Why "the cloud" doesn't matter

An article on TechRepublic.com today titled, Why "the cloud" doesn't matter, does a great job of demystifying "the Cloud". Despite the title, it's not critical of the cloud. Rather by explaining it, it should help people feel more comfortable with it.

Among other good points, it provides a simple definition: "Essentially, the cloud is little more than “stuff outside your company.” That “stuff” could be processing power, storage, networks, applications or any other bit of technical wizardry. When the CIO says she’ll “put that in the cloud,” all she is really saying is she will take something that was done in-house, and do it with someone else’s “stuff.” .... Often, the cloud refers to a third party’s applications, analogous to the enterprise equivalent of gmail or hotmail to employees."

If you are at all baffled about what "the cloud" actually is, I highly recommend you read the entire article.

Walking for Autism!

This weekend, my wife and I are participating in Walk Now for Autism Speaks to help find a cure for autism. Autism is the second most common developmental disorder in the United States affecting one in every 110 children born today. Despite some promising discoveries, the cause of autism is unknown and a cure does not exist. Research is crucial. Every 15 minutes another child is diagnosed with autism. Not only must we find ways to improve the quality of life for children and adults with autism, but we also must find a cure, and soon.

Please help us make a difference in the fight against autism by raising money for autism research and heightening public awareness.

- Donate online to Walk Now for Autism Speaks here.

- Donations can also be mailed to Autism Speaks using the donation form located on my page or send me a check made out to Autism Speaks.

Sincerest thanks to you for any amount you can donate, large or small!

Donations are tax deductible to the fullest extent allowed by law.
Autism Speaks 501 (C)(3) Tax Id #: 20-2329938
Matching gift program: Many companies provide their employees with matching gifts. Please consult your employer on its matching gift guidelines and attach matching gift forms accordingly.

Taco Timeout!

Just a quick timeout from telecom to brag about some culinary accomplishments for a good cause. VDLc joined forces with our good friends at El Toro Barbecue last weekend to compete in the First Annual AZ Taco Festival & Competition. The all day event benefited Waste Not Arizona and featured live music, lucha libre wrestling, a tequila expo, a kid fun zone, a pepper eating contest and more. Thousands were in attendance.

I’m very proud to say our chicken taco tied for 1st place and we took 7^th overall! Considering we competed against some very good restaurants, it’s something to brag about.

Thanks to Sherri and Colin at El Toro Barbecue for including us, to KNCH Law Firm for sponsoring the team, and of course the festival organizers for a great event that benefits a great cause. Can’t wait to do it again next year!

http://www.eltorobbq.com/ • http://www.knchlaw.com/en/ • http://www.wastenotaz.org/

Video Post: TEM Superhero

Well, I thought I'd try something different to lighten things up. This is a typical conversation between a TEM consultant like me and a prospective client. It addresses common questions and misconceptions about what we do. I hope you find it informative and a bit humorous...

VOIP Basics: PVOIP vs. IVOIP

I attended a great presentation on VOIP* this week by James Gillespie, an industry expert and senior engineer with Trans-West Network Solutions (twns.com). He discussed a misunderstanding about VOIP services that I think explains why some people are scared away from the technology. These are my own acronyms, but his point was that there are two very different types of VOIP:

• Private VOIP (PVOIP): VOIP over private connection (WAN connectivity).
• Internet VOIP (IVOIP): VOIP over internet connection (public internet).

The key issue is latency (transmission delay), the enemy of VOIP. High latency causes poor quality voice calls. With PVOIP, you have your own private connection you can control to eliminate latency – calls don’t traverse the public internet. IVOIP calls do traverse the internet and, because it is public, nobody can control it. So when it’s crowded, there are traffic jams, i.e., latency. It’s like BMW trying to test cars on the autobahn rather than a test track. The autobahn is generally ok, but other cars are likely to get in the way at some point. On a private test track BMW has total control of the road and so can go as fast as they want.

Services like Vonage and Skype use IVOIP. These calls are sometimes poor quality because of latency that occurs on the internet. I think when people have one of these bad IVOIP calls, they get scared away from PVOIP because they assume it’s the same as IVOIP. Truth is, a properly designed PVOIP service consistently provides calls that are as clear as traditional voice services.

If you are considering VOIP, the key is to understand which service you are being offered, and then choose the one that meets your needs. IVOIP is more suitable for personal use where poor call quality might be tolerable. For most businesses, call quality is important, so PVOIP is a better solution.

* What is VOIP? It stands for Voice Over Internet Protocol, which really just means transmitting voice digitally, as opposed to analog. It’s CDs vs. vinyl records. http://en.wikipedia.org/wiki/Voip

4 Year Slam!

While auditing a phone bill recently for a new client, I discovered they had been slammed by an LD carrier (slamming is when your LD carrier is changed without your permission). As is typical, this carrier was charging very high rates. Normally I could get a refund for the client, but in researching the situation I discovered the slam had occurred four years ago. Four YEARS. That’s a long time to be overcharged for something without noticing. Since the FCC (Title 47, Sectn. 64) only requires carriers to retain authorization records for 2 years, the client could not get a refund.

In my client’s defense, it was well buried in the bill, but the point is this: Don’t get ripped off. You need to read your phone bills. Scrutinize every line on every page. If you see something you don’t understand, call the carrier and ask. Don’t stop asking until you are confident that you know what everything is and that you are paying what you should for it.

An easy way to validate a bill each month is to simply identify what the total monthly charge should be each month. Take a bill for any month you know to be correct. Subtract from the Total Current Charges any usage-based charges (like LD) and all Taxes and Surcharges. This is the portion of your bill that should be fixed month to month. Do this calculation every month to ensure the fixed portion doesn’t change. Thoroughly validating usage can be involved, but you can at least validate the rates being charged. Validate Taxes and Surcharges by ensuring they remain a consistent percentage of fixed plus usage charges.

DIY Telecom Cost Reduction?

Most companies are looking to cut costs these days. Telecom services are one area rife with savings opportunities. Stats show the average company can reduce costs by 1% of revenue. But before you embark on a hunt for savings, consider whether you should DIY or hire a consultant (a TEM or Telecom Optimization consultant).

First, be realistic about whether you really have the time/resources. Steven Covey would define a TEM project as “important” but “not urgent”, so it will tend to take a back seat to anything remotely urgent. This has a cost - every month of delay is another month of over-payment.

Second, do you have the expertise to wring the maximum savings out of the effort? This is the tougher question because you don’t know what you don’t know. I would just say, keep in mind there’s a reason why a billion dollar TEM industry exists, i.e., it requires expertise.

These formulas will help you think through it and analyze the costs:

DIY Cost =
+ Your Staff’s Hrs (time learning TEM, planning, executing)
+ Opportunity Cost (of delaying other projects in favor of TEM)
+ Un-captured Savings (due to lack of TEM expertise)
+ Cost of Delay (delayed start & longer duration will delay savings capture)
+ Financial Risk (potential for costs to exceed savings)

Consultant Cost =
+ Your Staff’s Hrs (time supporting the consultant - a small fraction of DIY staff hrs)
+ Share of Savings (consultant contingency fee)
Note:
o No Opportunity Cost (other projects not impacted)
o All savings opportunities will be captured
o No Cost of Delay (shorter project duration yields savings sooner)
o No Financial Risk (no fees unless there are savings)

In short, telecom consultants have the time and expertise required while eliminating any financial downside. However, if you happen to have the expertise on staff and that person has the time, it may indeed make sense to DIY. The key, of course, is to be realistic when evaluating the various factors.

Note: Wondering about ROI? Assume savings of 10-30% of your total telecom spend, keeping it the same for both the DIY and the Consultant scenarios – the savings will likely be lower for DIY, but that difference is accounted for in the cost equation.

Smartphone Security Risk?

I don’t meet many managers who think much about security when it comes to mobile devices. Here’s an example to illustrate why they should: Jane keeps her passwords on her Blackberry. Jane picks up some malware while surfing the mobile web. Jane’s passwords are now compromised, one of which is for your company network. Now your company network is compromised.

Keeping your Paypal password on your cell phone? Mobile phone security is something to think about personally, as well.

A good article with more info: http://tinyurl.com/22tlamc The company it mentions, SMobile, has solutions for both business and personal use. If you know of other good companies, please email me or post a Comment.

Mark

6 Key Questions re. Telecom Cost Mgt.

There is something about telecom that just causes it to not be managed well. Based on my experience, I estimate that 90% of medium sized companies and 95% of small companies mismanage, or should I say, don’t manage their telecom costs. I’m not exaggerating here. I talk to managers of all kinds all the time and I can’t remember one ever saying their company did a good job at it. People usually concede, “yes, we don’t REALLY know what we have and what we’re paying for”.

The reasons, I presume, are simply that nobody in the business has the knowledge or time to deal with it. Add to this the perception that there’s not a lot of money at stake and you have the formula for complacency. I get it. But what businesses need to understand is there is more money at stake than they realize. My clients are routinely surprised when they learn what they actually spend (yes, many businesses don’t know what they are actually spending).

So if you are concerned at all about the cost, there is a way to know how well it’s being managed without a lot of knowledge or spending much time. Ask the person currently responsible for telecom the following six questions. Common sense will tell you if their answers make sense. If they don’t, there are plenty of consultants out there (such as me) with knowledge and time who are happy to help:

1. What is the process for approving invoices and how do we ensure that everything on our bills is understood and billed at our contracted rates?

2. What is the process to track contract renewal dates and how does it ensure contracts won’t auto-renew unintentionally?

3. Do we maintain an inventory of services and track specifically what and who each individual line is for? Provide a sample of the inventory and a brief explanation of how it’s kept current.

4. Have we verified that all billed services are physically present and working? How did we do this and when?

5. Have we reviewed the number of lines we need relative to our business needs and eliminated any surplus? How did we do this and when?

6. Although current pricing may be contractually locked-in, do we know how competitive our rates are and what our plans are for when contracts end?

A worksheet with these questions can also be found at: www.VDLconsulting.com/Library

Mark

Telecom Savings Tip: Stop Writing Blank Checks

Some telecom services are like blank checks for your employees. 411 directory assistance, for example, can cost as much as $2.50 per call. Most commonly abused is Long Distance, both domestic and international. Employee use and abuse of these services can really add up. If you don’t have some controls in place, you may as well hand out blank checks each month.

Controlling such costs is actually easy. Simply block the services or monitor their use. Your carriers can block 411 and other such per-use services. Similarly, LD usage can be blocked altogether, or just block what you don’t need. If you do interstate but no overseas business, have your carrier block all international LD and leave domestic LD open. Or if you want employees to be able to make LD calls but know it’s monitored, have your carrier set up Authorization Codes for each employee (or by department). These codes are like passwords your employees enter each time they make an LD call. Your carrier can then provide a detailed report of each employees (or departments) LD usage. Even if you never look at the reports, you will reduce usage simply because employees know their usage is being monitored.

Use of LD blocks and Authorization Codes can also protect you from “toll fraud”, where crooks gain access to your phone system and relay LD calls through it. In a short time, they can rack up $thousands on your bill and you will not be entitled to a refund from your carrier.

Most of these controls, by the way, can also be done through your phone system (rather than the carrier). I generally go the carrier route because they typically implement at no cost and they also will take more responsibility for the cost of any usage that slips through.


Mark

PS: Checkout 800-goog-411 for free 411 calls. Short video: www.google.com/goog411

Telecom Savings Tip: Shield Your Bill from Invaders!

While scrutinizing an AT&T phone bill for a client recently, I discovered some mysterious charges on the very last page of the bill. Poorly labeled and weakly described were services for webhosting for $39.95 per month from a company called Bizzfinders.com. These charges had been billed for over two years without anyone noticing. In this case the charges were in error and I was able to obtain a refund for my client, but I have seen other cases where the charges were downright fraudulent (referred to as “Cramming”). This practice of the phone company billing for other companies is referred to as “third-party billing” and is legal when done properly. Legal or not, you want to be aware of it.

So first of all, you need to read your phone bill every month. Carefully! These and other types of charges, legitimate and not, can find their way onto your bill and you need to catch them early. If you see something on your bill and you don’t know exactly what it’s for, call the carrier and get the explanation you are entitled to.

Second, you can protect against surprises like the Bizzfinders charge above by having your carrier put a block on Third-Party billing. It’s not total protection against over-billing, but it does plug one of the holes. If you want to plug the rest of the holes, check back periodically as I will be posting more tips on how to keep your telecom costs under control.

Mark
www.VDLconsulting.com

The Rodney Dangerfield of Professional Services

I tell ya, TEM (Telecom Expense Management) gets no respect. When I talk to people about TEM, I usually get a blank stare. Most people just haven’t heard of it. The industry has an image, or at least a visibility problem. Considering it’s a billion dollar industry and most business people haven’t heard of it, it must.

On top of that, the TEM industry’s prevailing revenue model uses contingency-based fees (% of savings). Those who understand the industry know this to be a win-win deal, but to others it might seem, well, perhaps a bit unsavory. I can’t say I completely understand this, but I think maybe it’s because it has the ring of “free” to it, and everybody knows there is no free lunch. If someone is offering something for free, there must be a catch, right? So is there a catch with TEM?

Here’s the deal. Businesses are skeptical that there are significant savings to be found in their telecom areas, enough so that they are unwilling to risk investment to find out. TEM providers, however, understand (based on experience and industry studies) how common waste is and how likely it is they will find significant cost savings for the average enterprise. So they accept the risk. It’s that simple. TEM providers are simply playing the averages. They have no secret intention to up-sell services or other ulterior motives (well, of course some might, but generally not). They don’t need any when they’re able to make a “normal profit” by sticking to TEM.

Besides, it’s not free. Sure, if no savings are found, there are no fees. But if savings are found, there ARE fees. In any case, it’s all upside for the client and there’s no disrespect in that!

Does HR do your taxes?

Of course the answer is no, because they obviously don’t have the expertise. So why does IT manage your telecom area? Not an accurate comparison, you say? Surprise! IT and telecom are not the same things. Case in point, your IT guys don’t manage your PBX as they do your servers. Rather, they have a PBX vendor do it.

The point is you have IT managing something they don’t really have the expertise for. Sure IT understands the data-oriented side of telecom (data circuits, internet, etc.). But the voice side is far more detailed with numerous line types and features on varying rate structures across local, LD and especially cellular. In addition, many IT managers lack the administrative expertise required to manage all services at the detailed level necessary for controlling costs. There can be dozens, even hundreds of billing elements on a voice telecom bill. Ensuring contract compliance for all those elements is not simple.

So what? Well, the problem is this lack of expertise leads to overspending. Failing to put in place processes and systems for proper record keeping, invoice review and approval, ongoing capacity analysis, etc. is essential. Unused lines, double billing, excess capacity and unnecessary features are common examples of why failing to do so is very expensive. TEM Industry consultants estimate the average company wastes 1% of revenue on such inefficiencies.

My advice? Confirm whether IT has things under control or not. Bring in a TEM expert to do an assessment of your IT departments administrative processes – there should be no charge. You’ll either find out there is room for improvement, or confirm that things are under controlled and costs are minimized. Either way, you need to know.