Should I purchase phone services from my IT firm?

Should I purchase phone services from my IT firm?
Published Jul 23, 2020

Whether your current phone solution is too old, you are in need of advanced features and functionality or you just want to cut costs, you are ready for a new phone system or service. 

With so many Phone service providers, it’s hard to decide and now your trusted IT firm is recommending their phone service. Should you consider buying phone service from your IT firm since after all you already know them and you have no experience with any Phone service providers?

Taxi or Ocean Liner?

At a surface view, both IT firms and Phone service providers offer similar services. They ensure the flow information across a network to provide solutions. But that is where the similarities end. While both types of companies are in the technology and network business, they are as similar as a Taxi service is to an Ocean Liner shipping company. A Taxi service and Ocean Liner are both in the transportation business, yet operate on different time scales and aspects of service.

The telephone service most of us use today, Voice Over Internet Protocol (VOIP), was invented by XL.net’s founder’s brother, Alex Radulovic. He succinctly described the difference between an organization that supports a phone services network versus an IT network, “When you have an IT network that has a 2 second issue, most don’t notice that your email/chat/web browser was impacted. When you have a 2 second issue with your phone services network, you just dropped thousands of calls and get flooded with frustrated support calls.”

Quality Usually or Always?

Providing quality voice service most of the time is easy. Providing quality service 99.99% is a different challenge. Similar to internet providers a Phone service provider must keep many connections to other Phone service providers to exchange phone calls. In a traditional phone, there are three Phone service providers involved: The local Phone service providers of the caller, the long-distance, and the local Phone service providers of the call recipient. Often the long-distance Phone service provider will pass the call to another provider if it doesn’t connect directly to the recipient local Phone service provider.

One could fill pages with all the minimal requirements to provide a good quality phone service, but here are a few high level:

  • Maintain at least 2 active, geographically diverse data-centers. 
  • In each data-center, enough capacity to serve the needs of at least 2 data-centers.
  • Each data center will generally connect to at least 5 other phone service providers and 5 other ISP networks.
  • Have at least 5 senior network engineers to provide 24/7 coverage.
  • Live monitoring of call duration as passed to other providers. An indication of possible quality issues in a change in call duration. People tend to hang up and try the call again.
  • 24/7 real-time network quality monitoring between the phone company and each customer. Starting monitoring once someone complains of a quality issue is too late. 

Hedgehog

Hedgehog principle from Jim Collins in Good to Great in summary guides businesses to focus on what they are great at, and avoiding the rest.

Best case, your IT firm is just reselling a phone service and calling it their own so they can make extra money off of you. Worst case, they are hosting a free phone solution called Asterisk.

Putting together a communication platform that has high quality and functionality requires a heavy investment in startup (millions) and maintenance ($20k+). Telecommunications margins have been shrinking rapidly. The market rate for lines has almost been cut in half in the last two years (35-40%).

Do you want your IT firm focused on investing in a business line that has shrinking margins where the Hedgehog competing Phone service providers are?

What about Microsoft Teams?

We love Microsoft Teams, an amazing collaboration platform that has saved many businesses during quarantine. In fact Parlano, XL.net’s founders past company which he co founded with the support of UBS and divine, was purchased by Microsoft in 2007 and is part of the intellectual property of Microsoft Teams.

So what about relying on your IT firm to deploy Microsoft Teams to get rid of your current phone solution? The same minimum requirements from earlier apply in order for a service provider to be able to provide good quality of service. On top of that, you have to be ok with missing the following functionality common in current phone solutions in the market, though granted Microsoft is quickly catching up:

  • Direct Dial-by-extension – you can only do it from an auto attendant, meaning I can’t from my phone dial an extension to another coworker. 
  • Lack of user paging
  • Advanced call activity reports
  • Advanced Call Center features
  • For more information, take a look at TechTargets comparison 

We did a search of top phone service providers. Not one of them is an IT firm that also provides phone services, and now you know why. 

Go ahead, try.

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