Smarter networks key to cut costs

Making a country broadband-capable is not just about bandwidth and connections - it must be smart broadband.

That is the message espoused by Ross Fowler, Australia and New Zealand managing director of networking equipment giant Cisco Systems.

"If broadband does not have the capability for quality of service, multitasking and security built into it, it is not going to be able to support multimedia communications," Fowler told the American Chamber of Commerce in Auckland last week.

Cisco has found that organisations that combined an overhaul of their business processes with IT applications and intelligent information networking delivered three to seven times the productivity gains of those organisations that simply installed IT applications in isolation.

"Organisations that simply put in a web application or an IT application and then adjusted their processes to suit, on average their cost went up by 10 per cent," Fowler said.

However, average costs went down 30 per cent for organisations that started with business-process needs and designed and engineered IT application around that.

He said what may be overlooked was the importance of the network.

"It costs on average about 72c per employee per day to support wireless networking round Cisco.

The productivity gain every minute that employee connects to the network is $1.25. The payback is profound."

Fowler said applications such as video on demand, email, telephony, calendars, and instant messaging needed to be integrated with core business applications and processes.

"If I was travelling, I used to have to get my personal assistant to take calls or collect them from voicemail," he said. "Now, if I go into Outlook and set up my calendar, it communicates with the IP telephony system and tells it where to put my calls.

"So it is not about saving call cost and administration costs - it does that - but the integration process. To do that you need the organisation to put all applications and business processes on to one network, and that network needs to be secure."

"In future, there will be application-aware networks. The network not only needs to know it is carrying voice or video traffic, it needs to understand what application is generating that traffic, if it is a SAP application, a Citrix application, an Oracle application, and it will adjust resources in the network to suit."