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Top 7 Mistakes Dealerships Make When Buying Phone Systems
Or why mixing your IT and phone technology can cost you big time
WithPhillip Sherman, CEO of Telecom Advisors Group
Moderated byMike Bowers, Executive Editor of DealersEdge
Phillip A. Sherman - President/CEO, Telecom Advisors Group, IncPhillip has been a telecommunications professional since his first position with Harris Corporation in 1971. Since then, Phillip has held positions and acted as an independent consultant with firms such as United Technologies, Walker Communications, Western Union, Wiltel Telecom Corp., Inter-tel, Union Bank, California Microwave, DataProducts and Bechtel Corporation.
Phillip has been a frequent speaker for The North American Telephone Association and continues to be active in industry trade shows and corporate speaking engagements. He's a published author with numerous articles involving various facets of the telecommunications industry.
The Top 7 Mistakes Dealerships Make When Buying Phone Systems
Or Why mixing your IT and phone technology can cost you big time
Speaker Background
� Active in Telecom Industry since 1971� Founder of four Telecom firms� Published author of various articles
Created Telecom Advisors Group, Inc. in 1996 to advise dealerships in matters
relating to telecom technology and services.
So much confusion…
…and to make matters worse…
Let’s see how it got so crazy
Basic Communications
Accessories
Bandwidth
Twisted Pair
Fiber
Co Axial
Cat V/VI
Data Network
Business Communications Requirements
Telecom Confusion
The telecom solution that works for one dealership may be totally wrong for another….The solution should adapt to the
store, not the other way around
Once you announce that you’re looking for a new telecom system, you’ll be busy
Every telecom salesperson’s solution will be “perfect for your dealership”
Don’t listen to the vendors that tell you that VoIP is the only way to go..it’s not
New Telecom System Pricing
$- $200.00 $400.00 $600.00 $800.00
$1,000.00 $1,200.00
1985 1995 2005 2010
50 stations100 stations200 stations
Average price per station or endpoint
System Upgrade Pricing
$- $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00
1985 1995 2005 2010
50 stations100 stations200 stations
Average price per station or endpoint
Traditional TDM PBX vs. Voice over IP (VoIP)
PBX
Extensions/ Routing Tables
Switching functions
Call Controller
Gatekeeper
Gateway
Benefits of VoIP include the elimination of duplicate cabling and the possibility of
reduced monthly costs
Traditional connectivity for dealerships with multiple locations
Store #1
Store #2
Remote locations are connected via mileage-based
point-to-point T-1 circuits
Body Shop
VoIP configuration for dealerships with multiple locations
Carrier’s Network
Store #1
Store #2
Eliminate LD Charges and provide “intercom” dialing
between locations.
Body Shop
Mistake #7
Expecting that Voice over IP (VoIP) Call Quality will be as good as your old land
line call quality
Call Quality vs. VoIP/SIPIt’s all about Bandwidth
Land LinePOTS
Land LinePOTS
Land LinePOTS VoIP/SIP
VoIP/SIP VoIP/SIP
Mistake #6
Not holding on to at least a small number of Analog Trunks…just in case
When upgrading to VoIP, keep a few analog lines
NOLand Line(POTS)
Land Line(POTS)
VoIP/SIP
VoIP/SIP
Network
Network
Mistake #5
Assuming that the existing network cable infrastructure will work with the new VoIP
system
Before you start a search for a new system, verify with your IT department that your network cabling is CAT 5e or better
VoIP/SIP
VoIP/SIP
CAT 3 Cable
CAT 5e Cable
VoIP/SIPCAT 6 Cable
Mistake #4
Buying new technology too late
Make sure any products or services you’re evaluating aren’t obsolete at time of purchase
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Mistake #3
Buying new technology too early
Make sure any products you’re evaluating have been on the market long enough to ensure trouble free operation
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The Piggly Wiggly grocery chain with over fifty locations throughout Texas was the first to install the Cisco Call Manager in a multi-location environment. The result
was catastrophic.
Mistake #2
Not performing a Billing Audit prior to the installation of the new system
Before you begin your search for a new system, perform a billing audit to eliminate unwanted lines and to decrease cost
$122,675.28
$48,348.00
$74,327.28
$0.00
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
$140,000.00
Riverview Mercedes-Benz
Existing Yearly ExpenseProposed Yearly ExpenseProposed Yearly Savings
Mistake #1
Not developing a specific list of system requirements and specifications with
which all bidding vendors MUST comply
Develop a list of system specifications, requirements and minimum terms for each bidding vendor to receive
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This is an absolute MUST to ensure all vendors are bidding to the same size and configuration
Some other, less critical mistakes
� Not having a back-up Internet connection
� Buying a VoIP system without SIP interface
� Not allowing for growth of stations or trunking
� Not buying a system that’s compatible with your other technologies
� Not coordinating the dealership dialing plan with the new system install
� Signing a long term maintenance agreement when buying the system
Tips when buying VoIP SystemsKnow going into the process WHY you are looking at VoIP.
Know going in if your internal IT staff will be making programming changes on the new system and therefore require some training.
Don’t necessarily buy the least expensive system. Explore all the options and concentrate on the longevity of the equipment vendor.
DON’T BUY USED!
Use trusted brands….don’t buy systems that are generic in nature and built on“White Box” server design.
Gather and copy all telecom related billing
Survey all managers for input of needed features
Identify the vendors that will receive bid document
Interview vendors and check references
Conduct staff and manager meetings
How to start the process
Make vendor selection
