Many CIOs need to upgrade their aging networks, but are struggling to understand and articulate their new requirements given today's increasingly complex IT environment.
By John Lytle
Until recently, telecom services have been largely viewed as a commodity service with buyers choosing and vendors competing mostly on price. Today’s telecom and network environments, however, are far more complex than most executives realize. Traditional voice and data operations have rapidly evolved into highly complex networks that must deliver ubiquitous connectivity and support mobility integration, internal and external collaboration, and multiple forms of conferencing—all while ensuring data integrity and security.
Network requirements are rapidly evolving, but many buyers of network services are behind the curve of change, with large and aging legacy technology estates and increasingly restricted capital available for a refresh, let alone innovation. Clients struggle to articulate their requirements, while service providers generally do a poor job at communicating their strategic capabilities. As a result, both sides need to move beyond the traditional request for proposal (RFP) and contracting models and develop more innovative approaches.
Mobile services consume an ever-increasing portion of technology spend and are the primary driver behind the growing cost and complexity of network services. Bring your own device (BYOD) and wireless data traffic over mobile devices have been growing and are expected to continue to do so. Demand for wired network capacity will continue to grow by 50 to 100 percent a year, driven by the expanding enterprise use of voice and video collaboration, virtualization, and hosted applications.
Clearly, the stakes are high. ISG benchmarks show that up to 35 percent of a multinational enterprise’s IT budget goes to telephony, which breaks down to include voice (5 to 10 percent of the total), video (5 to 10 percent), data (25 to 35 percent), and mobile telephony services (as much as 45 percent). With increased traffic on wired networks and ever-increasing demand from mobile users with new devices to support, the need for additional bandwidth and improved network management should continue unabated, resulting in new challenges for multinational enterprises.
Managing Mobile Technology
One challenge is addressing the dilemma of how to manage mobile technology. Some enterprises opt to reimburse employees for their purchase of mobile devices. This offers greater flexibility and employee satisfaction by allowing individuals to get their favored devices. The downside is additional challenges in managing security, increased internal admin costs, and loss of marketplace leverage. The alternative is to centrally manage mobile services. This approach limits options, but offers the benefits of leveraging scale, garnering discounts, managing applications or securing data stored on the device, and monitoring a growing business cost more closely.
In choosing their mobile strategy, CIOs need to consider two key factors:
- 1. Corporate culture and strategy. Are you willing to impose choices on Millennials who have strong opinions about their technology? How does that support the long-range plans for business-technology enablement?
- 2. Regulatory and data control issues. Personal and business data will exist on these devices. The question is, How do you separate and secure the devices and data to minimize the legal and regulatory risks to the business and individuals?
Another challenge is that the traditional voice PBX skill-set doesn’t translate well to building, running and integrating a converged voice, video and data network that has to address increasingly complex application and security requirements. Many CIOs don’t understand the capabilities and skill sets needed to manage these complexities, or how to develop them internally, or bring them in from the outside through partners or providers. CIOs who do understand that they have a skills gap face a highly competitive labor market in all geographies, as well as a constant scramble to maintain the right numbers of staff with the right levels of skills.
Network Complexity Keeps Growing
As networks grow in complexity, moreover, true centralized oversight continues to be elusive. Organizations operating in international markets must keep pace with rapid changes in local market costs, capabilities and regulations. The cost of changing a local carrier may be a major consideration due to the potential disruption of day-to-day operations.
A related concern is that many enterprises still have local country procurement practices in place for telecom services, which precludes central commercial, financial and contract management, limiting any ability to leverage global competition for services. Long-range technical and commercial planning is impacted through limited visibility of these relationships, which in turn becomes a risk to large programs such as unified communications and Anything as a Service.