Implementing VoIP without reason
The executive was discussing how his CIO based in USA forced him to go to an expensive VoIP (Voice-over-IP) phone solution that he really didn'tÃt believe he needed neither it was a cost effective alternative to traditional phone system he was using for about 450 voice mailboxes.
The only tangible benefits, he could identify going to VoIP system were:
- Saving on average 4.5 cents per minute on long-distance charges between US and Canada. The call volume is not high.
- Elimination of nominal payment they were making to a third party service provider for managing the changes with voice mailboxes. Such changes in voice mailboxes are infrequent.
Does this seem like a reasonable switchover from traditional phone system to VoIP?
Was there more than just cost-benefit analysis for making the decision?
Hidden Costs of Outsourcing
It appears the relationship between vendor, outsourcer and senior management of North American operations of retail franchise may have also played a part in this decision.
For example, the outsourcer in the name of standardization forced the Canadian operation to take a very expensive high-end hardware component whose functions could have easily be delivered using a reasonably priced model from the same VoIP vendor even after projecting reasonable growth for the Canadian operations.
Obviously, the outsourcer has vested interest in keeping the same hardware component everywhere, which reduces the support cost for outsourcer and maintains its profit margins.
What about the cost of acquiring and maintaining unnecessarily a high-end hardware component for the retail franchise?
Whose bottom line does this higher cost of components show up?
Do customers include such additional expense in cost-benefit analysis of retaining an outsourcer?
Is this trend of focusing on core operations and outsourcing the rest delivering the promised benefits?