June 2005

Successful Companies - The Rules Have Changed

Companies grow, and with hard work and good management, they grow in size, reputation for good service and stay competitive on price. This used to be a solid formula for a business to be passed on to family members or local buyers for several generations. Several things have changed that make that formula less secure then ever before. Companies now compete with the large consolidators and they need to expand service areas to spread fixed costs across a larger customer base to stay competitive. Single-location companies need to expand their dispatch yards while keeping common overhead costs centralized, so they can spread these fixed expenses across a large customer base and better use their skilled operational management and office staff while avoiding expensive travel or training of local staff to assume these responsibilities.

This means a company needs to use tools that allow them to know what is happening at different locations and use operational and support staff to address issues at any location. Several tools are available so that any company can now compete with the big consolidators and build a company that can compete in today’s environment. There are three specific tools that can make a big difference. The telephone, computer networking and vehicle tracking or Automatic Vehicle Locator (AVL) sometimes called GPS.

The first is the phone system. Yes, that critical tool used in almost all business activities. Most of today’s phones are designed to run from a single location. Alternatives that allowed multiple locations are expensive and require significant technical skills to implement and support. (e.g. multi-location private branch exchanges (PBX) or Centrix) The new technology that allows any company or private residence to have the same features at a fraction of the costs is the TCP/IP or internet phones. For your home or business you can try several offerings, from your local cable company or one available around the country like VONAGE, which gives you local and long distance phone service for domestic U.S. and Canada, at $15/month for 500 minutes or $25 for unlimited residential phone usage, or $49/line for business and that includes a long list of services like voice mail, call forwarding, automatic number identification, 800 number and call forwarding to your cell phone, fax number and much, much more. So if you have DSL or cable internet access you can replace the $60 to $90 per month phone service for $15 and use the $30 to pay for the internet, leaving you $15 to $45 left over for other stuff, nice deal. Now you know why successful companies use these technologies: lower cost, better service with more options.

If you need more than that, the new TCP/IP phone systems typically cost $5,000 to $10,000 and come with 5 to 10+ phones that you can plug into any internet connection, and the phone acts as if it was in your place of business. Yes, the phone rings at your remote location as if it was on a desk. That means you can support customer service representatives working outside of the office and still have all the phone resources as if they are sitting at a desk in your office. That includes voice mail, conference calling and almost all the services you would expect. So now you can have office coverage by people who are not in the office. Sounds like a large company like car rental companies or banks. They use the same technology to offer 24 hour coverage so people can use their services when convenient for them which makes you a better competitor. This works the same for starting a new office in another local area or another state or time zone. You find a location (no easy task), order high speed internet service and plug in your phone. The office now has coverage from your central location and the staff at the remote location can help cover phone activity from the remote site as if they are local.

The special feature here is that the implementation is easy and fast without having to have specialized technical staff to implement it, and it saves you money.

Next month, we will cover the second tool, computer networking, no longer a tool just for the big guys.



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