Past Entry of Zippy's Telecom Blog
November 2, 2009
Introducing the TechROI Concept
Over the years Yours Truly has been known for concocting a host of scientific and technological ideas, both plausible and far-out. Some of them were simply based on observing what was already happening in the telecom industry: For example, while at Computer Telephony magazine in 1995, I coined the term "fault-resilient computer" to describe high availability rackmount computers having "four nines" (99.95 to 99.99 percent) uptime then coming into use for computer telephony platforms instead of the more expensive and somewhat underpowered "fault tolerant computers" having at least "five nines" (99.999 percent) uptime.
My latest idea, engendered by the current economic climate, involves saving companies money.
The term I use, “Technology ROI” or just “TechROI”, is about technology that soundly and measurably saves companies money. Every business wants to save money, they want to save time, and they want to boost productivity. How can you do that these days? I’m not talking here about just buying reconditioned office equipment or counting pens and paper clips at the end of the day.
Interestingly, the best answer doesn’t come out of the business world, it comes out of the telecom world. That’s because more and more business processes are becoming communications-enabled. Gartner Group even came up with a term that has become popular, Communications-Enabled Business Processes (CEBP).
To be specific, TechROI is about: One, communications technologies that genuinely save money. Two, managing and optimizing how those technologies work together to further save money, and Three, squeezing the costs out of critical business processes by reducing human error and cutting the time it takes to complete any given business process.
Let’s look at these three parts in greater detail.
TechROI Part One: Communications Technologies That Genuinely Save Money.
In terms of communications, there are several technologies that really help any kind of company save money—things like Telecom Expense Management (TEM), which a long time ago used to entail merely checking phone bills for errors but now involves optimizing accounting, purchasing, inventory, and improving enterprise resource planning. Or SIP Trunking, where one phone system talks to another one directly over the Internet, avoiding charges on the regular phone network. That’s very hot right now. Or Open Source telephony, where you run free software on a PC and presto, you now have phone system. Or teleconferencing, collaboration and mobile unified communications. Or hosted phone services and even hosted call centers where you don’t need any equipment, facilities or staff on-premise. Then there’s cloud computing and outsourced managed computing and network infrastructure for IT apps (e.g. what Savvis does) bolstered by associated products such as application & network assurance performance (e.g. NetQoS, SevOne) so that critical infrastructure can be outsourced while retaining visibility and insight into traffic composition, network utilization, and application performance assurance.
These are all interesting, even exciting ways for a company to save money, but to be really effective these separate “pieces of the puzzle” must be coordinated in some way.
TechROI Part Two: Managing and Optimizing How Those Technologies Work Together to Further Save Money
The thing that ties it all together is the contemporary form of what is still called Telecom Expense Management, because that’s the “brains” or “orchestra conductor” of the whole thing—it saves money like the other technologies, but it’s special in that it also streamlines not just telecom-related things in a company but also impacts on non-telecom-related stuff such as Enterprise Resource Planning (ERP). That’s the second part of TechROI, and the most important, managing and optimizing how all these money-saving technologies work together. TEM is at the top of the food chain since the latest, most advanced forms of it reaches into and scrutinizes, streamlines, regulates and optimizes everything that happens in a business, with the expressed goal of saving money. Indeed, underlying TechROI is the belief that TEM is now entering a critical juncture in its evolution. It will ultimately take the lead in forming a framework for the intelligent business of the future. It’s an “umbrella” that covers and coordinates other sub-systems and communications technologies that also contribute to the supreme goals of saving money, saving time and boosting productivity — along with profits, naturally
By the way, everybody in the industry knows that TEM is an archaic term but everybody keeps using it because everybody’s been hearing it used for the past 30 or more years. In fact, the industry is littered with attempts formulating alternate (though equally lackluster) terms such as Total Telecom Cost Management, Total Communications Cost Management, Telecom Spend Management, Telecom Lifecycle Management, Communications Intelligence, and Intelligent Communications Management.
But there’s more to TechROI, a third part.
TechROI Part Three: Squeezing the Costs Out of Critical Business Processes by Reducing Human Error and Cutting the Time It Takes to Complete any Given Business Process.
After reading the first two parts, you might conclude that it’s nice that business processes are telecom-enabled, and it’s great that there’s something (TEM) that coordinates things, but a technology is only as good as the workers who wield it. Whether these communications-enabled processes involve contact centers, back office operations or work in the field, people are still the main part of each process, and people—many being the lazy, Peter Principled, bumbling practitioners of Murphy’s Law that they are on occasion—can cause both delays and human error, and that leads to inefficiency. A worker can send something to the wrong person, or send something to the right person who’s out sick and nobody notices the guy is at home with the flue for several days or whatever. Those things happen because, amazingly, many of these processes are still done manually. People input data, people print out pages, people slip pages into manila folders, put them in interoffice mail and drop them on people’s desks. Some employees actually consider themselves ‘sophisticated’ if they move from manila file folders to color file folders to keep track of things! If you ask people about automation they already have, they’ll say “Oh yeah, I can use a spreadsheet and it gets emailed from one step to the next”, which means from person-to-person. But of course that’s inefficient and prone to error. That’s only the first phase of automation.
Companies have tried boosting employee productivity with things like unified communications, but that’s only partly successful because even the most advanced interface is still just an interface—people are operating it and are making decisions themselves, which means that latency and error will still exist and unified communications never quite delivers the hard ROI that everyone expects of it.
So how can a company compensate for the inefficient human factor in these people-centric business processes? That’s the third part of TechROI, and that has to do with both communications and Business Process Automation. As the Yankee Group published in a report, “We envision that business processes will be integrated into communications processes so that communications servers actually manage and control the process itself.” Or, as Jim Burton of UC Strategies has said, “The automation of key business processes is where enterprises will find the unified communications ROI they are looking for.”
Take Interactive Intelligence, for example. They are contact center experts. They have a great contact center product called CIC. At some point they realized they could take the technology that deals with customer-agent interactions in a contact center and apply those tools to automate business processes. Their idea crystallized in the form of a product they call IPA (Interaction Process Automation), which uses contact center-style queuing and routing to streamline work processes. For example, IPA uses Presence, just like unified communications does, to figure out who’s available to help with a work assignment, and it has real-time supervisory monitoring so supervisors can see into the step of each work process. And Voice-over-IP is used so that workers can be anywhere.
Interactive Intelligence has already demonstrated how this concept reduces the time needed to process an insurance claim from three weeks to one week; it also decreased the time it takes for a sales lead to be distributed to a sales person from 28 hours to two hours; and reduced the cost (from $800 to $200) of bringing a new employee on board.
So that’s what Tech ROI is about—communications technologies that genuinely save money, managing and optimizing how those technologies work together to further save money, and squeezing the costs out of critical business processes by reducing human error and slashing the time it takes to complete a business process.
To Completely Sum Up….
One might say that “Technology ROI”—or “TechROI” as I prefer to call it—is where Telecom Expense Management (TEM) converges with Enterprise Resource Planning (ERP), Service Lifecycle Management (SLM, a proactive method of managing the internal service delivery and service support processes of a business), Communications-Enabled Business Processes (CEBP) and Communications-Based Process Automation (CBPA). TechROI has its origins in telecom management, because more and more business processes continue to become communications-enabled, making communications the “tail that wags the dog” in any organization. Ultimately, however, more and more non-telecom related Hard ROI technologies will come under the purview of Technology ROI, since they are amendable to improvement by processes that were first proved to be useful in telecom-related areas.