Mitel’s Compelling Case for Managed Services

An Editorial Series Sponsored By Mitel Networks

When Mitel Networks (http://www.mitel.com) acquired Inter-Tel in August 2007, the result was not just the largest PBX provider for the SMB market in the U.S. (and the largest in the U.K.). Even more impressive is the companies' combined expertise in the managed services market and the ability to provide a complete end-to-end customized communications solution, including hardware, software, network planning and provisioning, and carrier services, along with service and support, for a fixed monthly fee under its TotalSolution plan.

Rick Dell, Vice President of Sales for Mitel U.S., says, Several years ago we started asking customers what they truly wanted to gain from a communications provider. Our understanding was that the industry migrated away from comprehensive solutions providers to mere commodity technology sellers. Corporate IT departments are now burdened with handling communications platform acquisitions, and they do ensure that the core communications are met. However, IT departments don't usually look at how a new communications platform can be made to favorably impact an organization's six cost centers, which we define as Operations, Facilities, Administration, Human Resources, Infrastructure and Sales. Each of these cost centers requires distinctly different applications and present distinctly different opportunities relative to the way a communications platform can assist them in driving efficiency or reducing costs.

Our customers tell us that they really want to leverage a single communications solution that works for them, not a complex medley involving multiple vendors that they must waste time and effort managing day-to-day, says Dell. Mitel's Managed Services program can take customers out of the phone business and enable them to get back to what they're supposed to be doing, which is generating revenues, profits, and cash flow from their own operations.

Every vendor uses the term managed services to describe a specific facet of what they do, but Mitel's Managed Services program greatly differs from those of other vendors. It goes a lot 'deeper' in helping organizations than other attempts at offering a managed service.

Dell elaborates: First, our sales executives undergo a very intensive training process to understand the customer's business processes and how our solutions can impact business performance. The very nature of this mandates that we must be accountable to the customer every single day, for the life of the contract. That's because part of what our Managed Services brings to the table is really a consultative edge, not only for core communications but for business in general. We understand how the products and services we bring to bear within the market will affect not only the infrastructure of a customer's communication environment but the business facet as well. That involves making sure that we're actively engaged with the heads of each of the six costs centers to ensure that Mitel both understands their specific business needs and that we deliver solutions that tangibly impact their day-to-day operations from both a productivity and efficiency perspective.

To illustrate Mitel's acuity in delivering tools that serve real-world business issues, Dell discussed how contact center software is typically sold to customers.

Too often a group of telephony VARs will ask an IT manager about the objectives of a new communications system, says Dell, and he'll say that the sales department needs a call center package. The VARs never talk to anybody in Sales about what their needs and goals are, and so they end up just replacing one piece of hardware or one application with another that basically does the same thing. The customer thus loses the advantage and long-term benefit of what a new technology brings. That's why Mitel's Managed Services people dive in and talk to department leaders to see what their challenges are. We typically find that every customer has three basic needs: First, they need to generate sales. Second, they need to control their costs. Third, they need to simplify their operations. Managed Services gives them the ability to tailor and leverage the appropriate technology to satisfy their needs and accomplish their goals.

But above all, almost all of our customers want the option of 'getting out of the telephone business', says Dell. They want to take advantage of the products, the services, the applications and the technology that's afforded in telecom to improve their business, but they don't necessarily want to manage a telecom environment. And when we tie that concept of Managed Services together with the various financial vehicles that we bring to the table, it really puts our customers in a position where they can gain all of the advantages of telecom system ownership without the risks.

The first of these risks is obsolescence, says Dell. Some customers buy a platform from our competitors and then that platform becomes obsolete - because of industry changes, sudden growth in the company or the appearance of innovative new technologies - and the customer is tied to it, without the option to upgrade or enhance that technology. Fortunately, thanks to an obsolescence provision, Mitel's Managed Services customers are never in such a position if they've purchased a platform from us. Our no-penalty upgrade provision within the TotalSolution Plan gives customers a very high sense of security, especially in a very rapidly changing technology industry.

Dell continues: The second risk involves cash flow. In the past, a customer deploying a new phone system assumed that it had a useful life of anywhere from five to eight or more years. Today that isn't necessarily the case. Voice is now a form of real-time data, and so telecom processes are more and more driven by the data environment and are now increasingly subject to the same rapid change of pace found in the data communications world. If, two years into ownership, a customer needs to greatly expand and is now suddenly looking at a $75,000 charge to add a new department, cash flow can become an issue.

Fortunately, one of the things we do under Managed Services is to 'even out' that cash flow environment with our TotalSolution plan, says Dell. Our customer knows that if they're adding any component to a telephony platform - whether it's a physical endpoint, an additional T1 span, or more applications - there are fixed monthly prices associated with these. For example, the cost of adding a physical endpoint may be $18 a month, which is inclusive of the original labor to set it up. It's billed on a monthly basis, regardless of whether the endpoint is added in the first month of ownership or the final month of ownership. That's because our approach is one of providing a service, not just selling a piece of hardware. We're tied to our customers literally every 30 days; if we don't perform, they have recourse, because they write the check. We literally earn their business on a 30-day cycle.

Today, Mitel's Managed Services program is such a compelling proposition that about 75 percent of all our transactions are done in this manner, beams Dell.

Yes, Mitel's managed services enable customers to securely rely on one source for their communications needs so they can get back to doing what they do best - run their businesses.

Richard Grigonis is Executive Editor of TMC's IP Communications Group.

Selling Managed Services Is About Understanding Business Needs, Not

By Rick Dell, Senior Vice President, Mitel U.S.

Oftentimes, those of us who work in the communications industry become completely enamored with the how and the why. The how is readily apparent: many of us like to understand the inner workings of the technology, what new features it delivers and how it is noticeably better than previous technology.

Addressing the why becomes a little bit fuzzier. Whenever customers want to understand why certain technologies or applications are better suited for their businesses, the customary response is to articulate the benefits in terms of pure communications, which is only natural, considering that we do sell communications systems. A response like …you'll be able to enjoy five-digit transferring between remote sites, or …running voice communications over your data network is much more efficient… makes complete sense from a technology perspective. But are we really providing answers that are truly germane to the way individual companies operate?

In a managed services environment, the why changes constantly, depending on the individual we're talking to and what their particular business needs are.

In a true managed services deployment, defined as a vendor that can deliver a comprehensive and complete end-to-end solution, including hardware, software, applications, carrier services, maintenance and support - all for a fixed monthly fee - success is not necessarily defined by traditional telecom metrics like network performance and feature sets. Instead, customer satisfaction is often measured by the quantifiable and tangible improvements experienced through traditional business processes, like generating leads, shortening sales cycles, increasing inventory turns, improving response time to customers and reducing travel costs. Though these processes are common to most organizations, every business is different, with unique challenges and opportunities.

The key to successful managed services selling goes far beyond a typical telecom sales call, where basically we ask the customer how many lines and how many phones do you need? Instead, a true managed services program takes the customer out of the telephony business and allows he or she to focus on what they do best: run the business.

In order to sell a managed services solution, sales people need to peel back the onion, and ask intelligent questions to help gain a deep understanding of the ways customers specifically manage their businesses.

Take a close look at a sales operation. Do they rely on an inside sales force, outside reps, or a combination of the two? What is the length of their typical sales cycle? How do they go about generating leads and presenting proposals?

At the onset, questions like these may seem out of place in a technology sales environment, yet they give a vendor excellent visibility into the inner workings of the customer. As a result, a savvy sales professional can then suggest a solution that specifically addresses these challenges, like a collaboration application that enables mobile sales representatives to initiate conference calls or deliver sales presentations on the fly. Or advanced call routing features that ensure top customers receive specialized care.

The same paradigms hold true in other departments. Perhaps a remote support application allows an IT department to install or repair software remotely, as opposed to enduring the expense of sending a technician. Or the use of IP networking enables a valued employee to work at home, ensuring the organization's productivity while keeping a loyal team member happy and effective. And when the customer factors in the benefits of a fixed monthly fee, ability to migrate to new technology at their discretion and the convenience of having the entire solution professionally managed, managed services becomes even more compelling.

Selling a solutions-oriented managed services program may take different skills than what is currently used to sell technology. But the long-term benefits that can be achieved - for both the vendor and the customer - make the effort worthwhile.

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