Telecom Benchmark – The Checklist
Before a Telecom benchmark – The list you wished you had before you started your last benchmarking process!
Benchmarking is one of TEM’s most necessary evils. It can be a long and boring process, but without it you are almost definitely wasting money. Done incorrectly, you are also wasting time…
It really pays to be as specific as possible with this before you start your benchmarking process, as it will enable you to make the most accurate comparisons for your business
Before you start benchmarking network expenses across several suppliers, you should sit down with a checklist which will keep you focused on the end goal (saving money), help you to anticipate any potential problems, and make the whole benchmarking process as quick and easy as possible. Our checklist helps you to ‘benchmark’ your usual benchmarking process, so that you make the most of your limited time and start saving sooner.
- Is this the right time to be benchmarking?
First and foremost – work out whether you not you need to be benchmarking at this point in time. Do you have any contracts coming up for renewal? If the answer is “no”, then (unless your contract contains a benchmarking clause) you probably don’t need to prioritize benchmarking at this point in time. If the answer is “yes”, then put together a summary of the contract terms and pull together the inventory in-scope for the benchmark assessment.
Benchmarking is a time consuming process, so there is no point in doing it just for the sake of doing it. Wait until you can maximize the added value to your business by carrying out your benchmarking before one or more major TEM contracts come up for renewal.
- Understand your network technology
With TEM benchmarking, you are rarely ever comparing apples with apples. Every business is different and comes with its own set of telecom priorities which must be taken into consideration. There is no point in analysing against a dataset which does not correlate with your existing TEM network.
Drill down into the finest details of your network technology so that you are able to source the most accurate benchmarking data. For instance, are you operating within a managed or an unmanaged MPLS network? What is your current Quality of Service (QoS) profile? Does your network include Network-to-Network Interface (NNI) agreements? Is latency a or redundancy / protected routing a factor?
It really pays to be as specific as possible with this before you start your benchmarking process, as it will enable you to make the most accurate comparisons for your business.
- Define your metrics
There are a lot of different variations on QoS (e.g. platinum, gold, silver, bronze or best-effort) so you need to establish where your company stands. If you are operating within a silver QoS but comparing yourself against a network with a bronze QoS, you are going to appear to be consistently overpriced.
However, you should be very aware that different companies may have different definitions of the various QoS standards – what you classify as ‘bronze’ could be called ‘silver’ elsewhere. It is worth taking some time to define your internal QoS targets so that you are comparing performance, not names.
For data services, breakdown your current Cost Per Meg. Your Cost Per Meg is a great metric to understand your network capacity and the cost associated with “X Meg” of data. Basically this identifies your cost to send for example 1Meg of data across your network. You can analyze your cost per meg a number of ways: total spend by region, city, country or on a per services basis. temforce’s Cost Per Meg report produces a great summary which identifies your total capacity and cost helps to quickly identify outliers across your network spend. In carrier terms, this boils down to the cost suppliers charge to lease capacity across their backbone network.
- Work out your ‘priceless’ elements
Benchmarking is all about finding the best price for the best service, but in every business there are always a number of “indefinables” which can contradict your budget. The number one indefinable in TEM is the relationship between the carrier and your network.
There is no point spending weeks of your time coming to the conclusion that a key carrier contract may be cheaper elsewhere, only to find that senior management is not prepared to make the switch. Perhaps there is a “buy-sell” agreement between two parties or that the carrier provides other valuable, albeit intangible services or support that you don’t know about. All of this can limit your ability to keep costs competitive, but you still need to be able to produce a credible set of recommendations.
Before you start benchmarking, setup a meeting with the decision makers and find out how they feel about making changes to the buy-side of the business. Make them aware of the financial impact involved if they choose to ignore benchmarking advice, or stick with the same carriers year after year.
You can then work out a strategy that allows you to identify areas where money can be saved, without suggesting a slew of changes that will never be actioned.
- Benchmarking when you can’t enact changes…..
Even if there isn’t a “desire for change” within the organization; perhaps there are insufficient resources within engineering to manage a migration programme – a benchmarking exercise will provide you with the information to work with your carrier to reduce their standard offering yet further still. Inability to take action within your organization doesn’t stop the benchmark exercise from being potentially effective if you can use its findings as part of the negotiations with your existing provider.
- For true effectiveness, make sure you are able to enact changes
The benchmarking process will end with a set of recommendations on how your company can save money and improve its business. However, you need to make sure that you have the ability to enact these changes when the time comes.
Conclusion
Check over all your existing contracts and budgets and make sure that you are legally and financially able to make any anticipated changes. Otherwise your benchmarking efforts will have been for nothing.