AOTMP® Insights: October 2020

TABLE OF CONTENTS

THE ECONOMICS OF CLOUD COMPUTING ................................................. 04

CLOUD AUDIT & OPTOMIZATION........................................................................07

A SERVICE PROVIDER’S PERSPECTIVE ON CLOUD................................... 12

CRITICAL CONCERNS CHANGE WHEN CONTROLLING CLOUD......... 13

AOTMP® ADVISORY..................................................................................................... 16

#BECYBERSMART NATIONAL CYBERSECURITY AWARENESS MONTH................................... 17

MEMBER SPOTLIGHT - JOHN HILL. .................................................................... 18

WELCOME NEW AOTMP® MEMBERS............................................................... 19

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CLOUD SPENDING IS UP—AND SO IS THE BUZZ AROUND CLOUD ECONOMICS. Cloud computing is one of the most sought-after IT investments right now. Cloud is also one of the least understood technologies in terms of costs and economics. Especially now, amidst global economic uncertainty, organizations must be smart about how they consume cloud services to optimize costs and drive value. THE ECONOMICS OF CLOUD COMPUTING BY: ASHLEY SPEAGLE, CONTENT MARKETING SPECIALIST AT VMWARE

CLOUD SPENDING ON THE RISE AMIDST A PANDEMIC Global researchers at Gartner project worldwide IT spending to decline by 8% in 2020 from 2019. “The coronavirus pandemic and effects of the global economic

recession are causing CIOs to prioritize spending on technology and services that are deemed ‘mission- critical’ over initiatives aimed at growth or transformation,” Gartner spokespeople write in a press release. Despite belt-tightening measures, many organizations are projected

to ramp up public cloud spending. “In 2020, some longer-term cloud- based transformational projects may be put on hiatus, but the overall cloud spending levels Gartner was projecting for 2023 and 2024 will now be showing up as early as 2022,” says John-David Lovelock, distinguished Research Vice President at Gartner.

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“WHEREVER GDP IS, TECH WILL BE BETTER. AND SOFTWARE AND CLOUD WILL BE BETTER THAN THAT.” Pat Gelsinger, CEO, VMware One reason for increased cloud spending: to support the computing needs for unprecedented numbers of remote workers. Most organizations quickly embraced remote work when the COVID-19

pandemic shut down public spaces, like office buildings. Even after restrictions lift, 55% of U.S. employers anticipate employees will continue working remotely at least one day a week, according to a June survey by PwC. Similarly, organizations rapidly adapted customer experiences to the new digital norm by turning to

public cloud services.

Another reason: organizations see cloud services as an effective way to optimize costs. One of the key benefits of cloud computing is the ability to consume services as needed and to pay only for what is used. So, it’s ironic that enterprises waste billions of dollars spent on cloud.

CloudHealth by VMware analyzed the average cloud spend of its customer base—more than 10,000 companies worldwide— during the COVID-19 pandemic. “Despite the fact that the dip from January to February was greater than usual, the months of March-May did have a net increase in cloud spend.”

WHAT A WASTE: 4 BLIND SPOTS IN CLOUD SPENDING “People often make incorrect economic decisions, especially when dealing with the cloud,” says Bill Roth, Director of Cloud Economics at VMware. “What we see, generally, is that there are four types of blind spots, or that they’re triggered from biases that people make when they make cloud decisions.”

WHAT IS CLOUD ECONOMICS?

This is an especially important conversation as enterprises extend their data center to the cloud for business continuity. “84% OF BUSINESSES RECOGNIZE THAT THE ECONOMICS OF MANAGING WORKLOADS IN CLOUD ENVIRONMENTS IS VITAL TO LONG-TERM SUCCESS.” IDG Study, Sponsored by Dell Technologies

Due to the tremendous benefits and risks of cloud investments, cloud economics is a hot topic. Cloud economics is the study of total cost of ownership and return on investments for cloud solutions, as well as the economic principles driving decisions.

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REFACTORING & REWORK “Oftentimes, the switching cost—the cost of moving from one platform to another—is minimized or overlooked,” Roth says. “The amount of time to refactor and rework to move, for example, from one type of cloud to another, with different Application Programming Interfaces (APIs) and with a different Virtual Machine (VM) format, is often underestimated.”

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OPTIONALITY & LOCK-IN

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REALIZING THE BENEFITS OF CLOUD The cost-saving benefits of cloud computing are within reach. According to an IDG study with executives of large enterprises in EMEA, well- managed cloud environments

“Decisions often get made because people undervalue the risk of what happens if I move to a platform and what will it take for me to unwind that and give me other options,” he continues. “If I move to a platform does it increase my options? Does it decrease my options? So it’s often a blind spot.” OPERATIONAL COSTS “Operational costs can change,” Roth says. “You’ve got to pay particular attention to egress costs and understand your network flows.” Egress fees are a provider’s costs of moving data out of their public cloud. Additionally, partners that manage cloud solutions can save administrative overhead costs by performing upgrades and updates for you, he points out.

derive an estimated 26% reduction in IT operations overhead.

Organizations with an understanding of cloud economics will be in a better position to optimize cloud costs now. Long after the current crisis, a well-designed cloud strategy will also help them be ready for the future. After all, “the amount of data that companies must store and manage is not going anywhere. Increasingly, even more of that data will be stored, managed and increasingly also analyzed in the cloud,” says Stephen Minton, Program Vice President in IDC’s Customer Insights & Analysis group.

TALENT RESKILLING “Because platforms often

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require new thinking and new technologies,” he says. “People often underestimate how they can get access to talent or how they can scale people up.”

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October 10, 2020

CLOUD AUDIT & OPTIMIZATION BY KATE MARBURGER & BRENT WALTZ

OVERVIEW Although every organization has someone overseeing the utilization of its various cloud services, the organization’s size often drives where that responsibility resides. For example, smaller to mid-size organizations might see cloud administrators and auditors reporting to business unit managers. This could include a Sales Manager of a small organization overseeing administration and tracking with the Customer Relationship Management tool. Larger organizations may place this responsibility within the C-Suite and their direct reporting structure. Regardless of where the responsibility resides, it is important to routinely audit, and then optimize, those services. FUNDAMENTALS When considering an audit for your cloud-based tools and assets, organizations will want to make sure they are choosing the appropriate options based on their needs. These decisions can come down to a few options. One decision that needs to be made is whether this will be an internal audit completed by

the organization or an external audit that is outsourced to an outside company. Your decision may depend on the size of your organization. Typically, small to mid-sized organizations perform 60% of their audits internally and outsource an estimated 40% externally. Conversely, due to capacity and the amount of work required, larger organizations will frequently outsource their auditing needs up to 75% of the time. Larger organizations should also consider employing a person that specializes in auditing cloud costs full-time, due to the complexity of the role. Another decision to consider is the audit type. When an organization decides to conduct an audit, there are two types they want to consider: technical and financial. A financial audit will be performed when an organization wants to ensure incurred expenses match up with the services they utilize, such as an invoice-to-inventory audit. A technical audit is necessary when an organization wants to confirm the services being utilized match what the cloud service provider has promised from a performance standpoint. One example is a security control audit.

However, not all audits fit under just one of these umbrellas-- usage management auditing can fall in either financial or technical, depending on whether the organization wants to optimize. You may focus on whether users are taking advantage of the service in a financial user management audit. A technical user management audit might instead investigate whether the organization is utilizing the full scope of software packages. When beginning an internal audit, you also want to ensure there is a plan in place for documenting all information. Make considerations for audit tracking tools, process improvement documentation, and implementation of ongoing management. Ongoing management could include logging licenses when new employees join the organization.

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PROCESS The audit and optimization process features five stages (or steps). At a high level, these are:

STEP 1 Gather Information

STEP 2 Analyze & Catalog

STEP 3 Identify Errors

STEP 4 Correct Errors

STEP 5 Verify updates

Although each of those steps feature numerous sub-steps, these headings give you an idea of what they entail. You are encouraged to complete AOMTP® University’s Intermediate Audit & Optimization for Cloud course (CLM204) for more detailed information on this process.

BEST PRACTICES WHAT DO I NEED TO GATHER? A successful audit will require copies (either physical or digital) of all available contracts, invoices, usage reports, and licensing reports. You will want to confirm the type of audit you are conducting, either financial or technical, before gathering materials. A financial audit requires you to gather contracts, invoices, and license and asset management reporting. Technical audits may require contracts, Service Level Agreements (SLAs)s, security and privacy reporting, performance/ SLA reporting, storage utilization reporting, and/or user utilization reporting.

WHAT DO I NEED TO CATALOG? You will need to create interactive catalogs so that all the gathered information can be cross- referenced with ease. Capture within your chosen audit tracking software (either a solution you have purchased specifically to help or an ad hoc Excel document you have created), all relevant information for your audit. Different audit types necessitate the recording of different data types.

also includes confirming that the usage reports match the actual environment by verifying not only usage itself, but locations and service providers as well. You will also need to verify the services being used, along with the features and costs associated with those services. Finally, you will likely need to verify the completion of previously requested service orders (including MACD requests).

• Security incidents • Compliance Controls • Network Security Reporting

CLOUD SECURITY AUDIT

CLOUD SOFTWARE AUDIT

• License Usage • License Charges

HOW DO I COMPLETE MY ANALYSIS?

To complete an analysis, you will need to be able to interpret contracts and to analyze invoices. This includes verifying the billed amounts on invoices align with the amounts listed in the contract. It

• Contract Agreements • Month to month charges • Fees • usage data

CLOUD STORAGE AUDIT

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HOW DO I IDENTIFY ERRORS? In this step of the process, you will focus on contractual errors, inventory/asset exceptions, and optimization opportunities. In a security audit, you’ll find errors through internal checks on many areas: the structure of the environment; policies and procedures for risk management, access controls, and data management; security training materials; and security monitoring tools. To identify errors in a storage audit, look for costs and fees associated with your online file storage service provider that are incorrect or can be optimized to save costs. These errors may include charges for unnecessary features or inaccurate usage reports. For a software audit, expect to find errors such as lack of license use and inefficiency license utilization. These issues may be identified in the onboarding process if your organization is purchasing new licenses for new hires without first reviewing current utilization and assignment of licenses. Reviewing utilization can reveal licenses

assigned to former employees, how often employees are using the software, and for what purposes employees are using the software.

quarterly audit of all contracts, invoices, and asset tracking for accuracy and correctness. Additionally, large and mid-sized organizations should consider outsourcing one of these quarterly audits to an outside company as a control measure. The external company should help to identify further optimization strategies.

HOW DO I CORRECT MY ERRORS? The next step includes

correcting contractual errors and implementing any optimization opportunities. Correcting errors includes standardizing the MACD process and implementing regular CSR versus MACD reviews. AOTMP® suggests conducting security, storage, and software reviews biannually. Correcting security errors may require updates to organization procedures or new staff training. Storage and software errors will likely require negotiations with the cloud service provider, whether to discuss the overcharges and receive a refund or lower the organization’s license count. HOW DO I VERIFY THE ACCURACY OF MY AUDIT? To verify the updates and cost savings are accurate, your audit team should set up an ongoing

CONCLUSION Audits have many steps,

requirements, and moving parts - but you don’t have to go it alone, even if you are a ‘team of one.’ There are a variety of tools that can help make the process smoother. When managing your cloud services, one of the most important tasks will be your tracking and documentation. While smaller to mid-sized enterprises may use spreadsheets for asset tracking, a best practice would be to use some form of an asset management software tool. These tools are useful, as they not only track inventory and use, but they can also help with tracking maintenance schedules, service requests, analytics reporting, contracts costs, and location data.

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A SERVICE PROVIDER’S PERSPECTIVE ON CLOUD Today, 94% of companies are using cloud technology. So why are enterprises adopting more cloud services today than ever before? And which challenges are they most likely to encounter as they do? We asked Mark Hearn, President and CEO at Network Control, to share his thoughts and shed some light on the evolution of today’s enterprise cloud environment. Here’s what he said!

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October 10, 2020

CRITICAL CONCERNS CHANGE WHEN CONTROLLING CLOUD By: Mark Bellingham, Product Management Director at Calero-MDSL

As your company migrated IT operations to ‘the cloud’ they also implemented the system management, performance monitoring, and security controls your IT team would need. They probably neglected the management, performance monitoring, and security controls your Finance team would need. CLOUD COSTS & CONSEQUENCES One of the best ‘selling points’ for moving to the cloud was the idea that you could change from capital investments (CapEx) to operating expenses (OpEx) which were said to be far more predictable, budgetable, and manageable than the expenses involved in running your own data

center or network room. Expenses like electrical power, internet access, high-volume air conditioning, equipment maintenance, and more would all be replaced by one monthly expense. That would suggest that all you’d need to do to manage the expense would be to count the number of ‘seats’ or users connected to the cloud and check that against the monthly invoice. It seemed so simple. HOW CLOUD’S CONSUMPTION- BASED BILLING COMPARES TO ON-PREM Another ‘selling point’ for cloud computing was the idea that, according to the National Institute of Standards and Technology (NIST)

definition of cloud computing, users could request and release resources as they needed to and would only be billed for resources consumed. Consumption-based billing also seemed like a dream come true for the finance department, reducing expenses or at least aligning them to the value of the work performed. Things were very different when your entire network was installed on your own premises. Finance could assess each of the expenses involved easily enough and allocate the capital investments which would estimate how much IT cost to each of your departments so they could perform bill-backs to calculate each departments profit and loss. It wasn’t precise, and took a considerable

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amount of work to perform each period, but it represented ‘good’ or at least ‘adequate’ control. Since cloud computing was completely digital and everything generates data about its utilization, the move to the cloud promised far more precise control over expense, and far easier distribution for bill-back. This had wide- ranging implications for the cost of operations, cost of goods sold, and other related costs for which computing was part of the process.

Perhaps you noticed that the learning only included how to request resources, with no mention of how to release them when done. Users were leaving resources active for long periods of time without releasing them, incurring additional billing. The more users, the more empty consumption, the higher the bill for overages. The other contributing factor was visibility. Nothing warned these new cloud tenants that they were reaching their regular billing threshold. As Peter Drucker taught, “you cannot manage what you do not measure.” The cost of cloud computing was, simply, not being managed. INVISIBLE COSTS IN A SET-IT- AND-FORGET-IT WORLD Recurring costs become almost completely invisible over a short period of time. In earlier times, you’d have telephone service provisioned, everyone got dial tone, and all was good. It wasn’t long before you had the bad feeling that your overall telecom costs were getting out of control. When you brought experts in to analyze your telecom costs, they found that a greater proportion of your usage than you ever dreamed possible were for internal location- to-location calls and faxes that could have just been additional traffic across your data network. They identified numerous accounts that were simply no longer in use by anyone, yet you were still paying for them every month. The various carrier programs you were subscribed to were far from being the most cost- effective for your organization.

These revelations and more were quickly corrected but didn’t remain corrected for long. Over a short period of time your communication costs ballooned again. So, you had the analysts back in, regularly. In those days, your only recurring costs were for telephone and internet access. Communication costs. Easy enough to define and maintain some control over. In the cloud-computing environment, everything is recurring. Productivity suite utilization, cloud data backup service, cloud security services, Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Everything-as-a-Service (XaaS). Each features recurring periodic billing, many include consumption- based billing, and once you’ve set any of them up, they become invisible almost immediately. You no longer think about them. You don’t proactively manage them. You just keep paying for them.

THEN CAME THE BIG, BAD SURPRISE

Financial executives anticipated far better control over cloud computing than they had over figuring out who used how much of what on their own premises-based infrastructure. They hadn’t considered the role of people in their calculations, especially when dealing with invisible costs. A few months into their cloud subscription, many companies received an invoice from their cloud provider. This invoice included the amount due for their subscription level and then listed consumption overages. Many financial executives were floored by the overages. Tens to hundreds of thousands of dollars in overages. What had happened was simple enough to figure out. Once the cloud migration was completed, users were enthusiastic about getting back to productive work and trying out these new cloud-based services. They immediately went about learning how to request resources and set up their workspaces and workloads.

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The thing to think about is that this scenario plays over and over again with each new cloud service you add. Unless you establish proper controls to manage each cloud expenditure, you may find yourself facing more of the downside with less of the available upside. Recent changes by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) exacerbate the problem, according to a July 2018 article in Forbes, increasing the need for OpEx controls. ESTABLISHING PROPER CONTROLS – FAR EASIER IN THE CLOUD The good news is that it is far easier to establish and maintain proper controls over cloud services spend than it ever was when your network was local. If your hesitation to establish controls was based on how onerous it had been to gather all the invoices and allocate, take heart. Every cloud service is completely digital, and each generates all the

data you need to properly monitor and manage them. This means you can obtain all the benefits of a fiscally responsible IT function without having to invest tons of man-hours in manual processes. Putting the tools into place to obtain all this data in a way that makes it easy to gain full visibility into everything that is happening pays an ongoing stream of benefits and return for you. On an ongoing basis you will identify idle resources that a user didn’t release, making it easy to stem that unnecessary flow of dollars, and giving you the opportunity to educate and motivate that user to release resources when finished with them. You’ll also be constantly aware of how close you are to incurring overages based on consumption-based billing so you can take appropriate action. Unused accounts will become obvious, reducing the incidence of you re-purchasing new licenses when new users could simply take over the existing account of a now- departed user. Since your tools connect to every cloud service through an Application Programming Interface (API) you will never sort through paper invoices again. Instead, the cloud services will simply report their activity to you constantly. The right tool will even recommend superior pricing programs that you should be taking advantage of so you don’t end up paying any more than you have to. You will enjoy unparalleled visibility into ongoing operations and total control over costs.

Over the past several years, many Line-of-Business (LoB) managers have gone rogue by subscribing to cloud services themselves to support their departments. Creating what is popularly called ’shadow IT.’ The downsides of shadow IT are numerous. Loss of cost control. Loss of operational control. Serious security lapses and breaches. An end to regulatory compliance, with all the attendant dire consequences. The creation of IT ‘silos’ which lead to significant process, expense, and data duplication. No leveraging of volume-based provider programs. If a shadow IT rogue simply connects through your network, your monitoring tool will see it and alert you to take immediate action to bring them in out of the cold. Otherwise, your well-controlled cloud network will completely justify your case when you ask senior management to stop the shadow IT operation or allow you to help manage and support it, and the LoB protests. IMPLICATIONS FOR PROACTIVE PLANNING Having full information regarding the utilization and performance of your cloud services over time informs and fine-tunes your ability to forecast future costs and model possibilities to accommodate growth, diversification, acquisition, or other major business changes. It is said that the difference between the great company and others is that the great company knows its costs. At all times, you will know not only your current and period-to-date cloud costs, but also have an excellent estimation of future costs as well.

MANAGING THE POLITICAL LAYER OF YOUR NETWORK

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AOTMP® ADVISORY

AOTMP® Advisory delivers know-how and actionable insights backed by telecom, mobility, and IT management experts that understand what works, what doesn’t work, and what drives optimal business results. Guided by Efficiency First® Framework practices and principles, Advisory helps customers optimize business performance and AOTMP® Advisory subscribers have unlimited access to AOTMP® Industry Advisors, Performance Advisors, and Best Practice Advisors.

Industry Advisors — telecom, mobility, and IT management industry experts

Performance Advisors — Efficiency First® Framework performance experts

Best Practice Advisors — Efficiency First® Framework best practice experts This month, AOTMP® Advisory is featuring a new workshop topic available to business and public sector advisory subscribers.

PERFORMANCE CHECK-UP: MAXIMIZING TEM VENDOR PERFORMANCE Description: TEM (Telecom or Technology Expense Management) vendor solutions cover a broad spectrum of software applications and services. From invoice processing to lifecycle management, achieving the best possible performance from a TEM

AGENDA: • Review and score current state solution alignment against business requirements • Review and score service level agreement (SLA), service level objective (SLO), and service guarantee performance • Review and score customer experience alignment against business expectations • Review and score the quality of data, information, reporting provided • Review and score the overall business value of the relationship

vendor is every customer’s desire. This interactive workshop produces an Efficiency First® Framework performance scorecard with a recommended action plan for achieving peak performance that you can share with your TEM vendor.

Duration: 90 minutes

Led By: AOTMP® Performance Advisor

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October 10, 2020

OCTOBER: IT’S NATIONAL CYBERSECURITY

AWARENESS MONTH The Cybersecurity & Infrastructure

Security Agency (CISA) and the National Cyber Security

Alliance (NCSA) have themed this year’s campaign “Do Your Part. #BeCyberSmart”. It’s catchy and relevant. Both organizations have also provided a host of resources and social media content to help get the word out – checkout the links provided above. That’s the ‘what’ and the ‘why’ seems fairly obvious – be safe your cyber journeys to protect your data/ identity/money/business from bad actors lurking everywhere you may roam. We all know that cybercrime is a global threat and we should be vigilant and mind our personal and business bits and bytes. This year, though, has felt different due to radical shifts in personal and work lives caused by COVID-19. The increase in cyberthreats during the first quarter of 2020 was significant and covered a variety of threat vectors. Preying on public and private concerns over COVID-19, bad actors schemed and scammed in attempts to profit from pandemic-induced uncertainty. According to the McAfee Labs COVID-19 Threats Report published in July 2020:

• 458 Publicly disclosed security incidents occurred across the globe in 1Q20 (a 41% increase from 4Q19) • 375 Malware threats per minute were observed by McAfee Labs in 1Q20 • New mobile malware increased 71% during 1Q20 compared to 4Q19 • The amount of threats from external actors targeting cloud services increased 630% • The largest increases in internal and external threat events in cloud accounts from 4Q19 to 1Q20 occurred in these industries

Z Z Z Z Z Z Z Z Z Z Z Z

Transportation & Logistics – a 1,350% increase

Education – a 1,114% increase Government – a 773% increase Manufacturing – a 679% increase Financial Services – a 571% increase Energy & Utilities – a 472% increase

These increases are significant and a clear indictor of the necessity to remain vigilant in the fight against cybercrime. Let’s all do our part

this October and beyond to protect ourselves, our family, our friends, and our businesses from persistent and growing cybersecurity threats.

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JOHN HILL TELECOM ANALYST

1. How long have you been a member of AOTMP®? Since 2018 2. Why did you join? I joined AOTMP to learn and network with other professionals in Telecom Expense. I also wanted to be part of setting the direction for the industry. 3. What Working Group(s) do you currently volunteer with? I am currently coordinating the Improving the Business's Strategic Perception of Telecom / Mobility & IT Working Group Meeting. I have previously worked on the Telecom Maturity Levels Work Group 4. What do you enjoy most about volunteering? Getting to know other members and learning from them. They are fun to work with and always willing to share their experiences. 5.What advice would you give a new member? I would tell new members to get involved in working group and get to know other members. No one knows everything and we all have something to offer.

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October 10, 2020

Abhishek Agarwalla joined as Premium Service Provider Member; Abhishek is the Practice Lead with Inspiredge IT Solutions LLC

WELCOME NEW AOTMP ® MEMBERS!

Greg DeMayo joined as an Elite Service Provider Member, Greg is the Chief Revenue Officer at Profit Enhancement Services, Inc.

ARYZTA, LLC joined as a Corporate Bronze Business member

Brian Durocher, VP, Information Technology William McCoy, Telephony Engineer Tony Torres Olaf Morales, IT Billing and Telecom Support Analyst Kurt Fryzek, Manager, IT Client Services

John Buccola joined as an Elite Service Provider Member, John is the President & CTO at Profit Enhancement Services, Inc.

Dawn LaRosa, joined as a Premium

Tracy Theil joined as a Premium Business Member; Tracy is TEM with UNISYS

Business Member, Dawn is the Corporate Telecom Analyst, Team Lead at TravelCenters of America

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CALENDAR OF EVENTS

October 22, 2020 – Online Member Meeting November 18, 2020 – AOTMP ® New Member Orientation January 21, 2021 – Online Member Meeting February 24, 2021 – AOTMP® New Member Orientation March 30, 2021 – AOTMP ® New Member Orientation April 22, 2021 – Member Meeting May 26, 2021 –

AOTMP ® New Member Orientation June 30, 2021 – AOTMP ® New Member Orientation July 22, 2021 – Online Member Meeting August 25, 2021 – AOTMP ® New Member Orientation September 29, 2021 – AOTMP ® New Member Orientation October TBD – Member Meeting November 24, 2021 – AOTMP ® New Member Orientation

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