How to Select a Hosted Service Provider

August 19, 2010 by Garrett Smith

Telephony services are perhaps the most important service to any business. What would happen to your business if the telephone system stopped working? This makes selecting a reliable telephony service provider one of the most important IT decisions.

As with any IT purchase, it is important to wade through the marketing information and dig down to the get the answer to questions that matter.  It truly does pays to do your homework!

By asking the right questions up front, you can avoid signing with a risky provider — or one that doesn’t offer what you need. Most VoIP service providers offer basic capabilities such as voice mail or call hold but may not give you the advanced features, service options or scalability that your organization needs.

Here are some useful guidelines on selecting a hosted provider

Evaluate the service provider and system integrators capabilities in terms of breadth of services and flexibility of offerings
There is real value to a business when it selects a range of services from one provider.  IP Telephony services will require an IP connection.  It is also sensible to use the same circuits/network to provide other services.  Remember, the cost of managing separate suppliers is much higher than dealing with one.

Ensure that the vendor is financially stable and committed to the business over the long haul
There are a large number of providers in this market. Some have significant venture capital funding that has to be repaid, often by selling the business.  A large proportion of the rest are operating on a shoe string and some fail every year.  Both of these situations leave you exposed to the risk of no telephony services or one that is altered and not fit for purpose.

Determine what infrastructure needs to be replaced and when
It is not always necessary to replace existing infrastructure; for example, it may be possible to connect the PBX to the IP telephony provider using a gateway.  This will ensure that the PBX is not replaced before it is end of live but it also allows new users to be added to the hosted IP telephony service.  The right provider will make this transition simple.

Look for an IP Telephony provider that has a clear roadmap
This shows a clear commitment to continue to improve the services and add new features.  Technology doesn’t stand still and your provider must be moving with the market.  Unlike a legacy PBX, selecting a hosted telephony solution protects you from the need to buy expensive hardware upgrades to add new products and/or features.

Identify the scope and scale of service provider responsibility
One of the great advantages of selecting a hosted IP telephony service is that it can be a totally managed service.  This reduces your IT resources needed to deliver the solution to the end users.  Other service providers will simply ensure that the voice network is available and the customer will do all the administration.  Select the option that best suits you now and in the future.

Tour the company’s network management facility and meet the people who will monitor the network
When you buy a hosted telephony service, typically the only thing on site are the phones.  Take advantage of any offers to visit the service provider’s data center and/or network management center. Some companies will be proud of their facilities because they know that the investments they have made are about servicing the customer.

Understand the cost models and total cost of ownership
Total cost of ownership (TCO) can be confusing.  Everyone has a way to show that they offer a reduced TCO. However, take an objective view of this and challenge the service provider.  Always make sure that you have added your personnel resource costs and necessary training, both end user and administrator. Remember to include the expected costs of upgrades and adding new services in 2-3 years time.

Select a service provider that has business continuity and disaster recover capabilities
Some providers cut corners, especially when they are in a setup or rapid growth phase.  They don’t have the resources to deploy services at two or more data centers. They have single points of failure in their hardware, software or network. Building resilience into the platform adds cost initially but it is vital to ensure that the service is always available. If an entire data center is lost, what happens to the customer data, call recordings, voicemails?  If these are important to you, they should be important to the service provider.

Obtain fully documented service resolution procedures
Perhaps the heart of a hosted telephony service is the Service Level Agreement (SLA). Make sure you read this before you sign.  Understand what will happen if things go wrong.  You need to be happy with the timescales it could take to get things running again in the event of a problem.  Read the small print, it is there for a reason.

Go for a service provider that has made considerable investments in the technology and support services
Ask the provider how much has been invested in the telephony infrastructure. Some will have invested very little and some may have invested vast sums.  If it is too little the service is likely to be poor.  If it is very high the price is likely to be high, or they need to add huge numbers quickly which will probably mean a poor service as well.  Having the privilege of working with numerous providers I see the effort and support some of the hosted providers we work with put into their business model.   Just because someone has a great website or have flashy commercials doesn’t mean they truly invest in their service.

Ultimately the decision is yours to make but if you need some additional support feel free to give me a call and we can discuss this.  Hopefully I can help clear the muddy waters and help you make the right decision.

1 Comment

  • Steve Glaiser

    great information! thanks so much for doing the work for us!!!

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