VOIP: The Future of the Converged Network

In the beginning, the idea behind using the Internet to
make telephone calls was thrift, pure, and simple. Long-distance charges could
become a vestige of the last century. But with the competition in the telecom
industry exploding-thanks to the widespread deployment of global
networks-that advantage became less important, especially for corporations.

Still, companies discovered inherent value in VoIP
technology or IP telephony-the simplicity of managing a single network
handling voice and data, rather than two; the ability to set up call-forwarding
and audio conferences far more easily; the efficiency of getting e-mail,
voice-mail, and faxes in the same inbox (aka unified messaging).

But as with most technologies, the drivers for deployment
evolved. Now we're seeing a cluster of intriguing services such as ease of
integration with back-office applications, improved productivity in call-center
applications, greater efficiency in disaster-recovery plans, and enhanced
analytics for tracking customer service.

It's important to note that deploying VoIP technology
isn't without its challenges, foremost of which is assessing initially whether
your network can adequately assimilate voice traffic alongside data. If you
don't address Quality of Service (QoS) issues by ensuring enough bandwidth,
you'll face reliability concerns. But having a converged network brings the
cost and complexity down to rational levels for deployment, workflow, and
call-management (e.g., re-routing calls between customer-service centers for
follow-the-sun service).

The Outlook for VoIP

Several high-profile companies are using integrated voice and data networks
to serve the dual purpose of serving customers and keeping costs down. These
include JetBlue Airways, which uses IP technology to support what it calls a
virtual call center, with reservations agents who work from home, rather than
from a centralized location. Progressive Insurance, which enables customers to
calculate rates online and still contact a customer-service representative about
those calculations before they're finished. And Bank of America, which in 2004
announced plans to buy 180,000 Cisco IP telephones and replace 362 PBXs across
5,800 branches with centralized IP PBXs.

The trend is heavily in VoIP's favor. In January 2005, a
poll was conducted by Infonetics Research, a telecommunications consulting and
analyst firm based in Campbell, Calif. The poll surveyed 240 North American
companies that have already some IP telephony deployed, and the results showed
that 30% of the respondents already used hybrid PBX systems (i.e, traditional
phone systems integrated with IP capabilities), and the percentage has been
estimated to further increase to 38% by 2007. Approximately 18% of the
respondents used an IP-only telephone system, with this percentage estimated to
increase to 30% by 2007.

Overseas, VoIP is taking hold as well for the same reason
that mobile phones are outstripping landlines-new technology leapfrogs old.
“VoIP deployment is moving a lot faster in Asia,” says Chris Miller,
consultant, Lucent Worldwide Services, Murray Hill, N.J. “Just as they have
lower labor costs, they also have lower infrastructure costs,” he adds. For
companies pursuing a follow-the-sun customer-service strategy, that can be a big
advantage.

But is it reduced cost or increased applications that is
driving adoption? In the Infonetics Research survey, 59% of the companies said
they were using VoIP to bypass long-distance tolls, while only 44% said they
were taking advantage of features that weren't available from their legacy
system. While the economics are compelling, there are capital-expense costs to
deploy IP telephony, including IP-based phones, software, and servers (though
the latter can be industry-standard computers, not proprietary devices). Bob
Rosenberg, president, Insight Research, a telecommunications research firm based
in Boonton, N.J., says  “It may
cost 30% more to replace a traditional phone system with an IP-based system,
simply because of capital-expense costs.”

For that reason, analysts don't expect an explosive surge
in VoIP deployments, even though, the overall voice market is growing and
traditional voice deployments are declining. According to Benchmark-IT, a
telecommunications research and consulting firm based in Suffolk, U.K., 19
multinational carriers offer VoIP services, with five, including AT&T,
Equant, Global Crossing, Infonet, and NTT, doing so on a multinational basis.
But the trend is such that companies are moving ahead with VoIP. Why? “Because
it's the future,” says Rosenberg. Relying on its convergence of voice and
data, it can deliver far more services than traditional phone systems, he says,
and that's what companies are investing in.

Promises and Pitfalls

One of the clearest advantages that VoIP offers is the ability to put a
software overlay on the phone system, enabling users and administrators to deal
with a clearer interface than the traditional 12-button keypad. As noted, an
audio teleconference with multiple people can be set up, but employees are more
likely to do it when they can point and click at participants, rather than
navigate the keypad.

The same administrative advantages apply to equipping
employees located across the street or in a Manila call center.

These are the 'moves, adds, and changes,'-the
constant updating of who's sitting where and at what extension. “We're
remodeling our city hall, so we've had to displace personnel,” says Bobby
Parrish, Sr. IT specialist, City of Jacksonville, N.C.
“The best part of VoIP is being able to pick up someone's phone,
cross the street, plug it in, and have it work just as if you never moved.”

Once you've consolidated your network, more opportunities
appear. For one thing, it's easier to integrate VoIP-based software
applications with back-office applications such as customer-relationship
management software and ERP software. “In the past, that integration was an
expensive cost barrier,” says Joe McFadden, VP, Corporate Marketing, Nuasis, a
telephony applications developer. “What would normally take six-to-eight weeks
of a consultant's time to develop a screen-pop, we can do in half a day.
It's the difference between trying to get your phone to work with Microsoft
Excel, as opposed to making Microsoft PowerPoint work with Excel,” he adds.

If your organization handles a multitude of branch offices,
you no longer have to put an expensive PBX in each location-you can rather
install servers commensurate with the number of users in that location. In turn,
managing those servers becomes less cumbersome. “Because it's all software,
you can network call centers together,” says McFadden. “It's a single
distributed architecture, just as you would have for any enterprise application,
so you can have a single system administrator managing the network from one
location, rather than having to deploy administrators in each location. They can
even log on from home to monitor the network.”

In these days of heightened awareness about natural
disasters, an IP-based network lets companies deal with disaster recovery more
quickly. “If your call center goes down, you can route the calls to another
area,” says Mike Leo, director, Product Marketing, 3Com, Marlborough, Mass.
“Why not take advantage of that flexibility?” he asks.

The same flexibility lets you route call overflow to branch
offices as well. “It's a way to flatten your organization, and to extend the
call center to places that you never utilized before,” says Bar Veinstein,
director, Product Marketing,  Nice
Systems, a call-center analytics software developer based in Rutherford, N.J.
“One of our customers is a car-rental chain, which can today push calls to the
front-line agents in different rental locations, because of VoIP.
It takes away the bottlenecks to the infrastructure.” Another advantage
is that staffing a second call center can be avoided by smoothening the peaks
and valleys of demand by routing calls to multiple locations. 

But there are pitfalls to be aware of as well. For
instance, notes Veinstein, in the car-rental scenario, there are training issues
to consider. “When you start pushing the calls to branch employees, which
traditionally went to call centers, how does that affect the customer
experience,” he adds. You may have to start thinking of evaluating the desk
agents for skills they hadn't had to have before.

Even more important is the question of QoS. That's the
biggest bugaboo in the migration to VoIP say sources. “The biggest failures
I've seen in VoIP were companies whose networks didn't have the capacity to
support both data and voice,” says Bill Spilman, director, Voice Professional
Services, 3Com's consulting division. Companies have to be cognizant of the
fact that on an IP network, voice constitutes network traffic-and network
traffic that's more time-sensitive than data.

“If a data packet is a few milliseconds late, you can
live with that,” adds Spilman. “But in a voice conversation, if half of the
word drops out, the conversation is useless. It's crucial that voice
communication works in realtime.” The result is that a network assessment
prior to VoIP deployment has to be conducted to ensure that the company has the
bandwidth to support its convergence plans.

The Potential Payoff

Pitfalls and promises aside, even in these early stages of VoIP deployment,
it's clear that a converged network can provide the foundation for a new
category of applications. “There is no killer application,” says Hank
Lambert, director, Business Development, Cisco Systems' Voice Technology
group. “But there is a collection of lethal ones,” he adds. “These have
the potential to make call centers and global companies function potentially far
more quickly and efficiently. There are a couple of factors driving this.”

First, there's a communication standard that almost all
VoIP applications adhere to, called Session Initiation Protocol (SIP), a
signaling protocol governed by the Internet Engineering Task Force for Internet
conferencing, telephony, presence, events notification, and instant messaging.
While some sources complain that SIP-based applications are not automatically
interoperable, integrating them is simpler than integrating earlier computer and
telephony systems.

Second, once you integrate your communications, enabling
employees to establish a electronic inbox that abrogates the need to check voice
mail, e-mail, and the fax machine, there's a big leap in efficiency,
especially in situations where expensive items are being sold. According to
3Com's Spilman, Prudential Northwest Properties, Portland, Ore., uses VoIP so
that real-estate prospects, having found a house they're interested in on the
firm's website, can type a query as a text message, and have it translated
into a speech message, and delivered immediately to an agent's phone or
electronic inbox. “They've analyzed what this does for them,” says Spilman,
“and they attribute an increase of $1.3 mn per year in both revenue generated
and increased productivity through this capability.”

Also think about the concept of escalating tech-support
calls in a high-ticket environment. One of the key facets of VoIP-based phone
systems is find-me, follow-me, where users can easily turn-on and turn-off
call-forwarding from any computer (as opposed to solely doing it from their own
phone); combine that with call escalation and you can improve customer service,
notes Insight Research's Rosenberg. “Say you sell vacuum technology to
freeze-dry food. You don't get millions of calls, but each one may represent a
$20,000 sale. In this new environment, through a routing table, customers could
still reach a highly skilled engineer to answer their questions, even if the
engineer is at home. Dinner may get interrupted, but it's worth it for a good
customer.”

Ultimately, we're looking at the dawn of applications
that will ultimately enable a highly intelligent call center. “Call centers
will have to evolve because as people do more transactions online-whether
they're e-Commerce transactions or information transactions-the requirement
for customer service actually increases,” predicts Rosenberg.

Howard Baldwin

vadmail@cybermedia.co.in

Republished with permission from Global Services (www.globalservicesmedia.com)