Text Box: Page 3 ò Return to Page 1 Text Box: STC LINES—July 2005 Text Box: Weighing IP Phone System Proposals on a TCO Scale (From Page 1) Text Box: While customers may prefer to buy their own hardware and may even be able to get better prices, the cost of this additional hardware and its installation and maintenance needs to be included in the TCO analysis. Meeting Specified Architecture Requirements Architecture requirements in our RFP were very rigid. We needed to support two sites and clearly specified the redundancy/reliability factors we needed at each. One respondent assumed we were in a campus environment and would have a broadband connection between the two sites, which was not our topology. In this case a true pricing comparison would have required that we add in the cost of such a broadband connection. In other cases respondents used a server at one location to provide redundancy for the server at the other location despite our request for redundant servers at each site. An apples-to-apples comparison would require either an additional quote from these respondents or an estimate of the extra server charges added to the TCO spreadsheet. Comparing Proposed E9-1-1 Solutions E9-1-1 functionality required extra effort to develop accurate comparisons. The RFP clearly asked for the ability to track and automat-ically report station movement down to the jack level, to the PSAP. First, we found a great deal of provider ambiguity in terms of the specific functionality. In fact, it required some effort to pin down the capabilities actually included in the price quote. (Some respondents added more hardware and software as we pressed this issue.) The second factor was that some could not comply. Although we have

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not seen or developed a methodology  for evaluating the financial risk of not having a robust E9-1-1 capability, there could be some cost applied to this risk.

      Clearly, not applying any penalty to providers who don’t offer it, while incurring costs from others who do offer it, is not a best practice. Alternatively, one could include the cost of a third party solution for those respondents who do not fully comply.

Implementation Issues

      It is important to specify the functions desired as part of implement-ation in order to ensure comparable services.  Very often this is listed as a single line item called “installation” and this may not cover all the elements you need. Elements of particular importance to break out are:

¨ Network Assessment (Readiness for IP Telephony)

¨ Project Management

¨ Training (End user and administra-tor; classroom or PC-based)

      Another issue to watch closely is the inclusion of some costs in implementation that relate to product or service elements. In our exercise we found two such additions:

¨ One respondent included their uplift charges for 24x7 coverage under warranty in their implementation charges.

¨ Another included the charge for a security lockdown analysis which was a prerequisite to providing toll fraud indemnification service.

      While both of these were one-time costs that still ended up being included in our TCO analysis, they skewed our perception of the implementation costs and made them more difficult to compare.  (This may be even more important if you are negotiating the contract charges and trying to apply leverage on each section separately.)

Warranty Issues

      Warranty periods and associated coverage offers are different. You must develop a TCO analysis to see the total cost over a given period of years, especially if you need to buy a contract from Day 2. (One respon-dent offered a 90-day warranty that was so weak it required them to provide contract coverage from Day 2 in order to meet our requirements.)

      Other respondents offered 24x7 coverage as standard during their warranty period. If this is valuable to you, you may want to include the 24x7 upgrade charge for other provi-ders in your TCO to ensure true comparison of value received.

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