July/August 2001

BY MARC ROBINS

Yes, investors have been burned, and fortunes have been lost. It's enough to make a sourpuss out of the most optimistic among us. But unfortunately, amid all the gloom and doom surrounding the service provider marketplace, logic and reality have been obscured by a sort of mob mentality.

THE VALUE OF OUTSOURCING
The concept of outsourced communications services is just as valid today as it was two years ago. Granted, market conditions have affected the way such businesses are set up and run, but ironically, market conditions are also setting the stage for some CASP offerings to flourish. I thought it might be helpful to review some of the key reasons why outsourced communications services are still worth believing in.

Outsourcing Helps Control Costs
Cost cutting seems to be all the rage right now, as every business is scrambling to cut expenses in order to bring payables in line with receivables. Managers are under incredible pressure to rein in costs, and are also delaying or outright canceling planned expenditures on new technology, new marketing initiatives, and new hires. By outsourcing communications services, enterprises can eliminate a number of capital expenses, and many related costs associated with the acquisition of new communications technology.

Outsourcing Lets Businesses Focus on Their Core Competencies
The need to effectively compete and gain competitive advantages hasn't been affected by the economic slowdown. Outsourcing the care and feeding of communications systems can free up staff to focus on tasks that directly contribute to improvements in productivity and profitability. With fewer "distractions," companies will find their time-to-market with new products or services is reduced, and they become more agile competitors.

Outsourcing Provides Freedom from Obsolescence
All outright technology purchases have a limited lifespan. Phone and messaging systems generally last longer than PCs, but even in telephony the pace of change has been accelerating to the point where new generations of products -- especially IP-based solutions -- are appearing every six months. Outsourcing can insulate a business from the pain of dealing with obsolete technology.

Outsourcing Lets Businesses Take Advantage of New Technologies and Applications
Many legacy communication systems lock users into static feature sets, and are extremely difficult to upgrade. By outsourcing, businesses can add new features and capabilities to their communications arsenals -- oftentimes preserving their investments in existing systems. In addition, users are able to immediately enjoy the benefits of new, advanced services as new technologies and applications are implemented by their service providers.

Outsourcing Alleviates Staffing Woes
Even in these tough times, there is still huge demand for skilled IT personnel. Outsourcing communications services can reduce or eliminate the need to hire and assign dedicated staff to manage and maintain in-house systems, perform upgrades, handle moves and changes, etc., especially with new services that provide Web-based management and provisioning capabilities.

Certainly, there are many other ways an outsourcing strategy can aid a company's bottom line, and I don't pretend to have covered them all. What's clear is that in a time when most companies are hesitant to spend any money, the value proposition for CASPs is ascendant. Business managers are eager to investigate the cost advantages an outsourcing strategy provides them, and are wide open to alternatives.

Marc Robins is Vice President of Publications, Associate Group Publisher, and Group Editorial Director for Technology Marketing Corporation. His Change Agent column appears in each issue of Communications ASP magazine. Marc appreciates your feedback, and may be reached via e-mail at mrobins@tmcnet.com.

[ Return To The July/August 2001 Table Of Contents ]