MAXIMIZING TELECOM AND NETWORK OPTIMIZATION The current state of enterprise optimization, best practices and considerations for improvement AOTMP.com The Next Evolution of Telecom Management
OVERVIEW As defined by AOTMP s Efficiency First Framework, optimization is defined as the practice of improving service-to-cost performance and right-sizing service capacity based on dynamic business needs. Although many organizations consider invoice auditing an optimization activity, it is simply the identification of invoice errors in an attempt to recover costs and is not an optimization activity. The practice of optimization goes much deeper than this. There are many activities a company could perform that fall under the umbrella of optimization. Many organizations have difficulty understanding where to start, particularly within the arena of fixed / wireline telecom assets and services. The table below outlines the core activities organizations should be performing as outlined within the Efficiency First Framework to maximize optimization potential. This whitepaper serves to identify the current state of enterprise optimization practices and provide best practices and considerations for improving the overall process. ACTIVITY FIXED / WIRELINE MOBILE / WIRELESS Eliminate unused / underutilized services Capacity optimization Technology upgrades / replacements Utilization monitoring (fixed network / systems) Utilization monitoring (mobile and wireless network / systems) Rate plan optimization (mobile) Pooled plan capacity optimization (mobile) Voice service optimization (fixed) Data service optimization (fixed) Optimization quality control and quality assurance practices 2
CURRENT STATE OF ENTERPRISE OPTIMIZATION The key to an optimal telecom optimization process is having clear visibility into the organization s telecom environment. Knowing what you have, who is using it, where it is located and how it is being used provides detailed insight to uncover significant optimization opportunities. The graphic below illustrates the activities organizations that have an optimization practice are performing today. Eliminating unused / underutilized services, which primarily involves identifying zero-use circuits and devices, is being performed by every organization. The key to this activity is to understand how each circuit or device is being used. For example, a POTS line may show zero-usage for several months and on the surface, appear to be a candidate for disconnection. However, this circuit may actually be an emergency line that is rarely used, thus disconnection would not be warranted. Which Optimization Sub-Activities Are You Performing? Eliminate unused / underutilized services 100% Technology upgrades / replacements Rate plan optimization (mobile / wireless) Voice service optimization (fixed / wireline) Pooled plan optimization (mobile / wireless) Utilization monitoring (mobile / wireless) Capacity optimization Utilization monitoring (fixed / wireline) Data service optimization (fixed / wireline) Optimization quality control / assurance 83% 67% 61% 61% 61% 61% 44% 39% 28% 0 20% 40% 60% 80% 100% 3
When establishing a telecom optimization practice, the organization must decide how often to perform each activity. Optimization cycles that are performed too frequently may yield limited results for the time and effort invested. If optimizations are initiated on an infrequent basis, the organization may be leaving dollars on the table had the activities been performed earlier. Generally speaking, fixed / wireline optimizations should be performed on a semi-annual or annual basis. How Frequently Are You Performing Fixed / Wireline Optimizations? Monthly Quarterly Twice a Year Annually No Standard Frequency Optimization quality control / assurance 33% 11% 11% 44% Data service optimization Utilization monitoring Voice service optimization Capacity optimization Technology upgrades / replacements Eliminate unused / underutilized services 0 10% 30% 20% 40% 46% 23% 8% 23% 8% 15% 31% 23% 23% 26% 28% 10% 9% 27% 15% 16% 31% 38% 14% 36% 7% 14% 29% 20% 40% 60% 80% 100% Most organizations will associate the activity of optimization with the mobile environment. In addition, AOTMP research indicates that more optimizations are taking place within the mobility arena, as compared to the fixed / wireline environment. A majority of mobile optimizations should take place on a quarterly basis to yield the best results. In addition, quality control and assurance procedures should be put in place to ensure optimizations are having the desired results, and processes should be updated on a continuous basis. Monthly How Frequently Are You Performing Mobile / Wireless Optimizations? Quarterly Optimization quality control / assurance Pooled plan optimization Utilization monitoring Rate plan optimization Capacity optimization Technology upgrades / replacements Eliminate unused / underutilized services Twice a Year 0 Annually No Standard Frequency 20% 10% 20% 10% 40% 27% 27% 13% 13% 20% 53% 13% 8% 13% 13% 40% 20% 13% 13% 14% 23% 23% 15% 8% 31% 40% 23% 40% 40% 27% 7% 7% 19% 20% 40% 60% 80% 100% 4
Once optimization activities have been performed and opportunities have been identified, the next steps in the process include approval and implementation. A review of the recommendations is necessary to ensure unintended consequences are avoided, such as disconnecting a circuit or device that is still needed. Recommendations that are approved then need to be facilitated with the carrier. Based upon AOTMP research, fixed / wireline optimization opportunities are more frequently implemented compared to mobile wireless. Percentage of Total Implemented Optimization Recommendations Fixed / Wireline Mobile / Wireless 94% 77% If optimization recommendations are not approved, those performing the activity should understand the reasons behind the decisions. This will ensure time and effort is not spent identifying potential opportunities that will eventually be declined. 5
PROCESS DOCUMENTATION IS CRITICAL As with any telecom management activity, documenting optimization processes and procedures is essential to drive efficiency and ensure steps within workflow are being followed. It also helps to identify issues or bottlenecks within the process and promote a continuous improvement methodology. Unfortunately, process documentation is not being performed consistently today across enterprise environments, based on AOTMP s research shown in the graphic below. Which Optimization Sub-Activities Have Documented Processes? Technology upgrades / replacements 53% Eliminate unused / underutilized services Pooled plan optimization (mobile / wireless) Utilization monitoring (mobile / wireless) Rate plan optimization (mobile / wireless) Capacity optimization Data service optimization (fixed / wireline) Utilization monitoring (fixed / wireline) Voice service optimization (fixed / wireline) Optimization quality control / assurance 53% 43% 43% 43% 33% 30% 30% 23% 20% 0 20 40 60 80 100 Key areas that should be documented within the optimization process include: Standard list of all optimizations that will be performed Standard frequency for each optimization performed Who is responsible for performing optimizations? Who is responsible for approving optimizations? Who is responsible for implementing approved optimizations? List of optimization opportunities that can be automatically approved Quality control / assurance checks 6
CONCLUSION Optimization potential is present across every telecom environment; therefore establishing a telecom optimization practice is essential to drive financial, operational and technical efficiency. In fact, based upon AOTMP research, a relatively similar percentage of organizations indicate the greatest optimization opportunity in the future resides within the fixed and mobile environment. Which Area Has The Greatest Optimization Opportunity For Your Organization? 44% 56% Mobile / Wireless Fixed / Wireline Telecom environments constantly change and new technology continues to be introduced. Maintaining visibility into the fixed and mobile environment, along with an effective and efficient optimization practice, will ensure the organization has maximized telecom s potential. 7
EFFICIENCY FIRST BEST PRACTICES FOR OPTIMIZATION Efficiency First Framework Core Activity Optimization Underlying Principle: The practice of improving service-to-cost performance and right-sizing service capacity based on dynamic business needs Sub-activities that align to the Efficiency First Framework Eliminate unused / underutilized services Capacity optimization Technology upgrades / replacements Utilization monitoring (fixed / wireline networks and systems) Utilization monitoring (mobile / wireless networks and systems) Rate plan optimization (mobile / wireless services) Pooled plan capacity optimization (mobile / wireless services) Voice service optimization (fixed / wireline services) Data service optimization (fixed / wireline services) Optimization quality control and quality assurance practices Efficiency First Focus Area Evaluation and Best Practice Objectives for Optimization Processes: standardize methods and workflow for optimizing serviceto-cost performance Structure: organize optimization staff for effective and efficient best practice execution Skills: improve the performance and productivity of the people performing optimization activities Technology: achieve maximum efficiency from systems used to optimize the telecom environment Services: improve capacity and price performance of fixed and mobile services Assets: improve utilization and price performance of fixed and mobile endpoints, devices and equipment 8
Costs: optimize service and asset total cost of ownership against dynamic business requirements Vendors: leverage vendor solutions and options to achieve peak optimization objectives; evaluate vendors on performance results Information: leverage fixed and mobile telecom environment data to improve performance and identify opportunities for improvement Business: align optimization activities to support strategic telecom and business objectives Other Optimization Considerations Establish Structured Approval Procedures Identify who will be responsible for approving optimization recommendations Identify types of optimization recommendations that can be automatically approved to expedite the process Improve Carrier Contract Negotiations Identifying areas for optimization will help you negotiate better terms within carrier contracts to provide more cost savings Technology Migrations Optimization efforts will identify areas for potential technology enhancements Examples: PSTN to IP-Based Networks, WiFi installation vs. mobile data for central end user areas, etc. Optimization Recommendation Output: Review Procurement Process Flows Reoccurring optimization findings are typically due to poor processes within an environment s procurement efforts Reviewing the processes associated to this output is vital to an efficient environment 9
ENVIRONMENT ASSESSMENT Gain Visibility Across Your Telecom Environment An Environment Assessment is a comprehensive report that identifies inefficiencies and provides a gap analysis against the principles of the Efficiency First Framework along with prioritized recommendations to improve performance, efficiency, and productivity in the telecom environment to drive business results. In an industry that is lacking discipline and structure, AOTMP partners with your organization to drive measurable results aligned to business goals and objectives by utilizing the Efficiency First Framework methodology. Baseline Performance Comparison $1200 $900 $600 $300 $0 $1,234 ABC Company (Current State) Industry Peers Telecom Cost per Employee $526 $659 $422 Average Across 24 Industries ABC Company (Future State) Identified opportunities for immediate impact and sustainable results Disciplined methodology provides governance and structure to produce trusted outcomes Engagement establishes a baseline from which a consistent telecom management methodology may be utilized in the future Standard metrics quantify opportunities for financial, technical and operational efficiency gains Action plan in alignment with business strategy Speed to discovery of recommendations Increased value of telecom as a strategic asset Report valuable to stakeholders from C-Suite to practitioner Contact AOTMP to Speak with a Telecom Management Expert +1.800.860.8608 info@aotmp.com aotmp.com Live chat on our website Monday Friday 8 am 5 pm ET 10
DRIVING THE FUTURE OF THE TELECOM MANAGEMENT INDUSTRY AOTMP is an information services company focused on establishing and maintaining high-performance, best-in-class fixed and mobile telecom environments. Partnering with enterprises and public sector organizations and their telecom vendors, AOTMP uses information, analytics and the Efficiency First Framework to drive efficiency, performance and productivity while significantly reducing costs. The Efficiency First Framework is a disciplined, best practice-driven approach to managing fixed and mobile telecom environments. Adoption of the Efficiency First Framework by an organization and alignment to the Framework by their telecom vendors allows organizations to take their telecom environment to a new level of performance far beyond standard auditing and telecom expense management programs to create sustainable, predictable short-term impact and long-term results. Adoption continues to create value is it evolves the telecom environment from an operating expense into a strategic asset that is used to drive business results. Business and performance results are measured and monitored far beyond cost savings with Efficiency First Ratings, the Efficiency First Performance Index and certifications for the organization, its employees and telecom vendors who support the organization. Organizations are measured in order to understand how they are performing today and what they need to improve to meet telecom management industry standards in all key areas outlined in the Efficiency First Framework. Throughout the process, organizations work towards becoming Efficiency First Certified. Certifications indicate quality, efficiency, performance and value to stakeholders, customers and the individuals who support the environment internally or through a telecom vendor. AOTMP s clients represent $24+ billion in annual telecom spend and include 100+ of the Fortune 500, small and medium businesses, public sector organizations and industry suppliers. Interested in Learning How AOTMP Can Benefit Your Organization? +1.800.860.8608 info@aotmp.com aotmp.com Live chat on our website Monday Friday 8 am 5 pm ET 7835 Woodland Dr., Suite 250 Indianapolis IN 46278 11