplier. They want confidence that the supplier has financial security, accredited engineers and ability to control the network.
"Ideally, they want breadth of services so that they can go to one place for their network, internet, devices and applications, 'one throat to choke'. And they want management services, flexibility and scalability to meet their needs as they change."
This was first published in October 2004