The following is the 3rd addition of a multi part series detailing a company’s original voice and data setup and their eventual move to Multi Protocol Label Switching and SIP.
An I.T. Director has been assigned the duty to reduce newly acquired XYZ Company’s telecom spend by 35%.
The I.T. Director explored the possibility of conducting an RFP to reduce the costs of all the company’s existing services. The rates the company was paying were above market rates, especially for a company with that amount of service in place.
The problem with taking that approach is the company would be left with legacy services, for the length of a new contract term, that wouldn’t allow the company to operate at peak efficiency.
The company was operating their Point of Sale over traditional phone lines. All their locations were operating independently; each store had it’s own phone and internet sources. Basically there were 500 points of entry into the chain’s network. 472 locations are utilizing PRI technology, which required ordering trunk lines in increments of 23.
The company had 481 PRI’s, with a total of 11,063 voice channels. They had over 1700 POTS lines; many were in place to support an old fashioned POS system. This is the definition of overkill. Even if the Director could negotiate rates 30% less than what they’re currently paying, they’d still have twice as many lines and channels than they needed. If the Director attempted to convert PRI’s to POTS lines, he might be able to reduce the number of PRI’s but wouldn’t be able to reduce the total cost; because at ten or more POTS lines, he’d be approaching the cost of a PRI.
The company required multiple regional and distribution offices, because all the locations were operating independently. Sales and inventory data wasn’t accumulated in real time, so the company had to reduce the distance between the stores and inventory.
The Director came up with a plan that was going to bring XYZ up to date technology wise and make much better use of the company’s size and resources. His plan would come close to achieving his company’s savings mandate, while significantly improving its operation. It would be a major undertaking and would require approval from the company’s top executives. If everything went his way, he had a bright future at All American Conglomerate. If things didn’t go so well, he might be looking for a new job.