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David Zimmer

[December 11, 2003]

Unified-View

By David Zimmer


Avaya Forum Barcelona: Optimize Your Enterprise Communications -- Reduce Cost, Lower Risk, Grow Revenue

Avaya recently held its very successful Avaya Forum for its European, Middle-Eastern and African (EMEA) customers.  The venue was beautiful -- Barcelona with all the flare and romance for which the Spanish are known.  It was a great setting with many of the top-level Avaya executives from both Europe and the USA readily available to field customers’ questions.  The theme of the conference was “Reduce Cost – Lower Risk – Grow Revenue.”

Avaya seems genuinely interested in doing all three for its customers. While we are normally skeptical of these sorts of “customer-centric” forums because of the normal marketing hype and sales promotions, we walked away feeling that Avaya had really turned a corner and come to some rather solid business directions and decisions. Each executive spoke with assurance that Avaya was moving in a new direction that would better serve his or her customers. In fact, a statement made by Michael Thurk, Group VP Enterprise Communications, particularly impressed us.

“Listen, we have to do this stuff right.  Communications are our only product.  e study it, we live it, we breath it -- it is what we do. We don’t have any other products to rely on to keep the company afloat, therefore, we have to excel at building better products that meet your needs.”  - Michael Thurk, Avaya

FOCUS ON COMMUNICATION APPLICATIONS SOFTWARE
That is a very powerful statement that sets a course for the future. Thurk added that Avaya is changing from a hardware company to a software company with a new emphasis on “business communications applications.” This means more than just voice or speech-enabling user interfaces to business applications; it means a combination of IP infrastructure, application servers and end-user devices that enable personal contacts to be more effective, which in turn makes the enterprise more productive. We coined the terms “micro-productivity” to measure an individual’s productivity increase and “macro-productivity” to measure the productivity increase across a group or the enterprise as a whole. More importantly, we believe that macro-productivity is where the real ROI payoffs to the enterprise will be made from these new products and technologies.

Just as business process engineering helped us streamline many of our enterprise work flow operations, these new communication applications will improve enterprise accessibility and responsiveness to its customers and supply chain partners -- and that is where the real money is!

So Avaya’s new thrust is “Lower Cost – Reduce Risk – Grow Revenue.” We feel that is the proper mantra for the enterprise market. 

LOWER COSTS: “IS THAT ALL THERE IS?”
We are not sure if “lower cost” alone is truly viable, though. After the economy’s blood-bath of the past years, the budget cuts, the “doing without but still doing the business,” we have trimmed the fat and gotten back to lean operations. Yes, we could probably still shed a few more dollars, just as we could always shed a bit more fat from the body during a diet, but maybe we have reached a good enough state for now. Continuing to focus on cost reduction may cause us to lose sight of a bigger payoff: Grow Revenue.

Avaya now provides the ability to lower technology costs because they are dispensing with expensive, proprietary hardware and leveraging IP technology infrastructure. But that switch introduces the risks of change into any operation -- as the adage states, “If it ain’t broke, don’t fix it.” There are many, perfectly good phone switches, voice mail systems and ACD boxes installed and running. The expense to move to new technology may not be justifiable at this point, plus it could be risky.

Avaya has overcome the “rip and replace” mentality of the past and lowered the risk factor by introducing their Unified Communication Center (UCC) product, along with Professional Services whereby a customer can outsource the care and feeding of enterprise communication technologies systems to Avaya. They have introduced some interesting migration strategies to move their existing customers to the newer platforms. And they have made their newer products work with their older products to make that transition less risky.

END-USER COMMUNICATION NEEDS AND REVENUE GENERATION
But the point that warmed our hearts the most was Avaya’s focus on enabling their customers to grow their revenues, in addition to reducing operational costs. They see that enterprise-wide communications are a very critical ingredient to growing revenues -- just as integral as the manufacturing production of “widgets” or methodologies for delivering services. By providing technology products that make enterprise communications more effective (less phone tag, more responsiveness, faster decisions, fewer missed opportunities), Avaya can help enterprise personnel efficiently and effectively acquire, support and retain customers and make more sales. More sales mean more revenue.

So, we are seeing a shift in emphasis from simply reducing costs to that of group productivity and revenue focus. This is really practical because it moves the enterprise perspective from just technology costs and management toward increasing the operational benefits to its end users and to the bottom-line results of the enterprise. That means a fundamental change in how enterprise planning and deployment of new communication technologies will take place. Rather than focusing on technology administration, hardware consolidation, packing more users onto one server, lowering the cost of handsets and disk storage -- which inherently have limited payoffs, we can begin to focus on more unlimited operational activities and payoffs.

Part 2

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