With 75% of the world’s voice traffic predicted to be IP-based by 2007, most firms need to decide not whether to make the move, but when it would be most beneficial
Many would argue that the debate about voice and data convergence is over. Business consultancy Frost & Sullivan has forecast that voice over IP traffic will account for about 75% of the world’s voice traffic by 2007.
Increasing numbers of businesses have realised that migrating to a single, converged IP communications network, supporting services such as IP telephony, video conferencing, unified messaging, rich-media collaboration and IP contact centre applications, can deliver business benefits beyond the reduction in call costs that has been the traditional driver for VoIP.
A converged IP network is a platform that delivers business agility and flexibility, enhances employee productivity and customer care, and can reduce operational costs.
Reports show that IP communications deliver a return on investment within 16-18 months 70% of the time. With the elimination of leased line charges, lower maintenance and management fees translating into 20% to 50% savings, the wave of adopters is rapidly building momentum.
Lloyds TSB, for example, has recently announced the roll-out of 70,000 IP phones. It is not alone in recognising the business value of IP communications. BT’s announcement that it intends to transform its telecoms infrastructure into a pure IP-based network by 2009 is a clear example of broadband driving migration to a full IP network.
Jeff Snyder, vice-president and chief analyst at Gartner, said, “Organisations have stopped asking why they should implement IP telephony and are now focusing on when.”
So a full-scale adoption of IP communications is inevitable for business, but how do you choose the right time to migrate? For the past 20 years we have typically communicated using three separate networks, one for data, one for voice and one for video. Businesses now need to select an appropriate juncture at which to introduce an IP converged network.
Typically, a compelling event dictates the investment in a new communications infrastructure. This could be an office move or the end of a private branch exchange (PBX) lease. This would be an ideal opportunity to invest in IP communications.
However, businesses should investigate their current communications environment to see whether they could benefit from a move to IP communications without waiting for events to prompt the change. Savings can be made in the eradication of inter-site call charges, video conferencing charges, reduction in maintenance charges and operational management overheads.
“When considering when to implement IP telephony, enterprises should look for tangible benefits beyond simple cost savings by understanding the needs of the business units,” said Snyder.
A study by Sage Research found that across the business IP convergence has resulted in 45% improvement in productivity, which translates to an average of 35 days per year, per worker. Business objectives are achieved not just by controlling costs, but by increasing productivity through providing employees with access to tools, such as video conferencing, unified messaging and web-based personal assistants.
Enterprises that are deploying IP telephony in greenfield sites are realising savings of about £70 per seat because they can network a PC and an IP phone on the same Ethernet port. In its own IP telephony development, Cisco Systems saved just under £350 per employee on wiring costs in its London office, which seats about 1,200 employees.
Besides cost savings, centralised IP communications require fewer application servers, so you can maximise your space, reducing complexity and delivering feature-rich services to branches and smaller offices that would typically have used featureless key-systems.
Office moves and ad hoc additions, moves and changes account for as much as 14% of the annual IT budget. Each move is estimated to cost an organisation between £40 and £100 per person. Considering the average company moves its employees about once a year, the potential cost savings are significant for companies of all sizes.
Often businesses may need to upgrade their Lan or Wan infrastructure to support new applications, increase bandwidth or add resiliency. This is a definitive opportunity to invest in a voice-ready converged infrastructure and put the business on the road to IP convergence.
The revolution in working practices taking place across the business world is providing one of the most compelling reasons to adopt IP communications. Applications such as unified messaging and IP contact centres provide ideal support for mobile workforces.
Extension mobility, in particular, provides significant benefits to sales people, consultants and telecommuters who regularly spend time away from the office, but still need a desk when they return.
IP communications is not just about PBX replacement. IP telephones can now deliver a host of productivity-enhancing applications. Companies have used these devices to display corporate information, weather reports, interrogate flight schedules, deliver video surveillance, or replace expensive PC platforms altogether.
IP-based rich-media applications can also be used to enhance user collaboration. Audio, web and video conferencing capabilities, in conjunction with application sharing and text chat, can be provided as a corporate-wide easy-to-use, single application.
Businesses should also consider the customer service benefits that can be achieved by using an IP-based contact centre. Call-queuing times can be reduced by forming a virtual contact centre and agents empowered with tools to increase first-call resolution rates and create cross-selling and up-selling opportunities. Through virtualisation, agent utilisation rates can also be maximised and the whole contact centre can run more efficiently.
Businesses need to plan for the adoption of IP communications through careful analysis of their current communications environment. However, even if your systems are not reaching the end of their life, you should take the time to determine how the productivity benefits of IP can be applied to your business. Many of the seemingly large costs associated with migrating to a converged network (such as writing off of an undepreciated PBX, or Lan/Wan enhancement) can be quickly recovered by the cost savings and boost in productivity.
Ian Sherring is business development manager for IP communications at Cisco UK