Profitability via Productivity

Best time to get some blogging done is either at airport lounges waiting for a flight, or on the flight itself. No phones, no disturbances, pure tranquillity except for the occasional snoring or kicks at my seat from passengers…

Anyway, as I sat through the 15 minutes or so during take off, I looked back at how far we’ve come growing O-Tel from a small company with a big vision who had just received its licence, yet foggy road ahead, to a leading national 1st tier Digital Telephony company it is today.

The hurdles we have jumped, the walls we faced, the unclear regulations from ICASA, the ‘Mafia Like’ approach from incumbents making deployment of services as difficult as it can be, whether intentional due to strategy laid out from the top, or simply incompetent staff, it is still very difficult getting things done when you’re forced to rely on 3rd parties.

The jubilation when signing on a big fish, the heartache when partners decide to move on from the industry, or competitor hi-jacks the client with non-sustainable service offering. We’ve faced it all. It just makes us stronger and allows us time to reflect on how we can fix some issues. There is no perfect company out there, not even BT or AT&T. We try day in and day out, sometimes getting as little as 4 hour sleep in 3 days to ensure up-time, deploying new services, or even awaiting contractors to fix up burnt power stations, darkening a whole data center! Sometimes I wonder how those close around me puts up with me, but I thank God that I have a very patient and understanding family.

Four years on, there has not been a single day without some sort of development, or progress made within the network. Starting from piggy-backing off the industry leaders at the time, to being part of the industry leaders clan, O-Tel has gradually built it’s network inter-connecting with CellC, MTN, Telkom, and imminently Neotel and Vodacom (being late entrants in the IP game) at the highest level. Other VoIP providers are in the pipe line, VOX, XC, ECN, MWEB, FNB Connect, WBS, all placed as a secondary priority. This did not come on a silver platter. ICASA’s constant change in Inter-connect pre-requisites meant that I must have signed over 1000 pages of contracts, some contracts signed thrice to meet regulatory requirements. Bank guarantees by the plenty, could have probably bought a small Island by now. Being privately funded can have its benefits, but to see your sports car collection, including Porsche , Ferrari and others, being turned into a piece of paper marked ‘bank guarantee’ is very heart sore indeed. We are thankful though that O-Tel is liquid, no debt from clients, nor do we owe any creditors. A very efficient financial engine runs within this jet. All this to terminate an excellent quality phone call from point A to point B.

As time went on, we’ve moved on with the latest in technology at the time as well. From offering simple SIP Trunk service, connected via open internet, to closing the internet link and transiting the call via a secure ADSL private connection. Converting larger clients to Diginet and fiber, to automating our billing due to tremendous growth, contracting overseas support staff in order to provide professional service, something sadly South Africa lacks, but slowly changing. Keeping costs low is the key. Today O-Tel offers the best in Telephony Cloud service. Thousands of subscribers in SIP Trunk, the market leader in 1Cloud Hosted PBX, a working Fax over IP solution, almost all Leased lines offerings in SA, and soon the latest in WEB2.0 Cloud Call Center facilities dubbed Centrex.

 

Cloud is the current bubble, we hope it does not burst, but instead evolves into a new generation of computing. Those who have booked their tickets and are on the plane to the cloud have made the right choice. However, those who are already in the cloud, had the vision and are today leaders in the industry.
Infrastructure-as-a-Service (Iaas) Cloud based services means that we can provide clients with A Grade services at low pricing, but this means that we need to ensure we have an A Grade carrier network running on a well oiled tight ship. This I thank my 17 years of experience running multiple multi-million dollar technology companies, and of course, by the Grace of God..

Nothing beats experience. I always believed:

“Time is experience, experience is knowledge, knowledge is power, power is money.”

The main experience I have gained, and this is from the result of very expensive ‘school fees’, is not to be stingy when it comes to backhaul and internet connection. I somewhat compare Digital Telecoms to making a Pizza.

“Many ingredients are required to make a perfect Pizza, but if the dough is poorly made, no matter how delicious the topping, the Pizza will be a flop”

In telecoms, the link to the internet is the dough, the foundation to the infrastructure of your business. A poor foundation results in poor productivity. This productivity will affect the bottom line, and that determines the success of the business.

In 2012, O-Tel Telecoms has made it its first priority to educate and motivate its partners to select the appropriate stable backhaul connectivity to its services. Thank fully, infrastructure costs are coming down, albeit not fast enough. As a result, the need to capitalise and maximise the use of that OPEX is vital. The more Value Added Services you can run on the line, the lower the general connectivity costs.
Enterprises have to change their mindset, something of a challenge in a conservative business community. After the backdrop of an arguably ended recession, businesses need to rethink their strategy to maintain profitability. Keeping costs low has a threshold, one cannot reduce costs too much without affecting the service/product quality. A perfect balance has to be attained.

Another method of increasing profitability is by increasing productivity. You have staff, you are paying them per month, per day or per hour. How to ensure that their time is being used to the maximum benefit of the company? [rhetorical]

This is a challenge to the CEO’s and Managers…what successful ‘telecom’ strategy have you implemented to achieve higher productivity without increasing your OPEX/CAPEX costs substantially?

 

Respond here..