Reaching the Next Level

Technology and communications solutions play a critical role in enabling the

enterprises to face the challenges of globalization, heightened competition, and

demanding customers. Thanks to this, increasingly, the ICT strategy has become

an integral part of the business strategy of enterprises.

Reflecting this trend in the V&D -IDC Enterprise Communications Priorities

Survey 2008, there has been an increase of 27% in the average IT spend, and

22.3% increase in the average telecom spend of enterprises. Average telecom

spend had recorded an increase of 20% in FY 2006-07, and this year this figure

has gone up to 22.3%, reflecting the growing importance of being connected.

BPO continues to be at the forefront of telecom adoption with the highest

average telecom spend of 0.17% of turnover. BFSI on the other hand reported an

average ICT spend of 1% of turnover, and 0.87% of turnover as average IT spend

of an enterprise.

As enterprises are growing and increasing in size, multiple access

technologies have become the order of the day since staying connected has become

a crucial business enabler. According to the survey, on an average, respondents

adopt eight access technologies to enable connectivity at all times. Domestic

leased lines along with DSL are the two access technologies that have the

highest penetration, with around 60% of the companies having adopted them.

In keeping with last year's trend, around 60% of companies have gone for

domestic leased lines, and around the same number of companies have opted for

PSTN. The pharma segment is the biggest user of DSL, followed by IT and

manufacturing. On the other hand, VSAT is clearly popular with retail and BFSI,

with almost 50% of the respondents using this technology.

One of the most interesting trends to emerge in the survey is an increased

adoption of audio-video conferencing. Audio-video conferencing and web

conferencing have clearly found favor with the enterprise segment with 59% of

the respondents having opted for them. IT, followed by the BPO vertical, is the

biggest adopter of this technology. This is in keeping with the trend to opt for

technologies to reduce operational costs.

Application hosting, comprising ERP, CRM, and SCM, has an overall penetration

of 53%. Wireless LAN and VPN recorded a penetration of 51% and 49%,

respectively.

Application hosting is likely to retain the momentum and is the priority in

the top five technologies in which enterprises are looking to invest. This is

followed by domestic leased line-local, domestic leased line, DSL, and ISDN.

While VoIP and international leased line remain priorities for the BPO

segment, PSTN-dial up will be the focus of the retail vertical. ISDN followed by

VPN-MPLS will be the focus of the BFSI segment.

Choosing Service Providers



Choosing the right service provider is extremely critical for an enterprise

since it is important that service providers understand the business needs of

enterprises, and are able to work together to meet the business objectives.

While selection of the service provider, and the ability of a service

provider to take end-to-end responsibility is the most important factor for an

enterprise, the second most important factor is predictability, followed by

network robustness, reliability, and redundancy. This is followed by the service

provider's ability to understand the requirements of business connectivity of

that particular vertical. Geographical coverage, billing and support, past

experience of the vendor, and proactive network management are some of the other

factors affecting the selection of service providers.

The decision-making process continues to be centralized in most enterprises.

For 83% of the firms, it is centralized at the head office, while the rest take

the decision at regional offices. CTO/CIO and IT heads remain primary decision

makers with 61% of the respondents claiming the same. Managing director, CEO,

and COO come a close second with around 38% saying that they are the decision

makers.

There is an increasing recognition that communications is different from IT.

Last year around 80% of the respondents claimed that the group that manages

enterprise voice communications also manages IT or Internet services in the

organizations. This year there is a drop in this percentage with around 60% of

the enterprises claiming that voice communication is managed by the same group

that manages IT and Internet services. Around 27% of the respondents now claim

that there is a separate group to manage voice communication. However, 13% of

the enterprises interviewed for the survey feel that though they have a separate

group, some overlap does exist between the two groups. IT division staff however

remain the top influencer for ICT purchase in an organization, with around 76%

of the enterprises recording this.

And the Winner is MTNL



There has been a significant change since last year. In the previous year's

survey, VSNL (now Tata Communications) was ranked highest on satisfaction by

enterprises. This year though, MTNL took the crown. There were five parameters

in the survey: overall satisfaction, overall pre-implementation, overall

implementation, overall network, and overall maintenance. MTNL scored the

highest in all these parameters. And this comes as a bigger surprise since MTNL

has operations only in two cities: Mumbai and Delhi.

Maintenance support, customer care, and billing were given the maximum

weightage while calculating overall satisfaction with 30.7%, and network quality

and QoS were given weightage of 25.9%, followed by the implementation and

pre-implementation stage which got 21.9% and 21.5%, respectively. 'Service

outage' and 'knowledgeable representative' were concern areas.

At #2 in the survey is Reliance Communications, which has scored the second

highest in all the parameters except overall implementation, where Airtel is at

the second position. Reliance has scored high in solution fit assessment by the

service provider, overall connection throughput, specific equipments and

software, type of backup guarantees, and solutions provided. However, overall

cost of the service, time taken to resolve issues, and network design suggested

by the service provider are concern areas.

Overall cost of service, service outage, functioning of the network design,

and time taken to resolve issues are some of the issues plaguing Tata

Communications as well. The company should leverage knowledge and skills of

account support teams and network designs suggested by the service.

According to the survey, Bharti Airtel needs to leverage on the knowledge and

skills of account support teams; network designs suggested by the service

provider; functioning of the network designs; and overall billing integrity.

BSNL is at the bottom of the satisfaction survey and has scored low across

all parameters. Knowledge and skills of the account support team and service

outage are some of the concern areas for the company. The company clearly needs

to focus on the requirements of the enterprise segment to increase its

satisfaction quotient among its customers.

About 54% of the respondents don't have SLA, signed with the service

provider, while 44% have signed, and 2% of enterprises are planning to sign.

The Hurdles



While earlier it was a major cause for concern, resistance of employees to

adoption of new technologies didn't feature as a concern area for any vertical.

Not surprisingly, connecting customers or suppliers remains the top challenge

for the enterprises across all verticals. Lack of after-sales services and

scalability of technology are other areas of concern. Management of network and

increased network requirements due to expansion in remote areas are also

challenges faced by the enterprises.

Connecting customers to suppliers remains the top most challenge for both the

manufacturing and IT verticals. On the other hand, managing networks is the

biggest challenge of the BFSI segment. The vendors should focus on these points

to increase their presence in the enterprise space.

Practice of Outsourcing



For many enterprises, outsourcing of ICT management is a strategic decision

to stay agile while being operations centric. Companies now want to focus on

their core competency and this is effectively achieved by outsourcing their

non-core operations like ICT. The trend is especially evident in larger

enterprises.

Overall, price and post-sales support are the most important criteria for the

selection of outsourcing service providers. Apart from that, reputation of the

company and the total solutions provided are the other important aspects. This

trend is reflected in all the other verticals as well. Around 36% of respondents

are outsourcing domestic leased line management, and 27% VoIP/IP management and

VPN management. Mobility applications management is the least outsourced at 17%.

VPN technology is on the agenda of many firms, with about 6% firms looking at

outsourcing VPN technology in the near future. In the pharma vertical however

14% of the respondents said they would be outsourcing VSAT and VPN management.

Outsourcing of mobility applications management is in the roadmap of the retail

segment as well, with 8% of the respondents from this vertical citing this as

their future plan.

The vendors have to go beyond pure service delivery and SLAs, and have to

come out with offerings and solutions that cater to the specific challenges and

requirements of the vertical. These solutions will go a long way in increasing

the real and the perceived value of communications to an enterprise.

Gagandeep Kaur



gagandeepk@cybermedia.co.in