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Phone system fable

Four bids, $115,093 price difference
Small Business Technology Alert By James E. Gaskin , Network World , 08/30/2007
James Gaskin
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You may remember me talking about Brian Padden last October in A Free Telephone Consultant. I touched base with him the other day and he told me about a recent project for a financial services company looking for a new phone system that would support 65 phones in two locations (60 in Dallas, five in Fort Worth). Padden organized presentations from four phone system vendors and three carriers. The final quotes covered an amazing range: $29,078, $39,970, $48,500, $66,335, $92,921, and $144,171. Yes, that's a $115,093 difference between low and high bids. Have you ever seen a better justification for serious comparison shopping?

Vendor 3 (the names are hidden to protect the gougers) provided three system variations to cover what it considered important upgrades and future growth options. Yet if the future is so critical, why did it offer only a one year parts and labor warranty, compared to the three and five year hardware warranties with one year labor included from the other vendors? Vendor 3's proposals were $66,335, $92,921 and $144,171. Even the lowest priced option cost nearly $18,000 more than the next highest quote.

After months of wrangling back and forth, the buyer decided to choose the telephone system vendor and carrier Padden recommended at the beginning. Does this mean you should trust your consultant? Certainly, if you also verify by looking at the submitted proposals.

Padden recommended the second least expensive vendor, at $39,970, over the least expensive. Part of the reason was the quality of proven hardware (the lowest cost option includes a brand new model) and partly because of the differing experience levels of the local suppliers. Installation experience and dealer reputation makes a big difference in something as critical as your voice communications. Do you want to say "the phones will probably be back up next Thursday" to your boss?

Three data carriers bid on the job, and the prices for dual T-1s were $1,182, $1,216, $1,554, $1,839, and $1,966 (two carriers included two options). These numbers don't reflect straight data line pricing because of variations in 800 lines, Direct Inward Dial numbers and the amount of phone minutes included per month. Still, a $784 per month difference between the high and low bids again justifies comparison shopping.

James Gaskin writes books (16 so far), articles and jokes about technology and real life from his home office in the Dallas area.

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Apples to ApplesBy Dave Magnenat on August 31, 2007, 5:54 pmI certainly agree that additional bids are good and that a differential between bids as described seems large. It's important to ensure the different bids are for...

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RE: Phone system fableBy Vic on August 30, 2007, 1:14 pmAgain, James Gaskin hits the nail right on the head. So many vendors, so many choices and so much confusion. There are discrepancies in price, quality and value...

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