Magazine Article | February 13, 2013

Chasing UC Innovations Is A Profitable Risk

By Gennifer Biggs, Business Solutions magazine

This unified communications (UC) solutions provider stays one step ahead of its competition by investing in the newest communications technology — a strategy paying off in solid revenue growth.

To stay competitive in the rapidly changing landscape of unified communications, solutions provider Technology Solutions Group (TSG) has adopted a business model geared to keeping it one step ahead of its competition. Where other IT providers might wait for a technology to prove itself in the market before building expertise around that product and pitching it to customers, TSG prefers to push the bleeding edge, exploring and experimenting with emerging technologies (i.e. the first 18 to 24 months after general availability) across the UC industry. Then, the company guides its customers toward the competitive advantages that those new solutions can deliver, building its trusted advisor status along the way.

Pushing The UC Tech Envelope Demands Balance
After launching in 1999, TSG has grown steadily, expanding from four employees to nearly 90 today, and growing its customer base beyond the Chicago region to a worldwide presence. Part of the TSG growth strategy is a deliberate focus on staying progressive and proactive by exploring emerging communications technologies. Paul Hill, CEO of TSG, says the biggest challenge in running his organization with such an emphasis on innovation is balance — remaining forward thinking while providing ongoing support for legacy applications within customer environments and staying well-versed in current technology still gaining momentum. “It’s a balancing act that demands you service your customers while also looking ahead at solutions that may be 18 months to two years out,” explains Hill.

To achieve that balance, TSG leverages the knowledge of its CTO, who, as part of his responsibilities, is charged with watching the market and exploring emerging technologies. By attending trade shows, discussing trends with industry consultants, and staying close to TSG’s vendors and distribution partner Catalyst Telecom, the CTO keeps an eye on what products could enhance TSG’s existing UC portfolio and provides the first layer of analysis. Once a new solution catches the attention of the CTO, then Hill continues the evaluation process with assistance from a handful of staff. “We’re just investing time at this point, determining whether this product fits our core focus and evaluating whether it’s a ‘flash in the pan’ or something we need to explore further,” explains Hill. He adds that some new product evaluations start with a suggestion or inquiry from a TSG customer or vendor partner, but admits that if his company explored everything on the market, it would lead to ruin. “If 100 manufacturers are talking to you about new products, you can’t invest too much time in them. In reality, we only explore a very small percentage of what we see,” Hill says.

One way TSG limits distraction is to stick with its existing vendors and manufacturing partners. “They make good products, and we trust them, so obviously those products get a longer look,” explains Hill. “That said, we do consistently explore other opportunities.” Relying on its current vendors to stay innovative allows TSG to push the edge while reducing the risk — and expense — of launching a new vendor relationship. To maintain the inside track with those vendors, TSG volunteers for beta tests, such as the recent evaluations of SIP (session initiation protocol) session and system managers that are now offered as part of the Avaya Aura platform. “That helps us stay on the leading edge, and the vendors appreciate our feedback, so it works well for both of us,” Hill explains. But again, he cautions against distraction. “We only participate maybe once or twice a year, and then, only with three or four manufacturers.”

Leverage Internal Use Of Emerging UC Tech To Simplify Sales
Once a solution has caught the attention of TSG’s leadership, the engineering team is challenged to test the product, evaluating it in terms of reliability, quality, and ease of use. “We lean on our own staff to vet it, and if there is an issue, that also offers us a chance to test the vendor’s support as we try to resolve the problem,” explains Hill. If a new product deployed internally in the TSG lab performs well, TSG then launches a relationship with the manufacturer.

During the entire vetting process, Hill and his team chat with customers about their interest in the new product and its potential value within their organizations. At some point, TSG may even approach a trusted customer for a limited pilot. The company also deploys the emerging tech internally, allowing the TSG team — from techs to the sales organization — to get comfortable with the solution. “They start to see the advantages and benefits of a particular offering, and that makes it easier for them to discuss solutions with our customers,” explains Hill. He says the goal is to slowly build in-house expertise and buzz across the TSG customer base in advance of a full-scale implementation of a new product. Achieving that comfort level, though, can take two to three months for each new solution, Hill says.

Invest In Certification, Training For Success With UC
While only about 5% to 10% of the TSG team focuses on bleeding-edge technology, and no single person is entirely dedicated to the process, TSG does invest significantly in new products. While the vetting process is composed mainly of time and personnel resources, the process of bringing emerging technology into the TSG portfolio does eventually impact the company’s budget as the team builds expertise in advance of launching a new solution. “If a product makes sense for our portfolio, that is when we start investing in it with lab time, certifications, and training of our team,” explains Hill. He stresses that just because his team may understand voice or messaging doesn’t mean it understands adjacent technologies such as SIP and video, so TSG takes education around its offerings very seriously. “We spend an enormous amount — up to several hundred thousand dollars each year — on certification and training for our people, not only to keep current with existing products in our customers’ environments, but also on new offerings.”

Hill takes a similar long-term approach to selling technology, finding value in conversations both with customers intrigued by cutting-edge tech and those more conservative by nature. “Even if a customer is slower to adopt when we present new solutions to them, we get feedback on how and why that product is or isn’t a fit for them. We know to circle back in the future and take advantage of opportunities we are building now,” explains Hill. He says ongoing conversations with customers about the direction of technology helps position TSG as a trusted advisor that is guiding their decisions about IT investments in the right direction.

One example of a new technology that TSG has explored and prepared for over the last two years is SIP, which is used to control IP communication services such as voice and video. Considered second-generation IP, SIP technology offers the integration and richness of service that IP communications has struggled to fully deliver in the past, providing the technology lynchpin for effective cloud-based communication solutions. Hill explains that as more carriers deploy SIP capabilities, TSG customers are poised to take advantage of the convergence between communications and cloud. “We are ready to deliver solutions and technologies that take advantage of SIP — as soon as the customer is ready to make the leap — because we’ve been working with SIP for years now,” explains Hill. As part of TSG’s prep for SIP, Hill and his team have been advising customers about purchasing SIP trunking as it becomes available, empowering those customers to make the right infrastructure decisions to support SIP technology more quickly. While SIP trunking isn’t widely available yet, TSG has completed several SIP deployments with forwardthinking customers, leveraging SIP to integrate and optimize products from Avaya and Microsoft (Lync). “Much like the switch to IP communications, we are well positioned to ride the leading edge of SIP,” adds Hill, who expects SIP to account for about 25% of his company’s revenue in coming months.

Overall, emerging technologies play a significant role in TSG’s revenues, generating about 30% of the solutions provider’s overall revenues. “Staying on that bleeding edge is definitely worth the investment as long as you complete the due diligence and don’t lose your focus,” advises Hill. “Once those new technologies hit the market, we really reap the benefits in terms of opportunity and competitive edge.”