Make sure of the maximum benefit

What exactly should you expect to see in the way of payback from a converged network? Cath Everett outlines how you can turn...

What exactly should you expect to see in the way of payback from a converged network? Cath Everett outlines how you can turn potential in to real business benefits

People have been talking about the potential benefits of voice and data network convergence for at least 10 years, but the reality has been slow to materialise. This, says Duncan Brown, a consulting director at IDC, is because in the past, the technology was simply not cost-effective to implement and service quality was not up to scratch.

But he believes, the situation has changed in the past couple of years, following "huge strides in resilience and quality of service issues, so it is now a viable alternative and the market is ripe for growth".

"We've been at the early adoption stage for the past two to three years, but we're now seeing a pick-up in demand, especially in the UK," says Brown.

Zeus Kerravala, vice president of enterprise infrastructure at the Yankee Group, also reckons that while the sector is still in its infancy, converged networks are likely to hit the mass market adoption stage over the course of the next five years.

"About 20% of organisations have a converged network running somewhere in production, maybe in an internal department or at a branch office, but in five years' time we expect that to be about 60%. People are gaining confidence in the technology and are starting to develop roadmaps, so it's going to happen," he says. This means that while the IP telephony market is currently worth about $2bn worldwide, or $3bn if multimedia applications such as audio and video are added to the mix, Kerravala expects it to double in value by 2009.

But any moves by early adopters are mainly event-driven, he says, with companies looking to replace older phone systems when they move to new buildings or set up new offices.

In fact, most are simply deploying IP phones at a single site to create a backbone that they can build on for the future, although another key driver is to cut management overheads associated with looking after two networks.

Efficiency enhanced

Mark Blowers, a senior research analyst at Butler Group, explains: "It simplifies things. You don't have to run and manage two networks or two sets of vendors, and you get an integrated view of the service, which can generate great savings."

Because IPT makes it easier to incorporate voice services into applications - as has happened in a raft of recent call centre deployments - staff productivity and efficiency can be significantly enhanced. Moreover, being able to understand who the caller is to enable immediate call routing to the correct customer service representative not only saves time, but can also boost customer satisfaction levels.

But big cost savings can likewise be brought to bear when organisations decide to hook up multiple offices generating heavy branch-to-branch call traffic. Sectors likely to benefit from lower telephony charges include professional services, retail, local government and manufacturing, where the workforce is generally either mobile or distributed across numerous locations.

Here, Kerravala indicates that although it is still the exception rather than the rule, some companies are extending their converged networks to remote and mobile employees so they can take advantage of applications such as unified messaging.

These suites provide a single user interface to integrated communications and collaboration packages such as email, instant messaging, voicemail and video conferencing, and enable staff to access them seamlessly from their desktops or any other device they choose, wherever they happen to be.

This not only makes such packages easier to use by "removing human latency from the collaboration process", but also ensures that tasks are not delayed, because your staff can be contacted in real time no matter where they are.

High uptake

Interestingly, however, says Adam Walker, senior marketing manager for BT's convergence portfolio, the appeal of unified messaging is unusually high for companies like yours because it can "give smaller companies a big company feel and give the impression that they're bigger than they are". But this phenomenon also reflects the uncommonly high uptake of converged networks and IPT among SMEs and at an early stage market too.

"While pure IP networks have been adopted by 3%-4% of companies, with a slight bias towards large organisations, many SMEs are making decisions to ensure that they're going in the right direction," Walker says.

Other organisations, on the other hand, are starting to prepare for the future, but are opting for a more cautious approach by purchasing what he calls 'hybrid switches'. These devices are IP-enabled, but if customers add a special module they can still use their existing analogue phones rather than have to invest in new IP-based ones.

"Many firms are opting to buy future-proofed platforms so they can make incremental steps towards the end goal. They're moving their infrastructure over gradually by dealing with different chunks at a time because they're cottoning on to the fact that this is the way the market is going and they don't want to be left behind," says Walker. n

Heinz

"We initially put in a converged network as a cost-saving exercise, but we've now realised those. So we're currently looking to sweat the assets and deliver on other types of functionality that this type of network is capable of," says Allan Jackson, European voice manager at Heinz.

Heinz is one of the most recognised brands in the world and at first glance has nothing in common with companies such as yours. However, Heinz is a great example of implementing convergence and its success has been mainly a result of insight and strategy rather than from having huge resources at hand. The organisation first went down the convergence route in December 2000 when its European headquarters moved to a new building in London and it took advantage of the opportunity to implement a voice over internet protocol (IP) network to cut the costs associated with voice traffic.

The technology has since been rolled out to 22 of its largest European sites as and when existing PABX systems came to the end of their lives. "This was obviously the platform of the future and the cost of international calls was a big issue for us because they were very high, but our new network reduced those costs as soon as the European sites came on-stream," says Jackson.

Heinz moved the initiative into its next phase about a year ago, however, by introducing videophones from Tandberg, initially to enable its Baby Food teams in Milan and the UK to communicate more effectively with each other, although the technology has now been adopted more widely across the business.

"The aim was to reduce travel, plain and simpleÉ introducing videoconferencing gives them alternatives in a climate of needing to save costs," Jackson said.

Over the coming months, Heinz likewise intends to raise the profile of the technology among partners, suppliers and customers, to encourage them to adopt or use it if they already have it in place.

But the organisation is also in the planning phase of introducing Cisco's MeetingPlace voice and web conferencing software to those home workers with a broadband connection. The package enables users to share applications once they have been conferenced together and is intended to boost productivity and efficiency.

To this end, Heinz is likewise looking at delivering media-rich online training and providing staff with video-on-demand capabilities for both training and internal communications purposes.

Four Seasons

"Because we were moving our accounting function to a new building in Darlington, we thought it was an ideal opportunity to put in a new platform that we could use for the future. With so many sites across the country, we felt there were real benefits in implementing convergence technology," said John Brogan, group IT manager at Four Seasons Health Care.

The company is based in Wilmslow, Cheshire, and is the largest care home operator in the UK. It looks after over 15,000 people in more than 300 care homes and eight specialised hospitals.

After acquiring Darlington-based Tamaris Healthcare in September 2002, the organisation decided to consolidate 60 staff from three separate offices, who primarily undertook finance and central IT support functions, into larger accommodation.

"Although a converged voice and data network was slightly more expensive to implement, it would otherwise have meant dealing with two different suppliers and maintenance, so if you add the cost of management time, it was about the same," says Brogan. "We also felt the benefits for the future would more than justify the upfront cost." These increased costs were generated mainly by buying IP handsets, which cost about £200 each, he adds.

Four Seasons has now linked up the converged network in its Darlington office to its Wilmslow headquarters and a hospital in Roehampton, south west London. It plans to introduce unified messaging applications here over the following year.

Next year will also see the introduction of at least one IP phone at each of its care homes after the organisation rolled out broadband last year, although full voice over internet protocol (VoIP) implementation across all sites will not take place until older equipment needs to be replaced.

"We've already made savings on inter-site phone calls, and while it didn't add up to massive amounts of money last year, because of the number of locations we have, there is the potential there to save enormously on calls between the homes and HQ," says Brogan.

He also sees future potential for applications such as videoconferencing, and adds: "Convergence offers the potential for many things that we probably haven't even thought of yet, but the key is that we now have the backbone to build upon."
This was last published in January 2005

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