The following is the 4th addition of a multi part series detailing a company’s original voice and data setup and their eventual move to MPLS and SIP.
An I.T. Director has been assigned the task of reducing newly acquired XYZ Company’s telecom spend by 35%.
The Director has decided to implement a companywide Multi Protocol Label Switching network, utilizing SIP trunks and an IP phone system.
By utilizing SIP, the Director was able to reduce the number of voice channels for the enterprise by approximately half. All the chain’s locations will have access to the SIP trunks by utilizing remote DID’s (RDID) over the MPLS network so the company can experience true economies of scale. The quality of the voice communication will be high because MPLS offers Quality of Service and Class of Service, so voice communication and other real time traffic can be given priority over traditional data traffic while jitter and latency are kept in check.
The Director had a 300 Mbps Multi Protocol Label Switching port installed at their corporate host location on a GigE loop, so the bandwidth could be easily upgraded if needed. The carrier could upgrade the circuit within a week, which would allow the company to react quickly should the traffic patterns change due to the growth and expansion of their business. That amount of bandwidth was chosen because all of their locations were aggregating at the host. They also installed a 300 Mbps internet connection at the host, also on a GigE loop. Due to the critical nature of these connections, they were built with fiber optic local loop redundancy (Self Healing Alternate Route Protection) so that in the event of a failure or fiber cut the services would remain active.
Because the company had a centralized internet access connection, they’d be able to control what websites their employees could access and better prevent outside threats to their network. This simplified the management of the network. Instead of hundreds of entry points, requiring hundreds of routers running firewalls and VPN’s, everything was centralized at the hose site.
The company chose Riverbed devices to accelerate applications, optimize their bandwidth, and facilitate data backup and network management by improving their visibility of the network.
XYZ Company could conduct Point of Sale (POS) on their private network, so sales statistics were tabulated in real time, speeding up inventory and supply chain management. If an item was in high demand in a given area, they could proactively ship more of those items to meet the demand.
The company reduced their long distance by 1/3 by eliminating intra company long distance calling. Any call on their network was now a free call and employees didn’t need to dial ten-digit phone numbers, even when the calls were going out of state.
XYZ added a data center to their network for remote data storage back up and to host their intranet and internet websites. An alternative MPLS and back up internet connection was also installed at the data center in order to take advantage of the full-mesh capabilities of MPLS. That way, in the unlikely outage at their main corporate site, services to the stores would still operate. From the data center, they also installed a 100 Mbps Ethernet Private Line Circuit to their corporate host location to ensure connectivity to the back up data center in the event of an outage on the primary MPLS circuit.
MPLS and SIP allowed the company to centralize their operations which enabled them to reduce the number of distribution centers by half and close all of the regional offices. With a more advanced Point of Sale (POS) system in place they were able to identify the less profitable stores and close them. XYZ reduced their locations from 500 to 436.
Because the company moved the majority of their service to one provider they were able to negotiate below market rates and a favorable revenue commitment, which allowed them future flexibility.
By transitioning to Multi Protocol Label Switching, SIP the back up data center, along with the reduction of services and offices, the Director reduced the company’s monthly telecom spend by 34%. Even factoring in the cost of the new phone and routing equipment their monthly savings exceeded 30%.
If you are considering a similar transition for your company and want to some expert guidance, call CarrierBid today or complete the form on the right side of this page.