Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
dŚĞ��ǀŽůƵƟŽŶ�ŽĨ��ŽŵŵƵŶŝĐĂƟŽŶƐ�>ŝĨĞĐLJĐůĞ�DĂŶĂŐĞŵĞŶƚ
ŝŶ�ĐŽŶũƵŶĐƟŽŶ�ǁŝƚŚ
Copyright © 2015 Blue Hill Research Page 1
ANALYST INSIGHT
The Evolution of Communications Lifecycle Management
Published: June 2015
Analyst: Hyoun Park, Chief Research Officer
What You Need To Know
Communications Lifecycle Management is a necessary evolution of telecom
expense management that addresses the financial, technical, and
compliance issues associated with the billing, device management, and
support challenges in an increasingly connected world. This practice has
evolved over the past decade as enterprise communications have
transformed from basic landline circuit and pager inventories to a wide
variety of smartphones, tablets, sensors, SIM cards, apps, and automated
services. As communications have evolved, the challenge of full lifecycle
management has greatly changed as well. To avoid an approach that will
quickly become outdated, it is imperative that telecom, mobility, and IT
managers tasked with enterprise communications take a future-facing view
of Communications Lifecycle Management that takes into account both the
basics of today’s IT world and the very near-future of apps, portable
computing, and wearable computing. Blue Hill proposes a framework
involving financial, technical, and compliance roles working together to
ensure that technology and service lifecycle investments are both
best-of-breed and well-integrated with the company’s core goals.
Telecom Transforms into Enterprise Communications
Communications Lifecycle Management has its roots in the world of Telecom Expense Management, a
software industry that first started to appear over two decades ago when software entrepreneurs first
discovered that they could greatly automate telecom invoice auditing by bringing this data into a
relational database and checking for errors. Over time, these vendors also took over tasks such as invoice
processing, contract negotiations, service orders, and carrier disputes to fully manage all of the aspects
associated with telecom expense. This telecom expense capability required both personnel and software
that were specialized in the world of telecom, including Universal Service Order Codes (USOCs), Feature
IDs (FIDs), and Network Interface Devices (NIDs), to ensure that enterprise telecom service orders were
AT A GLANCE
Business Challenges
To manage telecom, mobility, apps, and the next generation of wearables and the Internet of Things, companies must evolve existing telecom management capabilities to support the future of enterprise communications.
Solutions
By aligning lifecycle technologies and goals across a variety of communications technologies, companies can effectively take a new Communications Lifecycle Management approach to their holistic technology environments
Benefits
Successful CLM practitioners can effectively reduce direct communications costs by 15% or more while simultaneously reducing the in-house labor needed to conduct low-value work such as processing invoices and placing service orders.
Report Number: A0159
Share This Report
Copyright © 2015 Blue Hill Research Page 2
ANALYST INSIGHT
placed correctly, billed to meet complex contract terms, and properly disputed when service issues came into play. This challenge of fully managing both the corporate Wide Area Network (WAN) and individual circuits for branch locations was challenging in and of itself. But for the first couple of decades of telecom expense management, the key challenge was to manage landline circuits: a challenge that continues to have its own unique foibles.
However, in the mid-2000s, the emergence of enterprise mobility completely changed this initial paradigm of telecom expense management. Although today’s world of mobility is driven by the iPhone
and Android devices, the initial push for wireless expense management came from the Blackberrys, Treos, and Sidekicks that first brought messaging and email into the hands of the enterprise masses. With the emergence of mobile phones that could go anywhere and be used across borders, a new set of challenges came into play, including the high cost of international roaming and the addictive nature of texting. In addition, as employees assigned with Blackberrys started to leave the company, these devices often were misplaced or lost during the employee exit. Because of this, a league of “zombie phones,”
phones without active use, started to pile up in organizations leading to an increasingly growing monthly cost that was not assigned to business value. These challenges were only exacerbated by a mobile billing system that was constantly changing as carriers came up with gimmick after gimmick to reduce costs and provide discounts through a variety of rate pools, incentives, and partnerships intended to maintain client loyalty, but often resulting in even greater confusion.
The most recent wave of complexity for mobility came from Apple in the late 2000s, but not from the source that many would originally think. Although the iPhone was an immediate hit when it first launched, this device originally had little to no impact on the enterprise world simply because enterprises were not allowed to purchase the device en masse through corporate procurement. Because the iPhone could originally only be ordered on an individual level, businesses were basically forced to ignore the iPhone. However, the great game changer for enterprise mobility came from the development of the iOS apps and app store. Suddenly, the phone was now a destination for a variety of software tools ranging from entertainment to productivity. To fully manage these apps, the mobility expense manager now had to think about software deployment and licensing issues previously limited to desktop and server computing.
These challenges bring us to the present, where enterprise mobility is now a given in the vast majority of enterprises and nearly every employee is using at least one work-related app, even if it is as simple as email. But, just as enterprises have started to gain control of mobility and mobile apps, a new challenge is emerging in the horizon. With the integration of accelerometers and a variety of radios including NFC (Near-Field Communications), Bluetooth, and GPS (Global Positioning Satellite) into smartphone chip sets, the smart device has become a complex set of sensors capable of independently interacting with the outside world. These sensors and capabilities are also becoming decoupled to create a variety of smart meters and monitors often inelegantly called the “Internet of Things” as well as a variety of wearable
Copyright © 2015 Blue Hill Research Page 3
ANALYST INSIGHT
devices ranging from the ill-fated Google Glass to the potentially less ill-fated Apple Watch. All of these
new devices will require both the existing capabilities to manage apps and data streams and the
additional ability to track a quantity of devices that is yet another order of magnitude greater than
today’s enterprise environment from a financial, technical, and compliance perspective.
All this is to say that enterprises have to think about their Communications Lifecycle Management
approach carefully, since a poor approach will quickly become outdated as companies seek to make more
nuanced and complicated decisions on the devices, apps, sensors, and networks they want to use. To
futureproof CLM, companies must have billing, device, usage, support, and contract management
capabilities in place that account for the very near future where wearable technologies, WhatsApp, and
the Internet of Everything will quickly become part of every business environment. Otherwise, the next
wave of applications, sensors, watches, bracelets, and other technologies used to support key business
tasks will quickly overwhelm the corporate capability to effectively manage and govern these assets and
services.
The Multi-Channel Approach to CLM
Based on the standard lifecycle of Communications Lifecycle Management, Blue Hill recommends an
nine-step cycle of management tasks necessary to support the communications environment.
• Inventory Optimization, to track all hardware, software, maintenance, services, and contingent
labor associated with each category of enterprise communications
• Sourcing & Contract Negotiation with procurement skill sets that are specialized for the unique
complex spend management category associated with enterprise communications
• Device, Apps, & Service Fulfillment to ensure that employees actually received the devices,
services, and documents that they have been promised
• Invoice Processing to handle the combination of paper, EDI, and non-standard electronic bill
formats that exist across all aspects of telecom, mobility, and apps.
• Chargeback Reporting to accurately charge back costs in a shared services model and provide
visibility to end users utilizing IT services.
• Contract Enforcement and Disputes, which focus on finding egregious billing errors and
walking through the morass of billing disputes to regain corporate funds
Copyright © 2015 Blue Hill Research Page 4
ANALYST INSIGHT
• Portfolio Optimization is a more strategic action where companies consider the optimal
purchase of Best-in-Breed devices, usage, apps, and services to support corporate productivity,
minimize downtime, and maximize collaboration and innovation.
• Carrier Optimization is a more tactical action that allows companies to increase the scope and
reach of their communications portfolio to all employees while minimizing costs and providing
legitimate switching threats to incumbent providers that may be resting on their laurels
• Device and Service Retirement is possibly the most important step from a compliance
perspective, as this allows companies to ensure that data at rest remains within the organization.
In addition, organizations may also gain some incremental benefit by redeploying or recycling
devices, licenses, and other services.
Figure 1: Setting the Stage for CLM
Source: Blue Hill Research, June 2015
Although this generalized CLM lifecycle seems to be fairly straightforward, nuances start to appear as
companies consider some of the key challenges between landline, mobile devices and usage, mobile and
web-based apps, and the emerging world of wearable “things.” The complexity associated with
managing all of these various challenges ends up driving the need either for dedicated software or
services to help companies to effectively deal with the logistical concerns of managing what seems to be a
basic workflow.
Copyright © 2015 Blue Hill Research Page 5
ANALYST INSIGHT
The Key Benefits of Communications Lifecycle Management
Blue Hill believes that to fully optimize the hard cost savings associated with best practices in CLM,
enterprises must fulfill a set of nine intermediate goals that are aligned to the nine management tasks:
• Informed negotiation, where sourcing and procurement negotiators are using a fully
contextualized and factually accurate foundation of information to support requests, discounting,
terms, and service level agreements.
• Cost-effective sourcing occurs when companies are secure in the knowledge that they are not
either hurting their own P/L or the corporate bottom line as they purchase necessary
communications hardware, software, and services.
• Optimized SLA (Service Level Agreement) enforcement is only possible when enterprises have
a closed loop for aligning service orders with delivery.
• Line-Item Price Audits allow enterprises to check each feature, usage line item, or app to ensure
that each invoiced item matches all contracted discounts and negotiated prices. Contract
negotiations end up being useless if they are not fully enforced.
• End-User Visibility provides the important opportunity for the actual users and P/L managers
to look at invoiced usage and compare to their own internal departmental rules. By giving
employees an understanding of how much their phone bills cost the company, CLM managers
can drive down costs simply by either educating or penalizing those who are using more than
their fair share.
• Contract Compliance ensures that every observed infraction ends up being used either to
provide credits to the enterprise, or to provide leverage for the next round of contract
negotiations. But without the muscle to follow up on service and pricing errors, visibility only
shows whether a vendor or service provider is doing a good job or not.
• Cross-Carrier Shopping requires organizations to both have knowledge of the competitive set of
providers and services for a specific functionality and the willingness (or perceived willingness)
to comparison shop. By understanding the options for service across various providers,
including the varied names that can often be used to describe similar services in emerging
technology markets, enterprises can get the upper hand on their carriers.
• Cost and Governance Optimization can only occur when technology services and service
providers are aligned to the strategic, geographical, and collaborative needs of the organization.
Copyright © 2015 Blue Hill Research Page 6
ANALYST INSIGHT
• Long-Term Strategy allows companies to replace and refresh devices, apps, and services based
on the stated line-of-business need for communications technologies, rather than on an ad-hoc
request to use a specific app or services that is poorly vetted or poorly able to scale to
enterprise-grade services.
Figure 2: The Intermediate Goals of CLM
Source: Blue Hill Research, June 2015
Given the challenges of CLM, Blue Hill believes it is only fair to mention the actual benefits of CLM as
well, based on estimates that align with the experiences of variety of IT and telecom departments
interviewed by Blue Hill analysts. When CLM is done correctly, companies typically see savings in the
10-25% range compared to communications environments that are either managed by spreadsheet or not
managed at all. (Note that this is a slight decline from telecom expense management reports written in
the late 2000s, as telecom billing has become slightly more accurate and enterprises have become more
aware of the leakages in telecom, mobility, and mobile app spend.)
Copyright © 2015 Blue Hill Research Page 7
ANALYST INSIGHT
In addition, CLM as a managed service typically allows organizations to gain 1
FTE (Full-Time Equivalent) of labor for each 1,000 mobile devices or 2,000
circuits and lines managed when help desk, invoice processing, line-item
audits, service orders, payments, and billing disputes are considered. This can
provide an estimated savings of an additional three to ten percent of the
communications invoices. With this level of savings, there is no excuse for any
enterprise telecom, mobility, or communications expense environment to be
unmanaged. Blue Hill typically finds that the key initial hurdle for companies
to shift to a formal CLM approach is the ability to identify hard savings, and
recommends looking both at direct telco costs and support costs as the most
immediate opportunities for cost reduction.
To formalize the CLM approach, enablers and goals must be fully aligned by bringing the appropriate
technologies, skill sets, and services together to ensure that each process leads to the appropriate goal. By
achieving this alignment, CLM becomes a continuous cycle of improvement from month-to-month and
as CLM expands from its telecom roots to a management system for every app, device, and sensor.
Figure 3: Aligning Goals and Workflows in CLM
Source: Blue Hill Research, June 2015
FTE REALIGNMENT
In practice, organizations rarely let go of personnel after implementing CLM, instead preferring to reallocate these cost-savvy employees to higher-value IT procurement, mobile or WAN strategy, or project management roles that take advantage of the multi-tasking and enterprise-wide visibility that these CLM managers have gained over time.
Copyright © 2015 Blue Hill Research Page 8
ANALYST INSIGHT
As one can see by bringing Figure 1 and Figure 2 together, CLM is an integrated cycle of tasks and goals
where each key task leads directly to an important goal. By focusing on excellence on each task,
organizations can also maximize benefits throughout the lifecycle.
For instance, starting at the top, as companies achieve 100% visibility into inventory, procurement will be
able to negotiate discounts and savings with increased strength. Better sourcing and contract negotiation
capabilities will ensure that corporate orders are cost-optimized. Improved device, asset, and service
fulfillment will result in achieving key service levels that internal customers and employees expect from
their IT departments. Each task is not just an academic or obligatory exercise, but a core function with an
immediate goal that will improve the company’s sourcing, support, governance, or technology roadmap
over time.
With CLM, these benchmarks tend to be fairly straightforward: Telecom and wireless spend tend to be
around 0.5% of revenue in a multi-location business, give or take, meaning that it would not be unusual
for a billion-dollar business to spend $5 million per year, or about $400,000 per month, on
communications. In an environment that has not been audited or tightly managed on a line-item basis,
Blue Hill believes these companies are typically leaving a million dollars a year on the table through lack
of optimization. These billing gaps typically come from three different areas:
Basic errors. On an annual basis, companies can expect to see between one and two percent error on
annual spend. Going back to our hypothetical billion dollar company, this means that $50,000 to $100,000
of the bill each year is simply wrong: circuits and cell phones that belong to another company; services
that should have been shut off, but never were; services that are provided once and billed two or three
times to the company on multiple bills.
Obsolete services. Is your organization still paying legacy rates for ISDN services, or for a limited cell
phone plan that still charges for individual texts? Chances are that if your hypothetical billion-dollar
company has about 3500 employees and 60 locations (or if you’re a multi-location retail business, closer
to 15,000 employees and 1,000 locations), it is also juggling multiple communications services per
employee or location. In those five to ten thousand line items, there will be a number of outdated services,
which will likely lead to another opportunity to save another $100,000.
Rate plan and usage optimization. Although this action seems simple, telecom and communications
procurement managers spend too much time focusing on the discounts that they negotiate, and not
enough time on what they’re actually buying. If the base service is 50% more expensive than it should be,
a two percent additional discount is not making a big difference. With this ever-changing panoply of
options that carriers provide, there is always an opportunity to reallocate usage into proper rate plans
and usage buckets. Between wireless usage plans and comparative circuit pricing exercises, this area
typically provides the greatest savings.
Copyright © 2015 Blue Hill Research Page 9
ANALYST INSIGHT
It Takes a Team to Optimize CLM
Although it is tempting to state that CLM should just be done by an IT manager, the truth is that
successful implementations typically require a combination of procurement, finance, and technological
stakeholders to implement. To understand why, consider the benefits that each role gains from CLM.
Procurement managers can enter negotiations from a position of strength in understanding the
company’s full breadth and variety of spend. To paraphrase W. Edwards Deming, you can’t discount
what you can’t manage. In addition, by having visibility to inventories and utilization patterns across all
of the potential communications services used within the organization, procurement and finance can
work together to see which communications are most cost-effective in supporting collaboration.
Compliance and security managers are tasked with the increasingly challenging task of controlling
corporate data across every endpoint. As every device starts to become a networked computer, the
logistical task of managing computing assets becomes increasingly difficult. One of the easiest ways to
aid these managers is to track all computing assets from the moment that they are sourced into the
corporate environment.
Information Technology managers are increasingly asked to make complex tradeoffs between hardware,
cloud, software, services, and APIs used to support standalone and embedded communications
technologies. Through CLM, IT managers can fully govern their inventory of devices, apps, and services,
and have visibility to the communications technologies that employees expect to be supported. Rather
than simply assume that employees are using the phone system or corporate-provided apps that are
standard issue, companies can take a deeper look at the apps and services that have also been purchased
through corporate channels. The end result is that IT is better positioned to manage support expectations,
control user uptime, improve satisfaction for internal customers (otherwise known as internal
employees), properly benchmark consistent or expected usage, and gain visibility across multiple
carriers.
Line-of-Business Users: With the emergence of the Internet of Things, wearable technologies, and
Software-as-a-Service transactions, businesses are going to have to keep track of all of these assets and
services as they transform. Much as sales and marketing departments have had to learn about analytics
and business intelligence to manage their data, these top-line departments will also have to learn how to
manage the sensors, customer data sources, and wearable devices that are increasingly going to drive
greater insight and new monetizable paths. Rather than reinvent the wheel, line-of-business departments
need to prepare for shifts to subscription services and the Internet of Things by looking at systems like
Communications Lifecycle Management, that have already tracked a variety of mobile devices, services,
and apps over the past decade, as a starting point for managing this new mobile ecosystem.
Copyright © 2015 Blue Hill Research Page 10
ANALYST INSIGHT
Key Traits for CLM Implementation
CLM requires companies to think about multiple value propositions, including compliance, expense,
support, and the technology supply chain. To ensure that the implementation is done quickly and
securely, Blue Hill makes the following recommendations.
Implementing a cloud-based or hosted deployment allows companies to quickly gain the benefits of
Communications Lifecycle Management. At this point of late majority adoption, Blue Hill expects that
enterprise organizations with complete telecom, wireless, and service inventories in place should be able
to implement an initial domestic deployment in less than 90 days. Multinational deployments typically
take longer due to the client’s lack of on-premises deployment support, and the need to collect inventory,
billing, and carrier information from untrained resources such as office administrators or IT personnel
lacking telecom and mobility knowledge. By shifting to a cloud-based implementation, organizational
clients can also ensure that their CLM software is kept up-to-date as carrier billing changes, tax tables,
service order workflows, and other core operational interfaces and data structures change over time.
A CLM approach that can integrate with IT security policies. Security departments are struggling with
the increasing collaborative functionalities of unified communications, the apps associated with mobility,
and the uncontrolled Wi-Fi and sensor environments used to monitor facilities. Often, security and GRC
(Governance, Risk Management, and Compliance) organizations lack basic visibility of the perimeter that
they are trying to guard or of the users who have access to specific data channels. As a quick example, an
employee with a corporate-owned mobile device may inadvertently have access to corporate networks
that should not be accessible to that specific role. By working together with security, CLM can serve as an
important tool for aligning communications endpoints, applications, and services with the core risks and
security concerns that have affected the likes of Target, JPMorgan Chase, and Home Depot.
Use a CLM solution that is also able to handle IT asset management (ITAM) and IT service management (ITSM). As smartphones and tablets replace traditional desktop and laptop computers, and
the conventional desk phone is supplanted by softphone clients and apps, the traditional practices of
ITAM and ITSM have seeped into mobility and telecom in unexpected ways. As hardware becomes
software and individual assets become an aggregation of licenses, companies seeking to maximize the
value of CLM have to use a solution that is scalable and detailed enough to handle the organizational
demands of IT management. Even if CLM does not actually replace existing IT management solutions,
the software platform or managed service used to support this effort must be able to support the
governance and management of software licenses and to tie a wide variety of services and applications to
a single device or employee.
Copyright © 2015 Blue Hill Research Page 11
ANALYST INSIGHT
Conclusion
Telecom and IT managers have travelled a long and winding road over the past couple of decades, from a
time when phone service was barely an afterthought to a world where employees can initiate
conversations and share data via phone, mobile device, computer, or a variety of embedded
communications clients. Even experienced telecom and mobility managers must now consider the
consequences of the next generation of enterprise communications in their corporate environments,
whether this means moving to the cloud and to an app-ified world where there is an app for everything,
or to the next step of an Internet of networked and wearable devices. In either case, organizations must
maintain the same governance and expense management for these new form factors, licenses, and
services, or risk seeing these inventories and costs spiral out of control. Just as branch location phone
lines and cell phones have been IT management challenges in the past (and present), apps and sensors
represent the next wave of complexity. By shifting from a traditional telecom management mindset to a
more holistic communications lifecycle management perspective, next-generation IT organizations can
avoid being caught flat-footed as they seek to manage the future of communications.
Blue Hill Research is the only industry analyst firm with a success-based methodology. Based on the Path to Success, Blue HillResearch provides unique and differentiated guidance to translate corporate technology investments into success for the three keystakeholders: the technologist, the financial buyer, and the line of business executive.
Unless otherwise noted, the contents of this publication are copyrighted by Blue Hill Research and may not be hosted, archived,transmitted or reproduced, in any form or by any means without prior permission from Blue Hill Research.
For further information or questions, please contact us:
ABOUT THE AUTHOR
Hyoun ParkChief Research Officer
Phone: +1 (617)624-3600Fax : +1 (617)367-4210
Twitter: @BlueHillBostonLinkedIn: www.linkedin.com/company/blue-hill-research
Contact Research: [email protected]
Copyright © 2015 Blue Hill Research www.bluehillresearch.com
CONNECT ON SOCIAL MEDIA
@hyounpark
www.linkedin.com/in/hyounpark
bluehillresearch.com/author/hyoun-park/
Hyoun Park is the Chief Research Officer of Blue HillResearch where he oversees day-to-day research
operations, delivery and methodology focused on vendorand technology selection. In addition, Park covers
analytics and enterprise mobility technologies as a notedadvisor, social influencer, and practitioner. Park has been
named as a top 10 Big Data, analytics, and mobilityinfluencer including quotes in USA Today, the Los AngelesTimes, and a wide variety of industry media sources. Over
the past 20 years, Park has been on the cutting edge of web,social, cloud, and mobile technologies in both startup and
enterprise roles. Park holds a Masters of BusinessAdministration from Boston University and graduated with
a Bachelor of Arts in Women's and Gender Studies fromAmherst College.