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American Mattress Cuts Phone Bills, Improves Communications Efficiency with Hosted IP Communications Solution
Case Study by Appia Communications
BUSINESS CHALLENGE
One of the largest specialty furniture retailers in the nation, family-owned American Mattress offers high-quality products at affordable prices. The company has 200 employees and 87 stores in three regional markets: Chicago, Indiana, and Houston. A warehouse is located in each market.
With its far-flung network of retail stores and warehouses, American Mattress relies heavily on voice and data communications. In 2003, after more than a decade of growth, American Mattress had a Citrix-based data network and a traditional PBX voice system at headquarters with separate POTS lines at retail stores and warehouses. Each facility had its own phone system, dial plan and long-distance carrier.
With so many facilities, American Mattress ran frequent Citrix TELNET sessions to conserve bandwidth and minimize WAN costs. While the data network functioned smoothly, voice communications were costly and inefficient. Phone bills were high because of the volume of intracompany calling. With retail stores in constant contact with headquarters and the warehouses, intracompany calls represented 75 percent of the company�s phone bill.
Moreover, with so many phone plans, administrative costs were high and a unified, interconnected workforce was unachievable. To accommodate its rapid growth, American Mattress needed a more efficient, flexible, and less costly voice network.
�Our phone system had not kept up with the company�s growth,� said American Mattress President Scott Michelsen. �We needed a solution that would cut costs, simplify intra-company calling, and have the flexibility to grow with us.�
NETWORK SOLUTION
By the time it became an Appia Communications partner in 2003, network consultant NE Communications had worked with American Mattress for several years. A Cisco Premier Partner, NE Communications immediately recognized that an Appia hosted solution was an ideal voice solution for the company. Free intracompany calling, minimal overhead cost, and the scalability of IP telephony met the company�s critical needs. As a Cisco Powered Network service provider, Appia offered specialized expertise, greater efficiency, end-to-end security, leading-edge technology and services, and access to nationwide resources.
Each American Mattress retail store has two employees and a single phone line. Because the company conserved bandwidth with Citrix, voice could be added to the WAN using the existing 64K links to retail stores and warehouses. American Mattress employed just one IT manager prior to the conversion and did not want to add staff to manage the new network. Appia�s hosted IP solution not only eliminated the overhead and inconvenience of in-house management, but also increased network reliability and lowered the company�s total cost of ownership of its communications infrastructure. And American Mattress would deal with a single vendor � Appia � instead of many vendors.
To add voice capability to the company�s data network, NE Communications installed a Cisco 3745 router at headquarters and Cisco 1760V-SRST routers at most facilities. The routers are configured with a two-port voice card and a 56K module for connectivity to the WAN. American Mattress is using a range of Cisco IP phones, including the Cisco 7940 and 7960 models, ATA-186s for use with analog phones and faxes, and Cisco 7920 WiFi phones. Cisco network software assures appropriate QoS routing.
BUSINESS VALUE
Appia�s solution has met and exceeded expectations. By eliminating intracompany calling costs and reducing long distance toll charges, American Mattress is saving 40 percent on its overall voice communications costs, or $150,000 annually. IT Manager Andy Merges noted, �Free calls between stores save us a huge amount right there.�
The company�s average long distance rate has declined from an average of 7 cents per minute to 1.7 cents. At this rate of savings, the Appia solution will pay for itself in less than two years, Merges said.
American Mattress has also realized significant soft-cost savings, including a reduction in the company�s total cost of ownership of its IT systems and lower administrative costs by dealing with a single vendor. If there is a question or problem with its phone service, American Mattress makes one call � to Appia.
In addition to cost savings, American Mattress has benefited from the scalability of its Appia solution. The company has opened several new stores since converting to IP communications. Besides phone installation, adding a new facility requires only router and server reconfiguration by NE Communications and Appia.
Organizationally, the IP network�s easy four-digit intra-company dialing unified American Mattress�s widely dispersed workforce. �It�s one thing everyone liked,� Merges said.
The reliability of its voice network is critical to American Mattress. Since the conversion, the company has not experienced a significant outage. The Appia distributed IP network also assures business continuity in the event of an outage at any location. If a store or warehouse goes out, calls can easily be routed to other company facilities.
Michelsen summarized the IP network�s business value, �The Appia hosted IP network has delivered everything promised and then some. Besides sharply cutting our phone bill, it has reduced administrative costs, provided flexibility for future growth, and strengthened our organization.�
FOR MORE INFORMATION
For more information about Appia Communications, visit www.appiaservices.com
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