Riding the Wave of IP to Achieve Productivity
Many people would argue the debate about voice and data convergence is over. Frost & Sullivan projects that voice over IP (VoIP) traffic will account for around 75 per cent of the world’s voice traffic by 20071. More and more businesses have realised that by migrating to a single, converged IP (Internet Protocol) communications network supporting services such as IP telephony, video-conferencing, unified messaging rich-media collaboration and IP contact centre applications, they can achieve business benefits beyond the reduction in call costs that was typically the driver for VoIP. A converged IP network is a platform that delivers business agility, flexibility, enhances employee productivity, enhances customer care and can reduce ongoing operational costs. Moreover, an IP platform helps financial services companies to comply with new regulations, including Sarbanes Oxley and Basel II, to ensure information – be it voice, or data – is documented, stored and easily retrievable.
With analysis reporting that IP communications deliver a positive return on investment (ROI) 70 per cent of the time within 16-18 months, and the elimination of leased line charges, lower maintenance and management fees translating into 20 to 50 per cent savings2 the wave of adoption is rapidly building momentum across the globe. Lloyds TSB for example has recently announced the rollout of 70,000 IP phones; they are not alone in recognising the business value of IP communications. Since Abbey has started to employ multimedia voice over IP across its network infrastructure, it has seen a 20 per cent increase in the opening of new accounts for its business banking market alone, and the banking group believes the new infrastructure will deliver them tens of millions of pounds in cost savings. The analysts agree – according to Jeff Snyder at Gartner: “Organisations have stopped asking why they should implement IP telephony and are now focusing on when to implement.”3
If a full-scale adoption of IP communications is inevitable for business, how do you go about planning the right time to migrate your old communications infrastructure? For the last 20 years we have typically communicated using three separate networks, one for data, one for voice, and one for video communications. Businesses need to select an appropriate juncture in order to introduce an IP converged network and to move their communications services into the 21st century.
Typically a compelling event dictates the need to invest in new communications infrastructure and applications. This could be the opening of new branches, or the move of existing ones, the private branch exchange (PBX) coming off of lease or becoming end-of-life. This is an ideal opportunity to invest strategically in an IP communications solution rather than tactical investments that are not aligned to the overall business need. However, businesses should still investigate their current communications environment to see if they could benefit from IP communications. Many businesses still justify the investment in new technology through cost savings. By deploying a centralised IP communications solution, savings can be made in the eradication of inter-site call charges, video conferencing charges, reduction in maintenance charges and operational management overhead.
Again, in the words of Jeff Snyder at Gartner, “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.”4 Analysis undertaken by Sage Research has found that across the business, IP convergence has resulted in 45 per cent improvement in productivity, which translates to an average of 35 days per year, per worker5. Business objectives are not just achieved by controlling costs – but by increasing productivity by providing employees with access to tools, such as video conferencing, unified messaging, and web-based personal assistants.
Banks deciding to open a new branch or move an existing one are realising savings of approximately £70 per seat because they can now network a PC and an IP phone on the same ethernet port. Besides cost savings, centralised IP communications solutions require far fewer application servers, so you are really maximising on space, reducing complexity and delivering feature-rich services to branches and smaller offices that would typically have used a feature-less key-system. Abbey was able to migrate up to 25 branches per night onto its hosted IP Communications platform. Office moves, plus ad hoc adds, moves and changes account for as much as 14 per cent of the annual IT department’s budget. Each move is estimated to cost an organisation between £40 and £100. When you consider the average company moves its employees approximately once per 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 business applications, increasing bandwidth or adding resiliency. This is a definitive opportunity to invest in a “voice ready” converged infrastructure – and so put your business on the road to full IP convergence. Businesses can therefore plan for migration over a period of time and deploy a fully converged solution when it is right for their business.
Ultimately the revolution in working practices taking place across the business world is going to provide one of the most compelling reasons to adopt IP communications. Applications such as IP telephony, unified messaging and IP contact centres provide an ideal foundation to support today’s increasingly mobile workforce – allowing employees to be as productive while travelling or, working from home as when they are in the office. Extension mobility in particular provides significant benefits to sales people, consultants and telecommuters who spend much of their time away from the office, but still need a desk while in the office.
An IP communications solution is not just about PBX replacement. IP telephones can now deliver a whole host of productivity enhancing applications to users. Companies have used these devices to display corporate information, account information, corporate directories and deliver video surveillance. In some circumstances, the IP telephone can replace expensive PC platforms.
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 from utilising an IP based contact centre solution. Agents can be distributed throughout the organisation and form a “virtual contact centre”. Financial organisations can now locate their contact centre staff at branch locations or even consider offshore locations. This results in reduced call-queuing times, and by empowering agents with the tools and applications that they need, can increase the first-call resolution rates and create cross and up-sell opportunities. Through virtualisation, agent utilisation rates can also be maximised and the whole contact centre can run more efficiently.
Through careful analysis of their current communications environment, businesses need to plan for the adoption of IP communications. However, even if your systems are not reaching the end of their lives, organisations should take the time to determine how the productivity benefits of IP can be applied to their business. Depending on the results, many of the seemingly large costs associated with migrating to a converged network (e.g. writing off of an un-depreciated PBX, or LAN/WAN enhancement) can be quickly recovered by the cost savings and boost in productivity. Two things are certain over the coming years. One is that IP networks will converge all of the data required to run a business. The second is the sooner you implement IP in your business the more competitive advantage you will have both from a cost reduction point of view, but more importantly from increased productivity.
1 CommWeb Industry Statistics Center, 2004
2IP Communications Solutions – for Today’s Business Challenges, Cisco Systems White Paper 2004
3 Gartner, 2003 Press Releases: Analysts Examine the Road to IP Telephony During Gartner Symposium/Itxpo2003
4 Gartner, 2003 Press Releases: Analysts Examine the Road to IP Telephony During Gartner Symposium/Itxpo2003
5IP Communications Solutions – for Today’s Business Challenges, Cisco Systems White Paper 2004