Companies Consider IP’s Next Stage

Time to turn attention to complicating factors IP has arrived. That message seemed loud and clear at the recent VoiceCon Spring 2006 conference in Orlando, where plenty of the communications managers attending the event said their corporations are using IP phone systems. Some of them have been doing so for years, and these days they’re turning their attention away from early-stage questions such as, "If we’re going to install an IP-PBX, when should we do so, and how?" and towards more contemplative queries: "How did our communications technology mix come to look the way it does now?" "What could we have done differently had we the chance?" "What’s next?" The research bears out the conference-goers’ experiences. According to the communications industry watchers at Dell’Oro Group in Redwood City, California, IP-PBX line sales increased 42% in the fourth quarter of 2005, while TDM line shipments decreased 2%. Meanwhile researchers at Scottsdale, Arizona-based In-Stat say many companies have moved beyond the IP-PBX experimentation stage and are infusing their communications systems with this increasingly popular technology. Business Case, Schmusiness CaseOnce upon a time it seemed easy to justify switching from TDM to IP. IP is cheaper, said its advocates. The technology lets companies change from costly two-wire cable systems – one for voice and one for data – to one-wire systems carrying both kinds of network traffic. Moves, adds and changes will become a breeze. Management overhead costs will tumble. So we were told. But over the past few years equipment vendors have changed their tunes, perhaps because IT managers have sussed out IP’s dirty little secret: savings on lower cable costs and administration expenses are one thing. But LAN upgrades and major amendments to the management infrastructure make IP no less expensive than its predecessor, and perhaps more expensive. Now the likes of Avaya Inc., Cisco Systems Inc. and Nortel Networks say IP isn’t about cost savings, but productivity improvements. Forget the cable plant. Consider instead the advanced applications that IP supports: collaboration programs, presence capabilities, et cetera. Consider the positive effect these apps will have on end-user productivity levels. Judging from comments at VoiceCon, however, businesses are finding their own reasons to implement IP. For some, cost savings remain the prime impetus. Jamie Libow, telecommunications manager at St. Paul Travelers Inc., an insurance company, said he wasn’t so much seeking "VoIP" as "VoTC…Voice over Tin Can." St. Paul sought the least expensive way to match the basic telephony features of a PBX and data system, and that meant a one-wire environment. "One of the biggest cost savings for us was in wire," Libow said, adding that the savings were substantial enough to justify the cost of the IP equipment. In 2003 St. Paul walked away from its Centrex service and started up the IP-PBX instead. Allstate Insurance took a different route. The business started dabbling in IP in 2000 with little sense of just why it was doing so, other than this: "When consumers catch on to this technology, we’d better be there," said Catherine Brune, CIO. Despite this fuzzy beginning, Allstate’s IP gear proved its worth during Hurricane Katrina. When the devastating storm swept the Gulf Coast and took out many phone circuits, Allstate was able to shift to alternate carriers in a matter of hours thanks to the flexibility of IP, Brune said. And the mobility that IP affords helped Allstate get its mobile claims stations set up in the damaged zone quickly – faster than the US Federal Emergency Management Agency (FEMA), she said. "We have the technology that enables us to think differently." Paul Tseronis knows all about thin-king differently. Communications-technology director in the office of the CIO of the US Department of Education, he faces a new boss almost every year, and each new CIO is different. One might want to hear all about Tseronis’ plans for increased network connectivity and advanced applications. Another might want nothing more than to hear how Tseronis is saving the department’s money. Either way, he has an answer with IP. End users seem happier now that they have unified messaging, born of IP, and the Department of Education saved network administration costs thanks to the technology. But it’s a tap dance. "There is no guaranteed business case," Tseronis said, telling the VoiceCon audience they have to "keep selling" to impress bosses. What Could Possibly Go Wrong?The VoiceCon folks also laid bare the problems they had installing, managing and coming to terms with IP. Brune of Allstate said if she could change anything about her company’s adoption, she would focus more on strategy. While her group understood the technological advantages, it was difficult to explain just how those tactical benefits supported the corporation’s main reason for being. "I would have taken a lot more time creating the vision for the business," she said. St. Paul, meanwhile, has its hands full with vendor management. The insurance company uses Cisco for the office phone platform and Avaya for the call centre. "It’s a double-edge sword," Libow said. On one hand St. Paul gains insight into two systems at once – a valuable education. But the vendors often try to entice St. Paul to go whole-hog one way or another. Libow said it’s like having divorced parents trying to out-do each other. "It can get pretty uncomfortable," he said. An important consideration in any new technology installation is the user’s needs; it’s crucial to solicit the user base for input. Libow did that. His group canvassed the organization to make sure the new phone systems provided at least as many functions as the users expected. The result? Complaints. Despite his thoroughness, Libow still missed some features. "We didn’t understand our users’ needs," he said. "We thought we did." That St. Paul’s telecommunications manager scoured the company to avoid this situation in the first place suggests it’s no simple task, marrying user requirements and new technology. Perhaps this tells us complaints will happen, no matter what. Ford Motor Co.’s IP implementation was part of an overarching IT restructuring, an attempt to streamline costs and business processes in all aspects of the automaker’s technology department. But one aspect was troublesome. "911 deployment was definitely a lesson," said Jeff Lemmer, Ford’s manager of global telecommunications. The company had a hard time integrating the IP-PBX with in-house security systems and interfaces with external emergency service providers. This isn’t the first IP/ 911 problem we’ve heard about; businesses should step carefully with this to-do list item. Eileen Wainwright is a telecommunications director at media content provider Viacom International Inc., which counts the MTV, VH1 and Comedy Central TV networks among its properties. She said one of her firm’s biggest challenges is ensuring sufficient electricity makes its way from New York’s power distribution system into Viacom’s offices near Broadway and West 44th Street. "We’re really struggling with that," she said, and others said they are too. The problem seems to be particular to retrofits, where businesses install IP in existing buildings. It’s becoming common knowledge that IP needs more power than TDM did. Power management will become an even greater problem as the IP install base shifts from greenfield sites – where the technology first got its market foothold – to replacements. Human resources pose yet more trouble. Voice and data group convergence, which is supposed to support technology convergence, is not easy. Comments from VoiceCon suggest many businesses toil to combine the camps, and often lose staffers in the commingling. "I had a few folks retire," said one telecom director. There’s more than one way to bring voice and data under the same roof. Some companies heed the industry analysts and insist the erstwhile stand-alone operations must come together. But others aren’t so sure. "You don’t need voice groups and data groups to be merged," said Libow from St. Paul. "You just need a bridge between the two." What’s Next?Some companies have moved beyond the early stages and are now considering IP as their platform for advanced applications. JP Ayache, telecommunications manager at Wynn Las Vegas – a 2,700-room hotel – said his company worked with Avaya to program the guest-room IP phones for rich features like reservation checklists, and simplicity. One button called "dialing info" provides guests with step-by-step instructions for using the phone. "We wanted to make it easy," Ayache said. "If we have to put a little instruction booklet beside the phone, we’ve lost already." Vantis Credit Union of Winnipeg, a six-branch financial institution, is installing Nortel’s Expert Anywhere Contact Solution, a SIP-based voice-video system that lets Vantis members contact the institution’s financial gurus from kiosks. According to Michel Audette, Vantis’ CEO, the Nortel platform lets his company expand inexpensively. Vantis can erect kiosks instead of full-fledged branches, and still provide the face-to-face interactions that members expect from regular branches. "I believe we’re going to be leading-edge," he said, adding that the new system might put Vantis ahead of competitors in the minds of youngsters who are used to Web-based video conferencing for chats with friends. While IP has arrived, it’s hard to say just where the technology is headed. It has infiltrated many business phone systems, but plenty of companies are still trying to figure out if it’s right for them, and what they can do with it. VoiceCon conference co-chair Fred Knight described the current state of the industry as a "time warp" between full-on IP deployment and reticence. Granted, all companies will use IP phone systems at some point – TDM options are dwindling fast – but will the effects will have anything to do with human resources, power issues and business cases? We’ll let you know how things play out in future VoiceCon coverage.

Companies Consider IP’s Next Stage

News | 04/01/2006 5:00 am EST

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