Monday, November 08, 2010

How Bandwidth Can Affect Productivity

Many companies are finding themselves in a decision process about how much bandwidth to order. For the most part, it’s so many dollars per Megabit per second throughput. There are ways to actually get more Mbps for your bandwidth dollar, and I’ll tell you about that in a second. First, though, let’s see if there is a relationship between your network bandwidth and employee productivity.

Bandwidth vs Productivity. Click for options.If your only bandwidth connection is a broadband Internet service that employees use to sell personal items on eBay or play Farmville when the boss isn’t looking, you might argue that less bandwidth would be a productivity enhancer. In fact, you’d be better off disconnecting from the Internet completely. But most companies can’t do that anymore. They are completely dependent on both internal data transfers and connections to the Internet in order to conduct business. Still, what is the right level of bandwidth to install?

Let’s use an analogy to see if we can figure this out. Suppose you have a office full of sales agents. This is certainly true of insurance firms and real estate brokers. It’s also the case with many other types of business. Now, let's install one wall telephone for every two dozen agents. How much sales volume would you expect to be generated?

In such a case, you’d probably find that the telephone set would never get cold. There’d be a line of agents urging whoever was on the phone to wrap up the conversation and give others a chance. If these were salaried sales people, you’d be losing money in buckets. If they were commissioned sales people, the ranks would soon thin out from a steady stream of resignations.

Obviously you want to manage the productivity of your scarce resource, which is the skilled sales agent. You’d give them each a phone and perhaps both a desk phone and a cell phone. How about the number of outgoing phone lines? You’d install enough lines that there would rarely, if ever, be a busy signal.

This is an easy example because there is a clear connection between sales agents being able to make phone calls and the amount of revenue the company generates. It’s also generally acknowledged that high producing agents are far more expensive than telephones and phone lines. But what about other employees? Does this analogy translate to other activities?

Of course it does. It’s just when you have dozens or hundreds of employees doing all sorts of tasks, it’s harder to nail down the cost of lost productivity. You should try, though, because the loss is there just the same. Any time someone has to wait for a file transfer or access to a Web site they need to do their job, you have minutes of productivity vaporizing.

Multitask, you say? Sure, people do that all the time. If they know that it takes 15 minutes to download a particularly large image file, they might do something else while they wait. But what if it takes 15 seconds? Chances are they’ll sit back and relax or converse with someone at the next desk. Worst of all, what if your network performance is so variable that you have no idea if you’ll get that file in 15 seconds or 15 minutes? Do you start another task only to be immediately interrupted or cool your heels only to find that you’re doing nothing for the better part of most hours?

The problem is probably more insidious because these are extreme examples. In most cases, the wasted time is probably more like seconds than minutes per task. But multiply that lost time by the number of employees every day for a month and you might be surprised by how much it costs. Now, compare that cost to what you are spending on bandwidth per month and see if your telecom bill still looks outrageous.

To go a step further, consider how much more you might accomplish as an organization with more sophisticated tools that are also more dependent on Internet or cloud network connectivity. It’s a tradeoff between the cost of automation plus ongoing bandwidth & maintenance charges versus the cost of bodies in seats to accomplish the same thing. It makes no difference if your bandwidth costs are a few hundred dollars a month, a few thousand or tens of thousands. It’s what you are accomplishing for the money spent that counts.

Now, as promised, I’ll let you in on a little secret about the cost of bandwidth. It’s not the same for everyone. Pick out 10 companies, each with a T1 line or an OC3 fiber optic service, and you’ll find they’re paying 10 different lease prices. Why? Partly this due to the fact that the price of bandwidth is always changing but line leases are for a fixed time period. You also pay less if you sign a 3 year lease than if you hedge your bets and only commit to a 1 year lease. But the biggest cost differences come from what type of bandwidth service you order and who you buy it from. This can result in a factor of 2x or more in the cost of the same Mbps from one company to another.

How can you be sure you are getting the best rate on your voice or data bandwidth services? More competition is better, so using a broker who has relationships with dozens of service providers helps insure that you didn’t miss a big price break because you only got quotes from one or two carriers.

Also be sure that you compare all means of connectivity appropriate to your business. Did you know that you can get twice the bandwidth for the same money if you order Ethernet over Copper versus T1? They’re both professional grade telecom services, but one is cheaper than the other if it’s available for your location. There are copper, fiber and wireless options available for most businesses. Some services offer broadband and telephone on the same connection for a cost savings.

If you are losing money because your systems are bandwidth limited or you suspect you are paying more that you should for a particular level of service, then by all means get current competitive bandwidth quotes and see what’s available. You can do this quickly and easily through the Telarus telecom brokerage service and get complementary consulting help as well.

Click to check pricing and features or get support from a Telarus product specialist.

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