Assessing the needs of MSPs, integrators and other organisations and the challenges they face when sourcing quality third-party professional project and technical services for Cisco technologies.
The United Kingdom voted to leave the European Union on June 23rd and we’ve heard all about the impact on International stock markets, multi-conglomerates, worldwide economies and not very much about the little guys – small businesses.
Much doom and gloom has surrounded the Brexit vote, primarily due to the multitude of legal and financial uncertainties. There is no doubt that the UK leaving the EU carries risks, but counteracting those risks are an equal amount of opportunities.
This blog will explore the influence of the Brexit vote on an SME in the IT sector offering Cisco Professional Services. We will objectively explore any negative and positive impact the Brexit vote has had on our company, our finances and business operations.
As a Cisco Professional Services organisation, 4CornerNetworks specialise in the provision of Cisco Engineers making our business model dependent on market prices in the recruitment of Cisco Engineers. We operate Internationally, often employing Engineers from the EU and USA where the performance of the Pound Sterling causes both negative and positive currency fluctuations.
Post Brexit vote in the UK caused major currency fluctuations on the Pound Sterling against the US Dollar and Euro. Let’s look at the currency fluctuations of the Pound Sterling vs the US Dollar and the Euro from June 23rd, the day of the Brexit vote.
£ Pound Sterling to the $ US Dollar
$1.48 to £1 23/06/2016
$1.33 to £1 03/08/2016
$1.29 to £1 08/07/2016 = 28.12% fluctuation from 23/06/2016
The pound reached its lowest point on 8th July trading at $1.29 to £1 and its highest point of $1.48 to £1 on the 23rd June resulting in a 28.12% fluctuation. Today the price is $1.33 to £1 where the fluctuation from 23rd June is 22.2%.
£ Pound Sterling to the € Euro
€1.30 to £1 23/06/2016
€1.19 to £1 03/08/2016
€1.16 to £1 06/07/2016 = 18.2% fluctuation from 23/06/2016
On June 23rd the Pound fluctuated by 14.3% against the Euro against today’s price of €1.19, and reached a low of €1.16 to £1 on July 6th resulting in a 18.2% fluctuation.
Price of Doing Business
The average salary of a CCNA in USA is $72,039. At the current exchange rate of $1.33 to £1 is £54,165. On 23rd June the exchange rate was $1.48 to £1 meaning the same CCNA Engineer would cost £48,675 which is a cost of £5,490 for the salary of a single Engineer. (source: http://www.payscale.com/research/US/Certification=Cisco_Certified_Network_Associate_(CCNA)/Salary )
A CCNA in Europe (Take Germany as an example) earns an average salary of €45,562. At the current rate of exchange €1.19 to £1 is £38,287. On 23rd June the exchange rate was €1.30 to £1 meaning the same CCNA Engineer would cost £35,047 which is a cost of £3,240 for the salary of a single Engineer (source: http://www.payscale.com/research/DE/Certification=Cisco_Certified_Network_Associate_(CCNA)/Salary )
However, fortunes are reversed when we receive payment from organisations in Europe or USA. If an invoice for $10,000 was received on 23rd June, this would have been worth £6,757 but the same $10,000 invoice today would be worth £7,519, a surplus of £762.
A €10,000 invoice on 23rd June would have been worth £7,692 but the same €10,000 invoice today would be worth £8,403, a surplus of £711.
The currency fluctuations can be equally negative as they are positive which results in the solidification of uncertainty and therefore a cautious approach must be taken when dealing with international clients, currencies and projects. Operating in volatile market conditions is a business challenge we must accept face on, but remain equally cautious.
Any International growth ambitions small businesses have must now be placed on hold, but for how long? Planning to set up new offices, employ new staff and trade internationally with multiple currencies fluctuating by up to 30% in a matter of weeks presents too many unknowns and a period of stability must be reached before the UK’s small businesses can shake off the shackles and grow. It all depends if you see the glass Half Full or Half Empty?
*Please note the rate of exchange is at 03/08/2016 and will vary
Back when computers ran off cassette tapes and plugged into your spare TV, it was generally the least cool kids in school who spent time in the IT suite – or as it was known in those simpler times, the computer room. The terms “geek” and “nerd” were coined to describe these unloved adolescents, and were used as playground insults by schoolboys of all ages.
How times have changed: Thanks to the pioneering efforts of some of those early IT engineers, computers became slick and fun, and soon they were essential to business too. More and more clever people saw where things were going and learned about IT; then they found more applications for it and built highly successful businesses using the new technology. Before we knew it, the terms geek and nerd were no longer pejorative, but used in a kind of awe of those who had mastered this world-changing technology. Nevertheless, most of us still prefer the term engineer.
IT engineering has been a desirable career for some time now, and yet there is still a shortage in many specialities. In terms of Cisco Engineers, the shortage is particularly acute, while at the same time there is also a pressing demand from companies who need their networks to work smoothly and cope with an ever larger and more business-critical level of usage. Given the fact that these are well paid roles, economic theory suggests that more people will chose IT engineering as a career and that the gap between demand and supply will close. However, that theory would under-estimate the quality of people needed to set up and maintain the ever more sophisticated networks in use.
To get an idea of the kind of people involved in Cisco Engineering, just take a look at the astonishing array of companies that have been started by former Cisco employees and engineers – this link gives just a few examples: http://www.networkworld.com/article/2988547/cisco-subnet/18-companies-launched-by-former-cisco-people.html
The fact that these engineers are of such a calibre and ambition that many seek to set up their own ventures further explains the shortage of skilled workers available to the average business, which doesn’t have the resources to keep specialists in all Cisco disciplines – if any – on its staff, let alone enough to cover all its global operations. In fact, Cisco itself has had problems retaining its best people, and adopted an extraordinary policy of encouraging ambitious employees to develop “spin-in” businesses that it would then buy from them, often for millions of dollars. This policy had the added benefit of keeping entrepreneurial innovation at the heart of the firm even after it had grown into a global giant, and of course made the job of building, maintaining and updating its systems even more demanding as they incorporated the innovative and disruptive technologies developed through the spin-in process.
Many were surprised to hear that Cisco is apparently ditching its spin-in programme last year, although reading between the lines it appears that the policy will essentially be retained in another form: http://www.businessinsider.com/ciscos-new-ceo-ditches-spins-ins-2015-11 This is just as well, as the flow of new IT and network applications which comes through this system has helped drive growth and profitability across many industries around the world. For ambitious businesses wanting to remain part of that growth story and keen to retain a leading position in their sector, access to Cisco Engineers is essential – and they must not only be suitably qualified, but thoroughly up to the job of working with cutting edge companies in many industries and helping them to innovate where necessary as well. That is why 4CornerNetworks exists: to supply those professional services.
We specialise solely in Cisco Professional Services, because although the hardware for the systems is essential, it is not in such short supply. We believe that access to great engineers is important for businesses to thrive and grow, and we understand that different firms have different needs in terms of the amount of help they need. Unlike most of our competitors, therefore, we don’t set out to win customers by selling managed services packages that charge them for things they don’t need. At 4CornerNetworks, we just provide access to great engineers, when and where you need them. That way, all our clients have access to the full range of skills available – as if they have a full set of Cisco Engineers on their staff, all over the world.
Your Pain Points when working with a Supplier of Cisco Engineers
“They” say that 98% of published statistics are made up, and people will think that when market research doesn’t provide them with the answers they anticipated. Conducting market research with a 3rd party will help to eliminate subconscious bias when asking questions and help to provide a survey format whereby respondents submit honest and detailed responses. Here at 4CornerNetworks, that’s exactly what we did when partnering with CRN Channel Web as we embarked upon a quest to understand client experiences, good and bad, when engaging with a supplier of Cisco Engineering Resources.
C-Level Executives, Operations & Project Managers from Telecomms, Managed Service Providers, ICT Providers and Cisco Channel Partners were asked about their experiences when utilising Cisco Engineers from a 3rd party vendor.
- 1/3 Were not satisfied with their external supplier of choice
- Only 1/3 said they were happy!
- 83% Concerned with rising costs and additional charges
- 83% Concerned with lack of Engineering availability
- 48% Concerned with a lack of transparency on attending Engineers certifications and experience
We asked, the channel spoke and specified that a lack of available Cisco Engineers and High Costs were the two primary concerns. 40% of C-Level Executives stated that they used more than one supplier of Cisco Engineering Resources, with 45% of those respondents doing so due to a lack of engineering availability. A lack of available Engineers will naturally occur when external partners fail to understand your everyday business requirements. Where are your clients located? When do you experience dips or peaks in client demand? How quickly can your external partner process your request? – All these questions impact on Engineering availability and all can be avoided by planning, integrating processes with your external partner and studying previous trends to ensure that you can get Cisco Engineering excellence, where you need it, when you need it.
Access to Cisco Engineering Skills
2/3 of Telecomms, MSP’s, ICT & Cisco Partners utilised the services of a 3rd party vendor to gain access to specific Cisco Engineering skills not available in-house. However only a fraction, 7% of all respondents concluded that when hiring an external Cisco Engineering partner, that costs were a benefit of any such relationship – that’s 93% of hiring companies NOT completely satisfied with the costs they are being charged.
Almost half of all respondents expressed their concerns with the experience and qualifications of attending Engineers. Often the end client provides feedback on how each Engineer performs. How long it took them to perform tasks, their customer and communications skills and their overall technical ability and expertise. If an attending Engineer takes twice as long to perform tasks due to their lack of experience or because they are not adequately qualified, then costs increase and the quality of workmanship will reflect poorly on your Brand.
Peek-a-boo charges were the main cost concern when hiring a Cisco Field Engineer from an external partner. Upon opening your invoices, all of a sudden, peek-a-boo! Out pop charges for account set up, account maintenance, minimum booking time of 2-4 hour slots (when you only need an Engineer for 1 hour) and being charged for a CCNA, when all you got was a technical courier. Such charges make financial budgeting and forecasting almost impossible when you have no idea how much additional costs will be added to your invoice.
We Listened and…
We understood what problems your organisation faced when working with 3rd party suppliers of Cisco Engineers and what solutions will help to alleviate your pain points. More transparency, greater Cisco Engineering availability, consistent pricing and a select partner to work in tandem with your current business processes, ethos and culture.
SMART Onsite Service from 4CornerNetworks implemented by a customised Partnership Portal provides a solution to each and every pain point.
No set-up fees and no account management fees will ever be charged. We do not believe in winning new clients, then charging them for the privilege of being our client. Securing clients in a mutually beneficial long-term relationship will always be a main objective of 4CornerNetworks. Financial planning and budget control is now placed firmly back in the hands of our clients as a set monthly fee is charged by Direct Debit making forecasting easy and accurate because you know how much your bill will be every month.
Ease of Booking
S.O.S is only available to clients who outsource their requirements for Cisco Field Engineers of 500+ hours annually. You will be able to access the exclusive Partnership Portal of 4CornerNetworks where booking an Engineer when and where you need them is quick and easy to use. Simply choose the date, time and location of where you require an Engineer, provide a brief scope of work to gain instant access to Cisco Engineers where you need them, when you need them. This results in less admin time to source Engineers and less time and cost when working with an external partner.
Cisco Field Engineers Availability & Quality
Have you ever found yourself questioning the certifications and experience of an attending Engineer? Have you experienced Engineers turning up onsite late, unprepared and lacking in both customer and technical skills?
With S.O.S you will be able to view the details of Engineers, their Certifications and previous Quality Assurance scores. Therefore any Engineer you book will firstly need to satisfy your exact requirements and those of the end client. As a result of this function, the quality standards of your organisation will be significantly boosted brining you and your clients’ complete piece of mind.
Sourcing Cisco Engineers from a 3rd party supplier has thus far caused many organisations to seek alternative solutions to their Engineering requirements. Many existing suppliers of Cisco Field Engineers have caused customers to switch suppliers in search of transparent billing and certified Engineers. Perhaps the lesson to learn is to view your clients as partners and understand that there is a direct correlation between fair pricing, quality standards and long-term relationships.
With a market cap of $119 billion, 2014 sales of $48 billion and ranked number 12 in the world’s most valuable Brands, Cisco are the industry leaders in IT Networking equipment. The likelihood is that readers of this article will be working with or have worked with Cisco Network Systems. Therefore if your company is working with a Cisco Network System then you’ve faced the dilemma of choosing between outsourcing the need for Cisco Support or employing in-house Engineers.
As an SME, Enterprise or a non-ICT related company with a Cisco IT/Phone system, then you need to think about the level of Cisco Engineers you need to employ for your business. Whereas Managed Service Providers, Professional Services & Cisco Channel Partners need to think about the level of Cisco Engineers your clients require. Either way, outsourcing can provide your business with the specialist Cisco skills you need and at a fraction of the cost and risk of employing Cisco Engineers in-house.
1) Lower Operational Costs
In the UK Cisco Engineers command high salaries and rightfully so, they’ve studied and trained hard to achieve their status. Current 2015 average salaries for Cisco Engineers in the UK are:
Your Operational costs don’t end there, other costs associated with in-house Cisco Engineers are:
- Holidays & Sickness
- Salary benefits – Bonus, Shares, Pension, Health Care & Annual Pay Increase
- Additional Benefits – Company Car, Petrol Allowance, Laptop, Mobile Phone
- Maternity/Paternity Pay
- Staff Training
- National Insurance & Tax Contributions
- Portion of running costs – office, furniture, equipment, admin costs & consumables
- Cost of Employment – In-House costs or Recruitment Agency
Accumulating the additional costs of employing in-house, a CCNA salary can be well in excess of £50,000 per year or around £23 per hour. Compare this to the average hourly rate of a CCNA which is currently £18 per hour resulting in savings of 27.8% when outsourcing against employing in-house. Your wallet, your choice.
(Visit http://www.accountingservicesforbusiness.co.uk/calculators1/true-cost-of-an-employee/ to calculate the annual cost of your employees and http://www.itjobswatch.co.uk/contracts/uk/ccna.do for CCNA rates)
2) Access to Skills & Knowledge
The Internet of Things (IoT), mobile devices, smart cities, big data and the human fascination and dependency on technology facilitate the need for Cisco Engineers to specialise in certain tracks. You might have an in-house CCNA, or CCIE, but do they specialise in Unified Communications, Security, Wireless, VoIP, R&S and Data Centre? How many hours and years of training would be required to have access to such a varied and multi-skilled workforce in-house? How much would this cost your company?
Having access to the skills and knowledge of certified Cisco Engineers is the most significant reason to consider outsourcing your need for Cisco Support. Quality of service is often cited as a reason not to outsource, however if you focus on creating strict SLA’s and define a clear scope of work between your outsourcing partner, then you can achieve exemplary quality of service for your end customers.
If you outsource your Cisco Support then you simply pay for what you need and use. Replace outsourcing with employing the multitude of Cisco Engineers in-house and you’ll need to ensure you have enough work for the Engineers every day, 52 weeks of the year.
How much time and money do you think line managers and HR departments waste on frivolous staff issues? “Can I have a day off for the dentist?”, “I need to take my dog to the vet” and so on. Employees also are savvier with their knowledge of employment legislation and their rights – holidays, sick pay, pensions, maternity leave and more heavyweight issues such as unfair dismissal and equal rights. It’s not only your balance sheet at risk; it’s your Brand, reputation and credibility in your industry. Taking risks is part of business, but if you can avoid being exposed to such substantial risks then why wouldn’t you outsource.
Do you employ in-house or outsource and why? However opinionated you may be, please feel free to leave your comments.
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