Rick Hathaway V SCTCday cloud 24 feb16 Barcelona

Barcelona Telecom Consultants Day 2016
V BARCELONA TELECOM CONSULTANTS DAY
“The business is in the Cloud” How to find it, without being lost in the fog?”
"El negoci està en el Núvol" “Com trobar-lo, sense perdre’s en la boira?"
"El negocio está en la Nube” “¿Cómo encontrarlo, sin perderse en la niebla?“
24 Feb 2016
Rick Hathaway | Georges Mokhbat | Agustín Argelich | Martha Buyer | Patricia Ayodeji
Organized In collaboration with Sponsored

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TRADITIONAL OWNERSHIP
On-site customer premises
equipment (CPE), owned or
leased, serving a single
location or organization
MANAGED SERVICE
On or off premises system for
a single organization, operated
and maintained by a service
provider or third party
CLOUD/HOSTED SERVICE
Provider offering whose off-
site asset is shared and
billed/charged among multiple
customers (similar to “software
as a service”)
Motivators: Identifying Typical Ownership Models
www.rlhtelecom.com

Motivators: Ownership Model Characteristics
Ownership Model Premise Based Hosted/Cloud Managed Services
System or “asset”
IP/PBX or speech
application/server platform
Carrier-class, usually shared
“multi-tenant” system
PBX/IP-PBX core with
speech application servers
(dedicated or shared assets)
System location On-premises Off-premises On or Off-premises
Dedicated Asset Yes No Maybe (usually no)
Budget expenses
Usually significant Capex
with annual maintenance
Opex, “pay as you go”
(may have to buy phones)
Opex - typical model
(may have to buy phones)
Internal technical staff support Yes No/maybe No/maybe
Total Cost of Ownership (TCO)
Least
(usually for long term,
≥ 5-7 years)
Short Term = Lower
Long Term = Higher
MSA-dependent
Flexibility, control,
responsiveness
High Low MSA-dependent
Responsibilities of ownership
and upgrades
High Low MSA Dependent, maybe low
Vendor performance
management efforts
Low Medium/High High
Ease of “utility” deployment
and “up” scalability
Low High Probably high
www.rlhtelecom.com

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Motivators: Key Enterprise Business Drivers
Financial
• Reduce operating
costs
• Control capital
expenditures
• Reduce staff
• Be more productive
• Increase bottom-line
revenues
Tactical/Operational
• Become more
productive
• Support increasingly
distributed workforce
• Focus staff on core
business
• Improve in-house skills
with increased training
• Maintain status quo
(Typical/advertised) business goals for new IT & Telecom services:
Strategic/Operational
• Position organization for growth
or advancement in services
• Prepare to support an
increasing number of complex
applications
• Business process improvement
• Support new workplace realities
& increasing mobility
• Support global operations
4www.rlhtelecom.com

Pros
• Predictable Opex over the term of
agreement
• Increased staff focus on core
business strategy or projects (not
enterprise computer, network,
telecom services)
• Off-load system monitoring and daily
technical support activities
• Accelerated deployment process
• Reduced risk of failed deployment
with experienced provider
Cons
• Skepticism about:
– Cost savings
– Stability and reliability
– SLA Management
• Failure to include ALL cost elements in
the analysis
• Concerns about data security
• Questions about legal and regulatory
compliance
• Perceived lack of industry standards
• Costs for specific User customization
• Resistance from internal IT staff
• Loss of “enterprise control”
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Motivators: Cloud Services (typical)
www.rlhtelecom.com

Motivators: Checklist Factors
Selection is as much a business decision as it is technical.
Know your business objectives and your 1-3-5 year plan.
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• Understand your own unified
communications (UC) strategy
• Know your candidate providers
(and their services records)
• Perform your due diligence
procedures
• Perform financial and
reference checks with
clients of similar size &
complexity
• Use secondary references
• Assess your situation and
expectations objectively: technical,
financial, operational
• Let the business requirements drive
the technology choice, not your
equipment or service vendor
• Be realistic about goals & objectives
• Look at all operational aspects, not
just initial system costs
www.rlhtelecom.com

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1. Determine business
needs first.
2. Don’t assume the
infrastructure is ready.
3. Involve line of business
leaders.
4. Prepare a vendor-neutral
RFP.
5. Use an objective
evaluation process.
6. Remember those “one off”
needs.
7. Initial Price vs. Long Term
TCO.
8. Critical impact of contract
terms on long term
success.
9. Knowledge of regulatory
requirements
10. Training: user and technical
support.
Common Blockers: What to find out…What to do…?
www.rlhtelecom.com

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• Technology must solve a business problem or
place an enterprise in a position to advance its
goals to be justified.
• Every department has its own 1-3-5 year plans.
Do you know them all? Really….?
• Technology is just the tool, not the goal.
• Major technology procurements can be used as
an agent for change (new features, capabilities,
processes).
1. Determine business needs first

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Who is your customer?
• Business leaders responsible
for results are looking for tools,
not toys.
• IT-driven solutions are
becoming a hard sell as user
groups become more tech
savvy.
• Line of business leaders are
becoming increasingly active in
technology procurement
decisions.
Who is your advocate?
• Designate a senior
management sponsor to:
Help navigate the “C level
suite” corporate culture
Keep the project on the
executive agenda
• Establish a “voice of the
customer” initiative during
the process to improve the
odds of acceptance.
2: Involve line-of-business leaders

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Core Infrastructure
• Cable plant must be tested (or
upgraded) to new standards.
• New technologies will add
requirements on the core
infrastructure:
 Increased HVAC needs to
support POE
 New mobility requirements
“Don’t worry, our network is ready now….”
Data Network
• Voice is not “just another
application on the network.”
• Include a VoIP readiness study.
• Most vendors will not guarantee
system performance without a
current readiness study.
• Packet loss, jitter, latency, QOS
must be measured and
managed (forever).
3: Don’t assume the infrastructure is ready

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• Use full and open competition to
find “best fit” and best value.”
• Conduct a Pre-Bid meeting with
candidate vendors/providers.
• Require bidders to explain
“how” requirements will be met.
• Save the “yes/no” responses for
feature tables.
• Place page limits on responses,
i.e. RFP x2.
• Encourage questions and
distribute all responses and
addenda to all bidders.
• Demand “active” references
from the vendor/provider (not
the manufacturer).
• Include working reference
site visits for finalists.
• Remember “no solution is
right everywhere.”
RFP Strategies
4: Prepare a vendor-neutral RFP

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• Develop your own evaluation method; do not use a
vendor-supplied tool.
• Design a rating tool that is:
Valid: Measures what it is supposed to measure
Reliable: Produces consistent results
Usable: For non-technical team members
• Use weighted categories based on goals and priorities.
• Share the intended methodology with bidders.
5: Use an objective evaluation process

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• Start by creating a category table by priority
• Assign weighted values to meet your business goals
• Share with the bidders during the pre-bid meeting.
• Use as the basis for a more detailed evaluation tool.
WEIGHTED EVALUATION CATEGORIES Weighted Values
Adherence to Conditions of Bidding & Proposal 10%
System Requirements and Configuration 20%
Solution Features and Assumptions 20%
Optional Features 5%
Installation, Service and Support 20%
Vendor Pricing and Information 25%
TOTAL 100%
5: Use an objective evaluation process…continued

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• Sample section scoring – Vendor Pricing Information
• Full sample scoring matrix from a previous
procurement project available upon request….
Requirements Value Weight Vendor 1 Vendor 2 Vendor 3 Vendor 4
Vendor Pricing and Information
Adherence to Pricing Format supplied in RFP 10 10.00 9.00 8.00 8.00
Completeness of Pricing 10 10.00 9.00 9.00 8.00
Maintenance Plan Options/Pricing 10 8.00 10.00 7.00 6.00
Pre-Cutover Pricing (one year after final cutover) 10 5.00 2.00 8.00 9.00
Total Contract Pricing 20 20.00 16.00 18.00 14.00
Optional Item Pricing 10 7.00 9.00 9.00 7.00
Pricing Option: Purchase or Lease 10 5.00 8.00 9.00 9.00
Similar installations/references in the Wilmington, DE 20 8.00 8.00 8.00 7.00
Sub-Total - Points 100 100 73.00 71.00 76.00 68.00
Weighted Sub-Total 25% 18.25 17.75 19.00 17.00
Total Comparison Scoring
5: Use an objective evaluation process…continued

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• Forgetting about analog requirements (yes, analog & POTS)
• Maintaining operational fax services
• Not including peripherals
Headsets
TTY phones/communication terminal
Wireless Handsets (802.11x)
• Discovering those smaller “hidden call centers”
Look beyond typical front line sales and service groups
HR, IT Help Desk, motor pool, operator services, etc.
6: Don’t forget those “one off” needs

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• Easy to say, in tight budget
times.
• Do the math…each time…!
• Consider all leasing, hosted
and traditional premises-
based purchase options.
• Run the numbers based on
your corporate history for
typical year Life Cycle TCOs
(7-10-12 year cycles).
• Expect your numbers to be
challenged.
• Include as many elements
as are known:
 Infrastructure upgrades
 Incremental support staff
 Dual operations/migration
 Technology refresh (3-4 years)
 Initial and follow-on training
 Staff replacements
 Training for staff replacements
 Physical renovations, improvements
Price vs. Long Term Value (Total Cost of Ownership)
www.rlhtelecom.com

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Situation
• Incumbent hosted provider service
in 300+ locations
• 13,500 total stations, half of the
users on 296 legacy key systems
• Contract telecom maintenance staff
under City Telecom Director
• System not meeting advanced
functionality needs
• Four different manufacturer PBX
systems in the telecom network
• Seven different ACD systems
supporting 10 call centers
Results
• Evaluated Centrex, alternate
hosted, managed service, and
premises solutions.
• Forecasted 12-Year Life Cycle
Opex & Capex budgets (higher in
early years, lower in later years).
• Provided short, medium, and long
term technology upgrade plan.
• Recommended competitively bid
premises-based “private cloud”
solution.
7: Price vs. Long Term Value…continued

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12 Year Roll-up Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12
ANNUAL Costs 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current CENTREX $ 7,221,438 $ 7,449,034 $ 7,683,916 $ 7,926,319 $ 8,176,489 $ 8,434,679 $ 8,701,150 $ 8,976,171 $ 9,260,021 $ 9,552,989 $ 9,855,371 $ 10,167,476
Hosted VoIP Services $ 11,766,700 $ 11,444,401 $ 11,342,322 $ 11,555,441 $ 10,953,885 $ 9,164,040 $ 9,384,026 $ 9,665,733 $ 9,955,908 $ 11,717,362 $ 10,562,689 $ 10,879,828
Managed Services:
Digital/VoIP Hybrid
$ 11,901,386 $ 11,552,150 $ 11,450,071 $ 11,663,190 $ 11,034,697 $ 9,164,040 $ 9,384,026 $ 9,665,733 $ 9,955,908 $ 11,027,212 $ 10,562,689 $ 10,879,828
Alternate CENTREX
Bid
$ 10,282,408 $ 10,035,601 $ 10,372,059 $ 10,693,286 $ 10,384,128 $ 9,018,090 $ 9,302,732 $ 9,596,477 $ 9,899,622 $ 10,239,346 $ 10,535,339 $ 10,868,554
Premise Based Hybrid
Digital/VoIP
$ 14,447,815 $ 10,063,760 $ 9,114,839 $ 9,290,278 $ 6,849,344 $ 4,786,531 $ 3,701,741 $ 3,819,762 $ 3,941,642 $ 4,491,751 $ 5,346,160 $ 4,331,735
Cumulative Costs 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current CENTREX $ 7,221,438 $ 14,670,472 $ 22,354,388 $ 30,280,707 $ 38,457,196 $ 46,891,875 $ 55,593,025 $ 64,569,196 $ 73,829,217 $ 83,382,206 $ 93,237,577 $ 103,405,053
Managed Services:
Digital/VoIP Hybrid
$ 11,901,386 $ 23,453,537 $ 34,903,608 $ 46,566,798 $ 57,601,495 $ 66,765,535 $ 76,149,560 $ 85,815,293 $ 95,771,201 $ 106,798,413 $ 117,361,102 $ 128,240,931
Enhanced CENTREX $ 10,282,408 $ 20,318,010 $ 30,690,068 $ 41,383,354 $ 51,767,482 $ 60,785,572 $ 70,088,304 $ 79,684,782 $ 89,584,403 $ 99,823,749 $ 110,359,088 $ 121,227,642
Digital/VoIP
$ 14,447,815 $ 24,511,575 $ 33,626,414 $ 42,916,692 $ 49,766,036 $ 54,552,567 $ 58,254,307 $ 62,074,069 $ 66,015,711 $ 70,507,463 $ 75,853,622 $ 80,185,358
TCO Summary Spreadsheet
7: Price vs. Long term Value…continued

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ANNUAL Costs 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current CENTREX $ 7,221,438 $ 7,449,034 $ 7,683,916 $ 7,926,319 $ 8,176,489 $ 8,434,679 $ 8,701,150 $ 8,976,171 $ 9,260,021 $ 9,552,989 $ 9,855,371 $ 10,167,476
Managed Services:
Digital/VoIP Hybrid
$ 11,901,386 $ 11,552,150 $ 11,450,071 $ 11,663,190 $ 11,034,697 $ 9,164,040 $ 9,384,026 $ 9,665,733 $ 9,955,908 $ 11,027,212 $ 10,562,689 $ 10,879,828
Alternate CENTREX
Bid
$ 10,282,408 $ 10,035,601 $ 10,372,059 $ 10,693,286 $ 10,384,128 $ 9,018,090 $ 9,302,732 $ 9,596,477 $ 9,899,622 $ 10,239,346 $ 10,535,339 $ 10,868,554
Digital/VoIP
$ 14,447,815 $ 10,063,760 $ 9,114,839 $ 9,290,278 $ 6,849,344 $ 4,786,531 $ 3,701,741 $ 3,819,762 $ 3,941,642 $ 4,491,751 $ 5,346,160 $ 4,331,735
Cumulative Costs 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current CENTREX $ 7,221,438 $ 14,670,472 $ 22,354,388 $ 30,280,707 $ 38,457,196 $ 46,891,875 $ 55,593,025 $ 64,569,196 $ 73,829,217 $ 83,382,206 $ 93,237,577 $ 103,405,053
Managed Services:
Digital/VoIP Hybrid
$ 11,901,386 $ 23,453,537 $ 34,903,608 $ 46,566,798 $ 57,601,495 $ 66,765,535 $ 76,149,560 $ 85,815,293 $ 95,771,201 $ 106,798,413 $ 117,361,102 $ 128,240,931
Enhanced CENTREX $ 10,282,408 $ 20,318,010 $ 30,690,068 $ 41,383,354 $ 51,767,482 $ 60,785,572 $ 70,088,304 $ 79,684,782 $ 89,584,403 $ 99,823,749 $ 110,359,088 $ 121,227,642
Digital/VoIP
$ 14,447,815 $ 24,511,575 $ 33,626,414 $ 42,916,692 $ 49,766,036 $ 54,552,567 $ 58,254,307 $ 62,074,069 $ 66,015,711 $ 70,507,463 $ 75,853,622 $ 80,185,358
Option
12 Year Roll
Up Costs
Savings or
Additional
Costs
Savings or
Additional
Costs
Option 1: Current Centrex (used as Base Cost) $103,405,053 $ - 0%
Option 2: Hosted VoIP Solution $128,392,336 $24,987,283 24.2%
Option 3: Managed Service (Digital/VoIP Hybrid) $128,240,931 $24,835,878 24.0%
Option 4: Alternate Hosted/Centrex Bid $121,227,642 $17,822,589 17.2%
Option 5: Premise Based: (Digital/VoIP Hybrid) $ 80,185,35 $23,219,411 18.1%
TCO Summary Spreadsheet
Price vs. Long term Value…continued
www.rlhtelecom.com

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$-
$2
$4
$6
$8
$10
$12
$14
1 2 3 4 5 6 7 8 9 10 11 12
Millions
TCO Annual Costs
(annual cash flow)
Current CENTREX Enhanced CENTREX
Managed Services:
Digital/VoIP Hybrid
Hosted VoIP Services
Premise VoIP/Hybrid
www.rlhtelecom.com
Baseline
Centrex
Premise
Hybrid
Break
Even

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$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
1 2 3 4 5 6 7 8 9 10 11 12
Current CENTREX
Hosted VoIP Services
Managed Services:
Digital/VoIP Hybrid
Enhanced CENTREX
Digital/VoIP
Baseline
Centrex
Enhanced
Centrex
Hosted &
ManagedTCO: Cumulative Costs
(roll-up costs)
Break
Even
Premise
Hybrid
www.rlhtelecom.com

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8: Negotiate favorable contract terms
• Establish the vendor’s RFP
response as the ranking
document in negotiations and
the final contract.
• Go into final negotiations
with your top two finalists.
• Don’t use the vendor’s
standard contract; develop
your own for large corporate
wide purchases or cloud
service.
• Read the entire document:
Obtain contracts in open
MS Word format
 Define your preferred
ownership and purchase
options in the RFP
• Include a “cancellation
clause” for specific defined
instances of non-
performance.

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• Review for key terms and conditions specific to your
corporate environment:
Protection against third party HW/SW infringement claims
Bid bonds for non-performance, insurance, taxes
Prohibition on hiring each other’s personnel
Common, popular warranty disclaimers
Disclaimer of Warranties. Customer acknowledges and agrees that the Equipment is sold with the
manufacturer’s warranty only, and that VENDOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO
THE EQUIPMENT AND SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING
THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
FURTHERMORE, VENDOR DOES NOT WARRANT THAT IT WILL PREVENT, OR THAT THE EQUIPMENT WILL PREVENT,
UNAUTHORIZED USE (OR CHARGES FOR SUCH USE) OF COMMON CARRIER TELECOMMUNICATION SERVICES OR
FACILITIES ACCESSED THROUGH OR CONNECTED TO THE EQUIPMENT (“TOLL FRAUD”).
8: Negotiate favorable contract terms…continued

• Implementation incentives &
penalties
• MAC response times
• Include provisions for periodic:
– Technology refresh cycles
– Periodic service audits (reduced or
no cost adjustments for right-sizing)
• Training for everyone:
– ALL enterprise users
– System admin & support staff
• Security and Back-ups
– Who does them & and where are
they stored?
– Include encryption keys in the back-
up’s…! 24
Identify and negotiate Service Level Agreement (SLA) elements
• Billing cycles
– Payment schedules
– Discounts & penalties
• Rate review & billing errors:
– Are there limitations on how far
back you can claim
reimbursements?
– Recurring audit schedule
– Most favorable rate provisions
• Outage tracking & restoration
– Specific SLA-based goals
– Based on occurrence or user
reporting?
– Direct access to provider SNMP
data feeds
8: Negotiate favorable contract terms…continued

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9: Don’t skimp on training
• General admin Users
will most likely not be
familiar with new tools:
 Unified
communications
 Presence tools
 Unified Messaging
 Mobility options
• Contact center
supervisors will need
training on new…
 Routing schemes
 Reporting options
 Monitoring tools
 Agent scheduling
options
• Telecom/IT support
personnel will need
to master new…
 Provisioning
systems
 Routine
maintenance and
troubleshooting
Training for ALL users and support teams is a must have!
Insist the vendor provided training is done on-site

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10: Address policy and regulatory requirements
Make sure your solution includes the technology to comply!
• E911: Federally-mandated but state-controlled
17 states have passed “some” level of regulation
Some are painfully long and detailed (Illinois + Chicago add-ons)
Some are painfully brief (Florida)
• Next Generation 911 Act of 2012: Using technology
to resolve “9-911” dialing, i.e., “Kari’s law”

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Make sure your system includes the technology to comply!
• TCPA - Telecommunications Consumer Protection Act
Regulatory controls for contact centers using auto dial technology
Potentially heavy penalties for non-compliance
• Single vs. dual party notification for recording calls
(state-controlled)
• Mobility/cell phone deployment and policies
Do you have a strategy: Company-provided sets or BYOD?
Do you have an approved use policy?
More importantly, do you enforce it?
Employers are being sued when employees talk/text and drive, i.e.,
“distracted driving.”
10: Address policy and regulatory requirements…continued

Thanks for your participation…!
Questions?
301-384-7422
www.battlesgroup.com
bwbattles@battlesgroup.com
703-698-5432
www.rlhtelecom.com
rick.hathaway@mindspring.com
RLH Telecom Solutions
28

Rick Hathaway V SCTCday cloud 24 feb16 Barcelona

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