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Technology and Technology and Telecom in Tough Telecom in Tough

TimesTimes

David W. NelsonDavid W. Nelson

Strategic-PartnerStrategic-Partner

david.nelson@schooleymitchell.comdavid.nelson@schooleymitchell.com

22

What Did I Say Last Year?What Did I Say Last Year?

Embrace Web Embrace Web 2.0: Blogging, 2.0: Blogging, Conferencing, etcConferencing, etc

Investigate Investigate VirtualizationVirtualization

Pursue Pursue Voice/Data Voice/Data IntegrationIntegration

Be Playful, Not Be Playful, Not ParanoidParanoid

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What’s Exploded This Year?What’s Exploded This Year?

Mobile Power Mobile Power The Social WebThe Social Web ObamaniaObamania My ArmMy Arm And And

Unfortunately… Unfortunately… The EconomyThe Economy

44

And Now, for the Painfully Obvious...And Now, for the Painfully Obvious...

“No matter how many years you work in college admissions, it never gets any easier to say no. At my institution, we received 4,079 applications but only

have 245 spots in the freshman class. Choosing among a majority of overqualified students is our

challenge.”

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So, One Person’s Challenge..So, One Person’s Challenge..

In a down real estate In a down real estate market, people market, people remodelremodel

In a down economy, In a down economy, people and people and businesses businesses re-toolre-tool• When the economy is good When the economy is good

saving money is important...saving money is important...• When the economy is bad When the economy is bad

saving money is CRITICAL!saving money is CRITICAL!

Lets Dig In, Shall We?Lets Dig In, Shall We?

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Sitting on IT ExpensesSitting on IT Expenses

Go Lean and GreenGo Lean and Green

Optimize (not Optimize (not Octamom)Octamom)

DO Put Off Until DO Put Off Until Tomorrow…Tomorrow…

Mind Your Ts and CsMind Your Ts and Cs

Finding Free MoneyFinding Free Money

77

Gartner’s IT cost containment Gartner’s IT cost containment frameworkframework

18. Refresh/ Upgrade Delay

22. Telephone Bill Audit

10. Automated Software

Distribution

14. Open-Source Software

Manage Demand

Shift to Variable Cost

Link costs to demand

2. IT PMO

4. Contingent Workers

5. Software as a Service

6. Capacity-on- Demand

3. IT Governance

Improve IS Business Practices

20. Print Fleet Rationalization

19. Asset/License Management

Change IS Operating

Model

15. Data Center Consolidation/

Automation

16. Standard Operating

Environment17. Teleworking

21. Telephone Expense

Management

25. Apps Dev Process

Improvement

24. IT Operations Process

Improvement

23. Contract Renegotiation

Reduce Resource

CostsReduce

Technology Cost

11. Server/Storage Virtualization

12. Voice/Data Network Reengineering

13. Voice over Internet Protocol

Reduce Labor Cost

7. Staff Reconfiguration

8. Selective Outsourcing

9. Offshore Outsourcing

Change Operating Practices

IT c

ost

cont

ainm

ent

1. Chargeback

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What’s Virtualization What’s Virtualization Again?Again?

Basically, Using One Machine to Act Like Many

Cost Savings of 60-80%

Proven Technology Improves Security &

Reliability USPS Eliminated

1,600 Servers and Saved Over $2M

99

10

Schooley Mitchell

Client

Optimization Summary

Analysis of telecom expenditures; high probability of savings of (20-50%)

Reconciliation of billing against inventory Presentation of findings & recommendations Implementation & project management of

recommendations Validation of savings and service optimization

each quarter over the life of agreement

Incurs no up-front cost; incurs no risk Uses no internal resources Is in control of the process; makes final decision 95% of Clients experience savings

11

CustomerGo/No-Go

Reco

mm

endati

ons

Discovery Analysis ImplementationOn-going

Audit

SystematicBill

Audit

Local

LongDistance

Cellular/Wireless

Pagers

Internet

DataNetwork

ContactVendors

OrderChanges

ConfirmOrders

VerifyComplete

Test

CorrectErrors

$Savings

Audit/Verify

Add’lSavings

Optimization Process

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1313

Defer Tech PurchasesDefer Tech Purchases Prices Continue to Prices Continue to

FallFall Extended Life Makes Extended Life Makes

this Practice More this Practice More Attractive Than In the Attractive Than In the PastPast

Repurpose or Host Repurpose or Host SolutionsSolutions

Make Cheapest Make Cheapest Mistake PossibleMistake Possible

The RAM ExampleThe RAM Example

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Evaluate against buying only software to be installed in the next 6 Evaluate against buying only software to be installed in the next 6 to12 months.to12 months.

Negotiate Negotiate correctlycorrectly to remove unused licenses from support. to remove unused licenses from support. Ensure that you understand any license restrictions.Ensure that you understand any license restrictions. In the agreement, include the rightIn the agreement, include the right to new functionality. to new functionality.

What Was Licensed: What Is in Production:

Module A $250,000Module B $400,000Module C $125,000Module D $50,000Module E $35,0002,000 Named Users @ $1,250 $2,500,000Total List Licenses: $3,360,000Discounted 50% $1,680,000

Yearly Maintenance @ 20% $336,000

Module A $250,000Module B $400,000Module C $0Module D $0Module E $35,0001,200 Named Users @ $1,250 $1,500,000Total Software Using: $2,185,000Discounted 40% $1,311,000

Yearly Maintenance @ 20% $262,200

Shelfware Cost: $73,800

Software Costs, Usage and Software Costs, Usage and Smart ContractingSmart Contracting

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When It Comes to Contracts..When It Comes to Contracts..

Renegotiate Anything Renegotiate Anything That’s Half OverThat’s Half Over

Clauses to Watch ForClauses to Watch For• ““Evergreen”Evergreen”• Mid-Term ReviewMid-Term Review• NPV on Early NPV on Early

TerminationTermination• SLA/Chronic OutageSLA/Chronic Outage• Support LevelsSupport Levels

Everything’s Everything’s NegotiableNegotiable

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TEM and AuditTEM and Audit

Stop Dollars From Stop Dollars From Flying Out The Flying Out The WindowWindow

81% of Surveyed 81% of Surveyed Organizations Had Organizations Had Billing ErrorsBilling Errors

Eliminate Eliminate Redundant/ Redundant/ Disconnected Disconnected ChargesCharges

Basically, “Watch Basically, “Watch Your Bucks”Your Bucks”

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1818

1919

2020

Until Next Time…Until Next Time…

Serious About IT Serious About IT Cost Savings? Have Cost Savings? Have a Strategya Strategy

Residual Savings Residual Savings Have Greatest Have Greatest Long-Term ImpactLong-Term Impact

Reinvest the Reinvest the Savings Savings

Measure the Measure the InvestmentInvestment

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Who Is Schooley Mitchell?Who Is Schooley Mitchell? Largest Independent

Telecom Consulting Firm in North America

We Deliver: Time

Money

Knowledge

Security

Experienced Consultants Focused on Delivering Value to your Organization

david.nelson@schooleymitchell.comdavid.nelson@schooleymitchell.com