For a large organisation with a geographically distributed workforce there’s little doubt the business case around IP telephony is worth investigating.

Forget toll calls savings (although these certainly exist) – a telephony capable data network is the plumbing upon which new communications applications can be launched and productivity and efficiency gains enjoyed.

Think of the benefits of being able to see the communication status of everyone in the organisation at a glance and of automating many telephony functions that now occur manually.

With unified comms, from their PC screen staff can see who’s at their desk phone, who’s contactable on a mobile or home phone, or who has switched to voicemail and for how long.

Incoming calls journey through the IP telephony system which automatically looks for how and where individuals are logged onto the system, regardless of whether they’re in another city or up a mountain.

“Mobile to fixed convergence is happening. I have one of those Nokia phones with a SIP client on it, which means I can walk into a WiFi enabled office or area and the phone will automatically negotiate with our Cisco call manager software,” says Ross Goodfellow, solutions director network convergence, Fujitsu Australia and New Zealand.

The capacity of IP telephony to run voice, data and even video messaging across one data network – wired or wirelessly – and the flexibility of unified communications applications including niche products from the likes of Zeacom is well documented. Voicemail messages appear in email inboxes, call centre applications integrate with CRM and database applications to deliver one view of the customer, and video conferences can be launched at one mouse click, as can phone calls.

As for call security and voice quality concerns, yes, they exist. But careful selection of a reputable IP telephony specialist mitigates these risks considerably. Why then, do few small and medium sized businesses to date invest in IP telephony infrastructure and unified communications applications?

The answer is straightforward: all smaller businesses already have voice and many have either a legacy telephony system or access to telephony applications via a telco provider. Moving to an IP telephony platform able to support unified communications is not only relatively expensive done properly, but often non-critical.

Even when the life span of a legacy PABX system expires, smaller businesses tend to invest in IP-capable PABXs but delay network upgrades or the use of IP-specific telephony software.

“It’s hard to get organisations to transition to a new platform when they have a perfectly good piece of equipment and customers need help to know when to migrate and transition,” says Goodfellow.

Considering all this, smaller businesses that have already taken the plunge into a fully fledged IP telephony solutions are generating significant interest. How have they done it, and under whose advice? What has the outcome been – and is there anything they’d do differently?

Savings and gains
Internal network investments in IP telephony occur in small business when the competitive advantages or long term cost savings and productivity gains are particularly compelling.

The Auckland head office of Urgent Couriers supports around 20 staff and manages around two thousand incoming calls per day. Swyx IP telephony software runs on a Windows 2003 server platform, supporting the transmission of both data and voice calls across the internal data network.

Swyx is a “software-only” IP telephony solution – typically sold to businesses that don’t wish to replace existing routers and switches on the data network.

Quality of service differences between software- only IP telephony solutions and combination hardware and software solutions from the likes of Cisco and Nortel is hotly disputed, but Warren Brewerton, IT manager for Urgent Couriers, says the company is very satisfied with its Swyx solution to date.

“We got down to a list of four or five providers offering solutions from brands including Cisco, Avaya, and Alcatel,” says Brewerton.

“The Cisco system needed extra Cisco switches but we already had existing 3Com switches. As long as these met the basic voice IP protocols, they could be used with other IP software like Swyx and that was a better solution for us and certainly saved us money.”

Paddy Neill, a consultant for Avaya IP telephony installers Agile Technologies, says Avaya’s direction is also towards software.

“The key is to take a very co-operative and disciplined approach to design and implementation. People need to understand that voice is a real time application, not just another piece of data on the network,” says Neill.

Brewerton says Urgent Couriers can now install mobile gateways, making mobile phones an extension of the IP network, and can later expand to inter branch telephony and support for call centre agents who want to work from home.

“Because we are a point to point courier company, all we usually need to know is what company the caller is from and where their item is going – [we want] talk time kept to a minimum,” he says. “The next phase for us is to automatically populate the job booking screen meaning less time to process the call and less chance of making crucial mistakes with client identification.”

Urgent Couriers also benefits from digital call recording – all conversations are recorded so the company can later check what customers requested, and what address was given.

“This protects both us and our client. There is also a lot of call reporting benefits – for example, monitoring how long it takes for calls to be answered. And with the soft phones on the desktop, we can click on any phone number in any application and dial. This saves us time and eliminates dialling mistakes,” says Brewerton.

Least anyone should think moving voice to IP is a walk in the park, Brewerton says Urgent Couriers has experienced some teething issues, including inconsistent voice quality when USB headsets are used with PCs. However, he says software adjustments resolved these issues.

“We also notice sound pixilation sometimes when we call a business that is also using IP telephony but the benefits outweigh these slight issues. Staff using a home broadband connection also find calls work with no problems, and will even work over a local WiFi network connected to the main broadband landline,” he says.

Dave Mason, a consultant for Agile Technologies, says Agile uses a network assessment tool to simulate voice calls across the network to see if there is enough bandwidth for quality of service.

“The amounts of traffic over the network increases over time so you need to keep monitoring and look at things like are you going to bring video into the network later? Otherwise, it could go okay on day one, and then a month later calls start dropping out,” says Mason.

Typical to many smaller businesses, Brewerton says Urgent Courier’s initial goal is to simply maintain “status quo” and develop unified communications further once users are used to the system and comfortable with its stability.

“If we can trim a few seconds off each call through smart call routing and knowing who the client is, then we are increasing customer satisfaction and reducing resource use,” says Brewerton.

Crunching the numbers
In the future, an increasing number of small businesses will also use hosted IP telephony services from third parties like telcos and others. Cardinal Freight is one example, accessing a managed IP telephony service from new fibre network services provider Turnstone.

Tony Gorton, director for Cardinal Freight, says since realising the potential of hosted IP telephony services Cardinal has purchased a 40 per cent stake in Turnstone.

The 15 year old freight company specialises in third party logistics and supply chain management, has three national branches in Auckland, Wellington, and Christchurch, 100 employees, and processes up to 1000 freight orders per day.

Turnstone is meanwhile retailing IP network services and Cisco IP telephony applications over a super-fast fibre network infrastructure wholesaled from TelstraClear (and possibly Telecom and Vector in the future), and also over ADSL connections for businesses with branches or staff away from the main centres.

Like many small business managers, Gorton says his early knowledge of IP telephony and unified communications was limited.

“I read a little bit of information and a couple of people explained it to me, but the main reason we changed was price and because the way I was treated by Telecom made me feel as if I wasn’t a customer,” says Gorton.

Telco dissatisfaction aside, Gorton says since moving to IP telephony his telecommunications bill has dropped from between $17,000 and $20,000 per month to between $8000 and $10,000. Balancing that saving, Cardinal has purchased IP phones at a cost of around $60,000 which it will pay off at $1500 per month for three years.

“We now have centralised communications from the Auckland site; any of our clients can pick up the phone in Auckland and press a button to reach our staff in Christchurch. We have unified messaging, one inbox, operator visibility, and can get voice mail as email,” says Gorton.

The lure of impressive unified communications functionality like this, combined with the potential cost savings, is no doubt helping to convince a growing numbers of smaller businesses to make the switch to IP.

On the other hand the old adage “if it ain’t broke, don’t fix it” is a powerful mantra for many companies who will be content to hold on to their legacy phone systems for at least a few more years.

For more information, vendors, resources and case studies visit the Unified Comms. / VoIP Research Pavilion

October 2007

By Vikki Bland