The Seamless Enterprise

Comprehensive news and discussion of enterprise communications and converged network solutions.

The Cost of Convergence vs. Non-Convergence

on May 18, 2012 by Editor

Have you ever worked for someone who couldn't quite grasp the concept of "investment?" I know I have. I won't name names, but this guy, the owner of the company, looked at everything as a cost

Despite the fact that his salespeople could close sales and bring in revenue when they hit the road, he didn't see their travel as an investment that yielded more revenue. Couldn't they just stay in the office and make phone calls?

It was all about the expenditures rather than the revenue. For the salespeople, when they did get the OK to visit customers and prospects, that meant staying in some pretty questionable (but cheap!) motels along the way, and woe to the salesperson who tried to expense more than about $12 (with tip!) for dinner after a hard day of work.

This owner may have been an extreme case, but there's an element of that tendency to dwell on costs in the majority of executives. It is healthy in small doses, because no company should waste money. But when it obscures the revenue opportunities, it can be a real hindrance to the company's growth.

Moving to a converged network does involve costs, but these are truly investments, and their return makes the move worthwhile in almost every case. In the second in a series of white papers about convergence, Michael Suby of Frost & Sullivan addresses why and how convergence pays off.

The white paper, titled Simplification Through Convergence: Reducing Cost and Complexities, is written in a way that can appeal to non-technical executives. This is the kind of jargon-free document that you'd find helpful to give to them to help them understand both the technology and the reasons why you are pushing for convergence and UC.

Suby sets the stage for the cost discussion when he says, "If the cost of convergence exceeds the cost of non-convergence, the business journey to a higher tier of information velocity (information moving fast enough to get you what you need, when you need it, wherever you are) starts with a financial deficit. This deficit, however, need not be a hurdle, as convergence generates immediate and recurring cost savings in many areas.

He goes on to explain convergence and how the converged network handles data, voice, and video so much more efficiently than traditional traffic-specific networks. He details how cost savings are achieved through bandwidth utilization and through SIP Trunking, with its replacement of  traditional telco trunks, aggregation of  traffic, and extension of PBX functionality out to the network.

He also touches on mobile integration and UC and collaboration before revisiting the cost question with this unambiguous point.

"The business case for convergence can be narrowed down to two elements. First, does convergence help your business compete? The answer is, definitely. Second, is the cost of convergence a financial barrier? The answer is no. A driving force of convergence is simplification. Through simplification, obsolete and expensive technologies are retired. Moving your business forward without risking the bottom line, convergence represents a compelling value proposition."

Other white papers in this series:
Technology Convergence and Information Velocity: The Engines for Business Agility and Workforce Productivity

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About the Author

The editor of the Seamless Enterprise oversees the content of the blog, as well as writes individual posts on issues related to convergence, network management and security, collaboration, mobility and connectivity. Editorial duties are secondary to the editor's main job, which is engineering, designing, marketing, and managing network services for the enterprise.


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