Operations and Digital Networks – Cutting the Costs and Increasing Efficiencies

Understanding some of the larger groupings of operational costs can provide a framework for building more powerful and cost-effective Digital Signage networks.

Here we’ll consider some of the major logistical and strategic measures to take to create more cost-effective digital network operations.

 

The total cost of operations begins after any necessary capital investments are made to acquire the goods and services needed to launch or expand a network.

It is important to mention that the cost of operations should not be confused with the commonly used metric, total cost of ownership (TCO), even though it is an important part of the TCO calculation. It should also not be confused with the other key element of TCO, cost of acquisition, even though many people, especially those in sales, often make that connection.

Systems integrators can deliver the most value to their customers by going beyond typical launch tasks: procurement, integration and deployment. Actively engaging with the customer to help them understand the dynamics of acquisition cost and cost of operations as drivers of TCO makes the systems integrator a partner, rather than a vendor.

The advantages of a partner relationship can be big! The team at L Squared offers affiliate programs and we’re always looking for new installation and reselling channel partners. Interested? Why not get in contact?!

We pride ourselves on the power of Brent Nacu and our Business Development team to truly understand our customers’ network objectives, strategies and capabilities allows the integrator to guide the customer to optimal decisions on acquisition of equipment, software and services.

Understanding some of the larger areas of operational spend is useful and can also help provide the framework for making the right capital investments.

Here are a few of the important post-deployment cost drivers:

Content Management

All of the tasks associated with development and acquisition of content, programming, management of content assets, scheduling and monitoring the network drive operational costs. In short, content management is people and process oriented, and greatly impacted by tools and services that support both.

An integrator who develops a shared understanding of the customer’s content and network strategy can help develop the processes and identify the tools that optimize employee utilization and workflow. Automated procedures, streamlined interfaces and powerful tools associated with projected tasks can reduce the headcount required for this critical set of responsibilities, with a dramatic impact of total cost of operations.

Software and Fees

The most common operational cost associated with software relates to subscription fees for software-as-a-Service (SaaS) platforms, the most common delivery method in the industry today. SaaS deployments can certainly reduce acquisition costs, as there are typically no purchase or deployment costs. However, understanding how vendors charge for their service can mitigate ongoing operational costs. For example, many modern media players can support two separate outputs.

Certain vendors charge by screen (output), while others charge by connection (player). If your customer can utilize dual output players smartly and pay SaaS fees by the player, the ongoing software costs can be as much as 50% lower than a deployment of all-in-one (system on chip, or SoC) displays or other architectures that by definition charge by the screen for SaaS. The operational savings can greatly outweigh any reduced capital expenditure in the calculation of TCO.

Customers with larger networks (greater than 1,000 end points) and sophisticated IT capabilities may realize significant operational cost savings by considering an enterprise software licensing arrangement.

In an enterprise license, blocks of seats are licensed for an upfront capital investment, and the ongoing operational cost is related to maintenance fees that are typically a fraction of SaaS fees, plus the IT costs of maintaining servers and a content distribution capability. It is wise to bring enterprise licensing into the discussion with large clients, and to understand options for that type of arrangement available in the marketplace.

Field Service

Because digital signage involves electronics, occasional failures in the field will be a fact of life. Cheap devices tend to skimp on parts that fail most often, such as power supplies, so beware!

While warranties will cover most equipment failures in the first one to three years, network downtime, truck rolls and depot stock can drive operational costs up. In situations where uptime is mission critical (for example, digital menu boards), redundancy and failover strategies are as essential as warranties.

It may be important to consider the use of multi-output players and to weigh the external media player against SoC options for mission critical applications. To keep truck rolls and tech time to a minimum, aim for high reliability, clever failover strategies and consider upgraded warranties in the acquisition process.

Upgrades

You can bet that two years into a new network, your customer will have developed new requirements that may demand more firepower than was designed into the initial equipment purchases. At a minimum, you should ensure that the software vendor could provide software upgrades and patches over the network. Hardware upgrades require more forethought.

Displays tend to have a longer useful life than media players, so once again, the lure of the SoC sales pitch comes at a cost: getting that extra firepower requires an entirely new unit, including the display. If your customer can foresee expanding requirements, it may be useful to have a separate media player or an OPS-based player-display set-up to ensure a simple upgrade path.

In a digital signage network, total cost of operation is separate from capital investments made to launch, yet is closely tied to those up-front decisions. Together they form the basis for total cost of ownership.

Want to learn more? Contact our team and we’d be happy to discuss the most cost effective, high-yield networking options available to your business.

 

 

 

Article Source: http://www.lsquared.com/blog/digital-signage/operations-and-digital-networks-cutting-the-costs-and-increasing-efficiencies/

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