tco selling 1.0 intelisys confidential – do not distribute to third parties

TCO Selling 1.0

Intelisys Confidential – Do Not Distribute to Third Parties

• 9:00 – 9:15 – Intros• 9:15 – 9:45 – Setting up the TCO process• 9:45 – 10:00 – Important TCO principals• 10:00 – 10:30 – TCO & Telephony• 10:30 – 11:15 – TCO & Cloud Computing• 11:15 – 11:30 – Break• 11:30 – 12:00 – Working the Tools• 12:00 – 12:45 – InContact• 12:30 – 1:00 – Wrap-up

Agenda - PDT

Terrapin Solutions Confidential2


THANK YOU!!!!

• Appreciating the Value of TCO Selling• How to Set up the TCO Selling process• Capturing all the spend• Using the TCO tools• Avoiding the pitfalls

Objectives for the Day


• Why is TCO-selling So Effective?– Great differentiator…few do it well.– Smarter than simple comparative – Removes much of the mystery of selling– Powerful Trial-close in itself

• ABtC

– The process determines the outcome– It saves your most valuable resource

TCO Selling


6

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Terrapin Solutions Confidential

• ROI (Return on Investment)– Invest now– Get a return on your money over time in the form of cost

reductions and productivity gains– ROI is often positioned in CAPEX-oriented decisions

• TCO (Total Cost of Ownership)– Measure what you will invest in entirety in technology over time– Determine what options result in a lower TCO over a certain period– TCO is often positioned in OPEX-oriented decisions

TCO vs. ROIWhat’s the Difference?


• Typically happens at the end of the 1st meeting…sets up the rest of the process.

“As part of our consultative process, we want to see if our proposed solution has hard dollar financial justification. To do that, we complete a thorough TCO (Total Cost of Ownership) analysis. At the end of this process, the tool will simply tell us what the total financial impact will be. We find it dramatically simplifies your decision, because it will either make good financial sense, or it won’t. Does that sound reasonable?”

“Excellent. To start, we want think about this process in this context. Suppose for a moment that you knew nothing about us or our solution. What would your most likely alternative be? What would your monthly and one-time expenses look like over the next 3 to 5 years? Keep that context in mind as we go through this.”

The formula: Current Spend + Projected Spend = Current Path TCO

Setting Up the TCO Process


• The numbers MUST come from the customer…they own it.

• Make no assumptions you can’t back-up and defend….know your data.

• If the customer is fighting the process, stop, and go back to selling the process.

• Remember, “Same As” is a good thing and sets expectations that can be beat.– “40% of sales is Setting the Right Expectations. 40% is Meeting or

Beating those Expectations. The other 20% is a mystery.”

Important TCO Principles


• “…if you knew nothing about us…”– PBX– Phones– Maintenance & MACs (moves, adds, changes)– Installation & Training

• Services– Telco Costs (Local, LD, Int’l, Toll-free, Lines)– Bandwidth (WAN, IP, etc)

TCO Elements - Telephony


• Servers– servers are typically replaced on 3 to 4 year refresh cycles– New “PBX” solutions run on servers, i.e., Cisco, Shoretel,

Avaya, etc.• End-points

– Proprietary end-points add cost long-term, i.e., Cisco, Shoretel, Avaya, Polycom (Lync)

• Staffing– Next-gen PBXs require certified engineering on staff, i.e.,

Cisco– Certified Engineers are harder to staff & retain

Other Telephony Considerations?


• What are the Key Components?– Hardware– Software– Utilities– Labor

TCO & Cloud Computing


• “If you knew nothing about us or our Cloud solutions, you’d most likely do what over the next 3 to 5 years?– Hardware refresh? (true even if they bought

new hardware yesterday)– # of PCs, MACs, Servers– Type of Firewall– Storage– Backup

TCO Elements - Hardware


• “If you knew nothing about us ….”– Windows OS update? (XP, Vista, 7)– Office Professional (most common)– Server Software (per server)– Server CALS (per user)– Exchange Server Software– Exchange CALS– Antivirus (i.e., Norton, McAffee…per user)– Software Assurance & Maintenance

TCO Elements - Software


• What’s a kWh? (kilowatt hour)– 1,000 watts for 1 hour = 1 kWh– Example: 100 watt Light Bulb left on for a full month

• 24 hours x 30 days = 720 hours• 100 x 720/1000 = 72 kWh

TCO Elements - Utilities


Average price for a kWh?• US Average: $0.1036 per kWh• NY Area Average: $0.165 per kWh• ATL Area Average: $0.104 per kWh• CA Area Average: $0.145 per kWh

US Energy Information Administration, July 2012

• How many kWh per device?– Server – 187 kWh– Desktop PC – 80 kWh– Laptop – 35 kWh– Thin Client – 5 kWh– Room Air Conditioner – 280 kWh– PBX – 187 kWh

• “I don’t pay for power, its part of our lease.”– Really?– Prove the Cloud reduces your power by X, then renegotiate your lease.

TCO Elements – Utilities (cont)


• Know your audience• Tread Carefully!

TCO Elements – Labor


• Average IT Staffing Costs– Consider the fully-burdened labor costs

• Payroll tax, Workmen’s Comp, Retirement Contribution, Vacation, Unemployment Insurance, Health Insurance• Salary + 35% = Fully Loaded Labor Costs (average)

– The median expected salary for a typical IT Manager in the United States is $107,349. (www.salary.com) ($165,152 loaded)

• In New York, the average is $126,886 ($195,178)• In Boston, the average is $120,898 ($185,996)

– The median expected salary for a typical Help Desk Support Tech is $42,691• In New York, the average is $53,770 ($82,723)• In Boston, the average is $51,232 ($78,818)

• Outsourced IT Support– “current benchmarked prices for full desktop support range from $54 to $70 a month, per

desktop…” – www.cio.com August 2009– “85 percent of companies plan to increase or maintain their spending with Outsourced IT

support providers.” – Gartner, 2010

TCO Elements – Labor


http://www.cio.com/

http://www.salary.com/

http://www.cio.com/

• How much does a lost or stolen laptop cost?– $49,246 – Ponemon/Intel Study, April 2009

– Laptop replacement cost: $1,582 – Detection & escalation cost: $262 – Forensics & investigation cost: $814 – Data breach cost: $39,297 – Intellectual property loss: $5,871 – Lost productivity cost: $283 – Other legal and regulatory costs: $1,117

• How much does a computer virus infection cost?– $5,000 per incident at minimum

• Assumes only 10 machines affected• Great Online Calculator

– http://www.gordano.com/kb.htm?q=1888

TCO ElementsThe Unpredictables


• What is the Cost of Downtime?

–The Downtime Calculator

TCO ElementsThe Unpredictables


• Downtime Calculator• Cloud TCO Tool• Simple TCO Tool• Multi-option TCO Tool

Review the TCO Tools


Premise vs. Cloud Contact CenterTotal Cost of Ownership Analysis

Daniel Elmer | 801.320.3340 | [email protected]

ABOUT THE TCO ANALYSIS

– Frost & Sullivan designed TCO models to compare the costs of acquiring, operating, and maintaining contact centers over their useful lifetime.

– The study compared premise-based contact center systems/applications versus cloud contact center services.

vs.

STUDY CONSIDERATIONS

– Deployments: mix of single-site and multi-site– Networking costs: roughly comparable for hosted

and premise– Systems: all hardware and operating system software components– Implementation costs: system installation, configuration, routine

integrations– Cloud configurations: upgrades and maintenance fees included in

monthly fees– Premise configurations: first year’s upgrade/maintenance fees

included in original sales price. For following years, fees are 18% of purchase price per year

LOWER TOTAL COST OF OWNERSHIP

Agent Seats Total Cost of Ownership% Savings over 3 years

50 Seats 30% Savings




Source: Frost & Sullivan, April 2011

Real savings in cloud-based vs. premises-based solution

Customer-Centric Strategies

LOWER TOTAL COST OF OWNERSHIP

Agent Seats Total Cost of Ownership% Savings over 5 years

50 Seats 8% Savings




Source: Frost & Sullivan, April 2011

Real savings in cloud-based vs. premises-based solution

Customer-Centric Strategies

Summary of Cloud TCO | ROI

• Technology Costs:– IT Avoidance Savings– Disaster Recovery– Telecom Spend Reduction

• Gained Efficiencies:– Remote Agents | Part Time Agents (lower infrastructure costs)– Screen Pops (reduced handle times)– Self-Service (contact deflection)– Multi-media (lower cost channels)– Hiring processes (lower agent attrition)– Agent Scheduling (matching agent schedules with true business demand)

What troubles today’s contact center…Increasing productivity and reducing costsProviding an outstanding customer experience FlexibilityIncreasing revenueHandling virtual environmentsPreventing customer churnMoving from cost center to profit centerMarket pressures to run global operations

Source: CRM magazine, Feb. 2008, Donna Fluss

Alex Coxon, Freelance writer for Call Centre Helper

Staff attrition

Ongoing training

Changing customer

Agent engagement

Mandatory cost-cutting

Poor first-call-resolution rates

Inability to improve performance levels

Poor integration

Inadequate technology

Weak economy

Source: CRM magazine, Feb. 2008, Donna Fluss

Alex Coxon, Freelance writer for Call Centre Helper

The inContact TCO Tool

CONCLUSIONS

Cloud contact center services delivered significantly lower TCO than

comparable premise-based systems for all configurations

• How does your model stack up against national averages?

• Gartner Study – Sept 24, 2012– Average IT Spending as % of Revenue: 3.6%– Average IT Spending as % of Operating Expense: 4.5%– Average IT Spending per employee: $12,708

• 100 Employee Company spends >$1.2m year on IT• $50m Company spends >$1.8m year on IT• Intelisys: $360k year on IT

• What Spend are You Capturing?

Check Your Sanity


• Will completely separate you from the competition

• Done right, removes all the mystery• The “Hard Close” becomes “Assumptive”

– A natural progression to sequence of events

• Takes practice and leadership– Don’t short-cut it– Trust the process

TCO Selling - Summary



“This is the end my beautiful friend.”

tco selling 1.0 intelisys confidential – do not distribute to third parties

Documents

lower tco

tco toolsavoiding

tco process9

tco telephony10

current path tco

important tco principals10

value of tco sellinghow

tco cloud computing11