Business Value Assessment

Transcription

1 Business Value Assessment Pall Corporation Transforms Communications Processes for Greater Efficiency, Productivity, and Savings; Projects Net Benefits of $5.5M Business Value Assessment conducted by HIGHLIGHTS Challenge: Pall Corporation, a global leader in fluid and gas filtration products, needed to transform its communications processes to improve efficiency, productivity, and reduce costs. Solution: Pall implemented an open, SIP-based, unified communications solution from Unify. The deployment included OpenScape Voice running on an OpenScape UC Server to serve the company s 10,000-plus workforce. The project deployed more than 8,000 SIP phones at more than 75 locations. Result: Pall is on track to realize net benefits totaling $5.5M over five years from its investment in OpenScape Voice and UC. The savings which average 32% across the board, including telephony costs encompass significant reductions in phone toll charges, staffing costs, and third-party maintenance fees. The company is expected to earn a 53% return on its initial net investment of $1.89M. Known as the the original green technology company, Pall Corporation is a global leader in the high-tech filtration, separation, and purification industry. Led by engineers with a green ethos, Pall has grown into a $2.7 billion company with more than 11,000 employees dedicated to helping organizations ranging from municipal water suppliers to hospitals to airlines solve complex fluid management challenges for better health and safety. In 2008, Pall saw an opportunity to improve efficiency and capture savings by streamlining its intercontinental communications infrastructure. The company had been grappling with rising costs and operational complexities associated with the infrastructure, which provides voice, messaging, and collaboration services to its thousands of employees worldwide. At the core of the challenge was the system s outmoded technology and fragmented design, with each location separately managing and maintaining its own phone system and related services. The original architecture included a multi-vendor mix of voice, messaging, and collaboration services that relied on older-generation PBX technology and lacked useful features such as one-number call routing, voice messages to , and interoperability with mobile phone services. Overhead costs were hard to control because the systems lacked a common set of equipment and standards, forcing each region to field its own team of maintenance workers. Expensive contracts with outside maintenance firms were the norm. 1

2 Pall set out to find a more efficient solution, one that would reduce communications costs while simultaneously improving productivity and service levels at its nearly 80 international offices and facilities. We made a decision to transform our communications processes to improve efficiency and collaboration and to reduce costs, said Pall Corporation CIO Eash Sanduram. We needed a partner that could support us on a global scale, and we wanted a proven solution that we could standardize on. In addition, by migrating to a single integrated communications infrastructure worldwide, Pall hoped to significantly improve management visibility into its overall business operations for better decisionmaking and operational control. With heightened visibility, costs associated with operating and maintaining its telephony, messaging, and collaborations systems would become easier to track and adjust. Unify Openscape Solution Following a thorough review of the latest communications technologies, Pall chose to migrate its mix of PBX systems to a single, globally standardized SIP-based unified communications platform from Unify. 1 The initiative consolidated more than 75 offices on a global wide area network (WAN), deployed more than 8,000 new IP phones, and implemented new communications applications, including OpenScape Voice, OpenScape UC Application, and OpenScape Xpressions. Scope of Deployment: The table below shows the scope of the deployment, including the office sites and endpoints or communications ports affected in each region. Moving to a software-based communications model enabled Pall to deploy and manage its voice network in a datacenter environment, the same way it was managing its other business applications. The open platform was also simpler to administer and maintain compared to conventional PBX phone systems. The cost of the new infrastructure, including hardware, software, and services, totaled $5.4 million. Pall completed the first phase of its Unify OpenScape deployment in November 2011, which encompasses the new SIP-based telephony network across the company s three regions (North and South America; Asia-Pacific; and Europe, the Middle East, and Africa). With phase one complete, the company plans to roll out OpenScape solutions for audio and video conferencing, which is expected to drive further investment returns by reducing the cost of audio and video conferencing. 2 This phase will add Lotus Fusion integration, which integrates automated identity management for greater security and compliance efficiency. Beginning in January 2012, Lotus Fusion will be embedded within all Unify OpenScape UC Servers. Business Benefits An assessment by Mainstay Partners has projected approximately $5.2 million in net benefits and savings over five years from Pall s investment in Unify s OpenScape. Key sources of savings include significantly lower maintenance costs and staffing, reduced local and long-distance tolls, and more economical administration of phone setups and changes. The company also realized a range of related benefits, among them higher system reliability, enhanced data-networking capacity, and more efficient inter-region team collaboration. The following sections discuss annual savings and benefits the company has gained since deploying the OpenScape platform. Scope of Deployment Region Total Number of Endpoints Before After Asia Pacific 1,263 1,650 Europe, Middle East, Africa 2,827 2,908 Western Hemisphere 3,953 3,874 Total 8,043 8,432 We made a decision to transform our communications processes to improve efficiency and collaboration and to reduce costs. We needed a partner that could support us on a global scale, and we wanted a proven solution that we could standardize on. Eash Sanduram, CIO, Pall Corporation 1 SIP (Session Initiation Protocol) is a signaling protocol widely used for controlling multimedia communications sessions such as voice and video calls over Internet Protocol (IP). 2 Expected savings from migrating to Unify s audio and Web collaboration applications are not included in this study s ROI analysis. 2

3 $310K Annual Reduction in Phone Tolls The new SIP-based, unified communications system allows Pall to route most internal phone calls over the same WAN (wide area network), all but eliminating toll charges for local, long-distance, and international calls. 3 In addition, by routing internal calls over a single WAN environment, phone service quality and reliability has become more consistent than before. According to the Mainstay Partners assessment, the unified communications platform is helping Pall cut its toll charges by an estimated $310K per year. 4 $44K Annual Savings in Local Line and Circuit Expenses Already Pall has witnessed an additional 8% reduction about $44K per year in expenses related to local phone lines and circuits due to renegotiated rates. Company executives say that further savings as much as 24% are possible in regions that can switch to SIP-trunking 5 services. $275K Lower Maintenance Costs Migrating to a single-vendor global platform enables Pall to dramatically simplify its maintenance agreements worldwide by cutting costs for its outside maintenance agreements by 34%. Instead of a series of local maintenance contracts, Pall now takes advantage of a single global contract for ongoing phone system servicing and upgrades. The system s comprehensive global warranty program added to the savings by lowering the cost of fixing and replacing faulty gear by 37%. In general, executives said that OpenScape s software-based environment is easier and less expensive to maintain. Implementing software upgrades, for example, is simpler (and cheaper) compared to replacing PBX hardware. Similarly, supporting the platform s centralized network voic service is easier than managing an assortment of local voic systems. Our SIP-based communications infrastructure is inherently more cost efficient, said Pall IT Director Josephine Ciurleo. We are even finding that we need fewer physical phones because the UC environment allows more of our workforce to go virtual. 94% Reduction in Move-Add-Change- Disconnect (MACD) Expenses Directly after the move, Pall saw immediate savings in the form of lower costs for phone-number setups and administration. Previously, offices running PBX systems paid as much as $200 to set up a new phone, move a number to a new location, or discontinue service expenses that have been eliminated now that MACD orders can be handled with a few mouse clicks. 6 Since the switch to Unify s Unified Communications, the company is on track to save about $89K per year on MACD and related maintenance costs. $614K Reduction in Internal and External Staffing Costs Among the most significant findings, the globally standardized SIP-based communications platform is paying off by enabling Pall to optimize its support staff worldwide. After migrating to OpenScape, the company found it could reduce or redeploy slightly more than half of its internal phone-support personnel around the world, saving about $314K per year. It also eliminated much of its reliance on outsourced phone-support staffing, saving another $300K per year. Today we have one global team to manage our communications infrastructure, Ciurleo says. IT teams can go anywhere in the world to help maintain the system. With our standardized global deployment, everything looks the same. 3 The company routes calls through its WAN to the maximum extent possible, using external networks (and incurring tolls) only at the tail end of the call. 4 This does not include savings from the company s global dialing plan and least-cost routing system. 5 SIP is Session Initiation Protocol. 6 In a PBX environment, phone number moves and changes typically require a technician to move or replace physical cards. 7 These indirect and strategic benefits were not included in the study s ROI calculations. 3

4 Today we have one global team to manage our communications infrastructure. IT teams can go anywhere in the world to help maintain the system. With our standardized global deployment, everything looks the same. Josephine Ciurleo, IT Director, Pall Corporation Indirect and Strategic Benefits The assessment identified a number of indirect and strategic benefits resulting from the switch to OpenScape. 7 Among the most significant: Global System Visibility. The single integrated platform gives management detailed visibility into communications operations worldwide. Built-in reporting tools help the company track system assets and usage, plan for capacity needs, and control communications expenses. Enhanced Data Services. The company s upgrade to a global WAN allowed it to significantly expand and enhance its data and telephony services, which share the same converged communications network. Economical Office Expansion. Adding voice and data services to new office locations is significantly easier and less costly in the SIP environment. Green Savings. The software-based communications infrastructure requires less power and cooling, saves on energy bills, reduces CO2 tonnage, and promotes environmental responsibility. Soft Savings Pall also stands to gain an array of softer benefits from the OpenScape solution, including greater employee convenience and connectivity. These improvements, while hard to quantify, will benefit the company by promoting workforce engagement and satisfaction and spurring collaboration. Pall expects to boost productivity further by exploiting the voice solution s ability to support multiple locations. This will enable mobile workers to access the same features as employees working in the company s offices or on the manufacturing floor. The open solution also makes it possible for Pall to add new applications easily, a factor that could contribute substantial savings depending on how much it decides to invest in new software products to support growth and adapt to changing business conditions. Over time, these soft savings could be almost as compelling as the initial savings from lower telephony expenses and administrative streamlining. Future Savings Looking ahead, Pall expects to garner additional benefits by rolling out SIP-based collaboration systems, including audio and video conferencing tools. Growing adoption of these network conferencing systems in the international business world will help Pall phase out fees and premiums paid to conference service providers and generate additional savings by reducing the need for business travel. Pall is also evaluating the use of SIP trunking in locations where it s available including North America, Europe, and parts of Asia to further lower telephony expenses by as much as 20% to 30%. It also is looking at employing virtualization technology to consolidate voice and data storage, thereby improving management of system capacity and costs. Other plans call for boosting IP compression performance and generating savings by converging voice and data on a single leased line. Overall, Pall will continue to pursue ways to direct more communications traffic, including faxes, over the corporate network to further lower costs. 4

5 ROI Analysis According to the assessment, Pall is on track to save approximately $1.54 million per year (net present value) as a result of the move to the global Unify s UC platform. Factoring in its net capital investment of $1.89 million on UC equipment, software, and services 8, Pall is projected to realize a return on investment of 53%. Based on hard savings alone, Pall will break even after 35 months. Figure 1 breaks down the annual costs before and after deploying the OpenScape platform. Figure 2 summarizes the costs and benefits used to calculate the ROI. Our SIP-based communications infrastructure is inherently more cost efficient. We are even finding that we need fewer physical phones because the UC environment allows more of our workforce to go virtual. Josephine Ciurleo, IT Director, Pall Corporation Figure 1: Annual Operational Costs Before and After Deployment of Unify s OpenScape Annual Operational Costs $4.5M $4.0M $3.5M $3.0M $2.5M $2.0M $1.5M $1.0M $0.5M $0.0M $0.80M $0.61M $0.30M $0.84M $0.54M $1.02M Before $0.10M $0.11M $0.53M $0.29M $0.53M $0.50M $1.35M with SEN Third-party maintenance MACDs Internal resources External resources Calls: local, local toll, long distance, international Local line and circuit expenses Break-fixes and replacements Data network service Audio conferences Figure 2: ROI and Breakeven Summary: Estimated 5-year ROI of 53% on Capital Investment of $5.4M USD Metric Value Total number of endpoints 8,432 Old system replacement cost avoidance Old system annual normalized OPEX Total capital investment Net capital investment (UC vs. old) Annual OPEX Breakeven period $3.52M $4.78M $5.40M $1.89M $3.22M 35 months ROI (5 years) 53% Total net savings (5 years) $5.19M (NPV: $2.84M) NOTES: Breakeven Period: Amount of time needed to recoup 100% of the capital investment (i.e., Total Savings = Capital Investment) ROI: Net savings as a percentage of the capital investment. A ROI greater than 0 represents additional savings on top of recovering all of the capital investment. Example: Invest $1.00, get $1.50 back, ROI = 50% About Mainstay Research and analysis for this study was conducted by Mainstay, an independent consulting firm that has performed over 600 studies for leading information technology providers including Cisco, Oracle, SAP, Microsoft, Dell, Lexmark, HP, EMC and NetApp. This case study was based on interviews with executives currently using third party management solutions, including Unify. Information contained in the publication has been obtained from sources considered reliable, but is not warranted by Mainstay. 8 Net capital investment figure accounts for the fact that the company would have needed to invest approximately $4.4M to upgrade its existing PBX infrastructure. 5

6 About Unify Unify is one of the world s leading communications software and services firms, providing integrated communications solutions for approximately 75 percent of the Fortune Global 500. Our solutions unify multiple networks, devices and applications into one easy-to-use platform that allows teams to engage in rich and meaningful conversations. The result is a transformation of how the enterprise communicates and collaborates that amplifies collective effort, energizes the business, and enhances business performance. Unify has a strong heritage of product reliability, innovation, open standards and security. unify.com Copyright Unify Software and Solutions GmbH & Co. KG, 2016 Mies-van-der-Rohe-Strasse 6, Munich, Germany All rights reserved. The information provided in this document contains merely general descriptions or characteristics of performance which in case of actual use do not always apply as described or which may change as a result of further development of the products. An obligation to provide the respective characteristics shall only exist if expressly agreed in the terms of contract. Availability and technical specifications are subject to change without notice. Unify, OpenScape, OpenStage and HiPath are registered trademarks of Unify Software and Solutions GmbH & Co. KG. All other company, brand, product and service names are trademarks or registered trademarks of their respective holders.