The potential of convergence for SMEs

While the concept of convergence has been around for some time now, interest in the area is starting to shift away from pure cost reduction issues towards its ability to help boost staff productivity and organisational flexibility.

While the concept of convergence has been around for some time now, interest in the area is starting to shift away from pure cost reduction issues towards its ability to help boost staff productivity and organisational flexibility.

This change in focus is no less true of small- to medium-sized enterprises (SMEs) than it is of large corporations, but to make matters more complicated, the definition of what convergence comprises is also in a state of flux. It now no longer implies simply converged IP-based voice and data networks, but also includes converged fixed and mobile networks as well as increasing levels of network and systems convergence.

Angel Dobardziev, a senior analyst and service manager at market researcher firm Ovum, explained in a Computer Weekly webinar entitled The potential of Convergence for SMEs: “The borders are becoming more and more blurred. The whole technology space is increasingly coming together, so there’s more competition and it’s more challenging, but there are also new opportunities.”

For example, he indicated that while network and systems convergence can help cut costs, “there are also benefits related to different services coming together in one place such as having one point of contact for a service provider and one bill”.

Moreover, the more applications and functionality that are integrated into the converged network, the more advantages organisations are likely to experience in terms of increased staff productivity and convenience.

Ivor Kendall, general manager at BT Retail, agreed. He pointed to IP-based technologies such as unified messaging suites, which provide a single user interface to integrated communications and collaboration packages such as email, instant messaging, voicemail and video conferencing.

This means that not only can staff seamlessly access messages from their desktop, PDA or other device in the format of their choice, but they can also opt to be contacted in real-time, again in the format of their choice, no matter where they happen to be.

But Kendall acknowledged that few organisations adopt a rip-and-replace strategy, instead preferring to affect change in response to different events. These might include the need to replace aging infrastructure or enable the business to do something new to ensure that it continues growing.

“How you get there is different for everyone because not everyone has the same environment, but it helps if you can plan two or three years out and have a vision,” he says. “This means that you need to look at your user requirements, what applications have to be accessed and what infrastructure needs to be in place to underpin it so that you can respond adequately to compelling events and reach the goals at the end of your roadmap.”

One organisation that has done just that, however, is Damart Thermawear Ltd. The French company, which is best known for its thermal clothing range, operates in the UK, Belgium, Switzerland and Japan. In the UK, it employs 750 staff across three sites based in West Yorkshire and sells mainly via mail order to customers with an average age of 67.

In 2004, however, after four years of sustained growth, Damart discovered that its network infrastructure had almost hit capacity and would struggle to handle future business requirements.

Its 100-seat call centre had an old telephone switch installed, but this could only cope with a maximum of 20 more agents, which, according to Ian Auker, the organisations network and telecoms manager, ‘was limiting business growth’.

The company’s logistics site, seven miles from headquarters (HQ), was facing a similar problem. This facility had a 20-year old switch in place with capacity for only 25 extensions despite the fact that “70 per cent of all ‘phone calls from our remote sites involved talking to head office’.

Other cost-related issues included the high maintenance fees incurred by looking after the old switches and the fact that ‘phone extensions were all hard-wired, which meant that BT charged to move them if that became necessary.

To make matters worse, the available bandwidth at Damart’s assembly and mailing depot was so poor that printing could not be undertaken on site. As a result, invoices, statements and other documents had to be printed out 41 miles away at head office and delivered manually.

By June 2004, Auker had presented the board with a business case to replace the company’s creaking infrastructure with a more flexible IP-based voice and data network.

‘The justification was based on ceasing circuits, reducing maintenance costs and changing working practices. There was also the issue of the contingency of the call centre, which at its peak can handle over £100,000-worth of order per day, so losing it would be critical,’ he explains.

The call centre generates 30 per cent of Damart’s annual UK sales and handles over 100,000 calls each week so having effective disaster recovery services in place to keep it operational at all times is crucial.

Nonetheless, the IS department decided to take a cautious, phased approach to rolling out its new infrastructure, which took about 18 months. Auker explains the rationale: “If you get it wrong from the start, the confidence of users drops and it takes a long time to get it back.”

After IS staff had been fully trained in how to support a converged network, the first stage involved replacing the company’s wide area network with an MPLS-based one, which had a 4Mb tail at head office and 2MB tails at each of the other sites.

The next step was to upgrade its old local area network switches with Nortel 460, 470 and Passport 8300 IP-based ones, followed by the installation of an IP telephony switch, which supports 180 extensions at HQ.
By the third quarter of 2005, another IP telephony switch with 140 extensions was implemented in the call centre, where 20 IP ‘phones are now being used. This was supplemented in the first quarter of 2006 with new computer-telephony integration software to undertake functions such as screen-popping of customer account information based on their telephone numbers.

‘This helped us to reduce the average call time from three to two and a half minutes, which means we’ve increased our throughput, while maintaining the same staff numbers,’ says Auker.

Other benefits include free ‘phone calls across the three company sites and a single UK ‘phone reception point for incoming calls. Moreover, Damart no longer has to pay external fees to have extensions moved, but can rely on its own internal IS staff to do so.

As Auker concludes: “Our hand was forced, but our new infrastructure has allowed the business to grow and change, which is very important.”

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