Why work with Vatic Outsourcing?
(Versus going direct with a carrier)

As you might imagine, this is the number one
question we face in the marketplace today.
There are four key reasons customers choose
to work with Vatic Outsourcing and discontinue
their direct relationship with their carrier. In order to
fully appreciate the value of these reasons, it is
worth first reviewing a number of factors that have
altered the “traditional” company-carrier direct relationship.

The primary and most compelling reason to consider abandoning the company-carrier direct model is that which is happening to the carriers themselves within the industry. All aspects of the telecommunications industry are facing ever-increasing financial pressures as evidenced by the dwindling stock prices and recently announced bankruptcy filings of companies comprising the industry. Net margins range from a high of around 5% to a low of –20% for the large, reputable, long-haul IXC carriers. The reasons for these dwindling margins include:

• The competitive pressures brought on by the Telecommunications Act of 1996.
  
  
• The significant spending on capital expenditures and the resultant high debt caused by carriers expanding large domestic and worldwide networks.
  
  
• The lack of realized demand from previous forecasts for high bandwidth Internet and data services.
  
  
• The significantly increased overhead expense required operating a large telecom carrier.
  
  
• A more educated customer base which less inclined to move or “bounce” from carrier to carrier. This reduces the telecom company’s ability to continuously increase market share or profitability.

Each of these causes has a significant, direct; and unfortunately, negative effect on the direct carrier model as it relates to the customer; as indicated by the following examples:

• Customer service and satisfaction levels have dwindled to historically low levels.
  
  
• Account teams have decreased in number and size as well as exhibited high turnover rates. Customers who once had a team of three to four individuals now have one to two; accounts that had one or two assigned individuals are now serviced remotely from call centers; and practically all customers have experienced recurring “new contact/customer service representative” introductions.
  
  
• Pricing has become a roller coaster based predominantly on where a customer is relative to the contractual commitment (i.e. competitive pricing early in the term and exorbitant at the end).
  
  
• Carriers have been unsuccessful in becoming established as a Single-Source or “Turn-Key” Provider. As the dominant direct Telecom companies have struggled to address decreased profitability, rising debt and dwindling growth capabilities they have had to abandon their efforts to offer all services. No provider has yet been successful in rolling out and adequately providing the full menu of services in the marketplace. This has caused customers of all size to have multiple vendors for a service that generally rolls up under the heading “Communications” on the company’s financial statement. This lack of single source service and support continues to cause customers to long for the days of “Ma Bell” when all services were provided and supported by a single source.

The changes illustrated above have had the most significant effect on those customers categorized as Mid-Sized accounts in the marketplace. The Mid-Sized customer is one that has multiple services types, possibly with some dedicated facilities; has need for competitive pricing, attentive and catering customer support; and most importantly, excellent network performance.

So as margins dwindled, coupled with customers less inclined to move from carrier to carrier; the large long-haul telecom companies have made the most aggressive changes to those customers caught in the middle. This is because the Mid-Sized customer’s are an inviting target predominately as:

• Mid-Sized accounts have enough services with reasonable complexities that make transitioning to another carrier seem like a hassle. Therefore, the risk of cancellation to the Large Direct Carrier is minimal.
• Though the Mid-Sized customer cares about pricing, the ability to accurately compare and analyze services, features and associated costs is increasingly complex. This is compounded by the influx of various technologies and absence of in-house personnel capable of evaluating both the technology and the fiscal aspects.
• Unlike the small customer who services can be easily changed and also easily determined, Mid-Sized accounts have a sizeable amount of inertia due to their size and aforementioned reduced IT staffs.
• In contrast, the large national and global accounts are considered more favorably by the direct carriers due to the potential risk of losing millions of dollars a year in business. Certainly a strategy of targeted scaling back of services and support coupled with minimally decreased pricing would result in the loss of numerous major accounts that would be extremely difficult to recapture.

The last; and though less tangible, still quite important, change in the Direct-Carrier Model in recent years is the change in tenure, expertise and experience exhibited within the telecommunications industry. As carriers have struggled to maintain profitability and the demand for high tech sales and engineering talent has increased, the long term/stable employee has all but vanished. Instead it has been replaced with constantly changing staff. As it is now, an account representative, agent or engineer representing the same carrier for more than 1 year qualifies that individual as a tenured employee. This lack of cohesive knowledge of the provider and his specific equipment and services, coupled with the constant re-education of the carrier’s representatives makes a Mid-Sized customer’s experience with its telecom vendors a frustrating and often painful process.

ALL OF THIS, coupled with the inherent lack of objectivity by working with a paid representative of a single company has fostered a customer experience that is generally less than satisfying.

So how can Vatic Outsourcing Consulting help?
Vatic Outsourcing Consulting reflects a concept that was born out of the frustrations experienced by several long-time telecommunication professionals over the last 12 years. Being faced with these same issues and obstacles over the last twelve years. The people who comprise Vatic Outsourcing Consulting possess more than 35 years of experience in all facets of the industry while exclusively serving the Mid-Sized market segment.

As initially stated, the concept of our service is to provide 4 basic components of service, differentiating Vatic Outsourcing from the direct company-carrier relationship model. These have proven to significantly enhance our customer's on-going satisfaction and experience.

1. Objectivity – One of the basic elements Vatic Outsourcing feels strongly about is the ability of our firm to accurately and impartially represent more than one provider. In each element of telecom service (e.g. long distance, wideband data, etc.), Vatic Outsourcing represents at least two providers. This allows Vatic Outsourcing to perform an objective, unbiased analysis of our customer’s requirements without being burdened with limited options, employer quotas or similar constraints driving the recommendation. This level of impartiality allows Vatic Outsourcing to keep the customer's best interests at heart and matching the best provider and services based solely on the customer’s requirements and preferences.
   
   
2. Expertise in all facets of telecom service. As mentioned earlier, the managing partners of Vatic Outsourcing Consulting have greater than 35 years of experience in the telecom industry, each bringing a wealth of experience in the three key facets of the business, Pre-Sales, Provisioning/Implementation and Long-Term Customer Support.
   
   
3. Compensation that rewards activities consistent with the best interests of customers. One of the major reasons that customer service satisfaction levels in the telecom industry have fallen off over the last 10 years is the flawed compensation that the carriers use to motivate their employees. Virtually every carrier rewards his or her account representatives on individual accounts for a short amount of time (or in a fashion that is so indirect that there is virtually no inherent relationship between an individual customer’s satisfaction and their compensation). This lessens the accountability and overall desire that representatives face when providing these services.

   Vatic Outsourcing's method of compensation embraces the opposite philosophy. Vatic Outsourcing is paid directly from the underlying carriers, receiving a modest monthly commission (based on a percentage of our client’s overall telecom costs). Though these commission structures are relatively small, they’re retained for the life of the relationship. Therefore, to realize a reasonable “return on investment”, Vatic Outsourcing is highly motivated to provide exemplary customer service. In short, the relationships Vatic Outsourcing develops are as important on the first month of service as they are on the hundredth month.

   The cause and effect relationship of our customer’s satisfaction is implicit. If the account stays and grows with Vatic Outsourcing, Vatic Outsourcing makes money, if not, it’s lost. As Vatic Outsourcing represents multiple carriers, we are not influenced to keep clients with a carrier who has begun to experience deteriorating levels of service or price competitiveness. In fact, the exact opposite occurs. Vatic Outsourcing responds with actions in the best interest of the client…as ultimately, a lost client is lost revenue.

4. Leveraging and partnering with the best in the industry. No carrier provides all the types of telecom services, much less provide them with exceptional service. Subsequently, Vatic Outsourcing has endeavored to source the best of the industry in each applicable discipline of the service.

Although our clients may be working with two or three different underlying providers, Vatic Outsourcing manages all interaction and account services required for life. Vatic Outsourcing’s role is to service your organization in manner that seems like having an in-house telecom expert that is even more knowledgeable than the staff available at the service provider. Ultimately leaving management with the sense that the company is served by a single, exemplary telecom service provider.

We at Vatic Outsourcing Consulting look forward to working with you and thank you in advance for your consideration of our proposed solutions and services.