The business value-add of IP

Today enterprises considering migrating from traditional PBXs to IP telephony systems are not making investment decisions based on technology platforms but rather on achieving critical business imperatives.

These include reducing the total cost of ownership, improving business communications and employee productivity and mobility. As such, organisations are investing in `business solutions`, ie platforms, devices and applications that will revolutionise the way they work and compete in the marketplace.

One of the first and steadily endorsed motivations for moving to IP is the requirement to reduce the total cost of ownership (TCO) to the organisation. The ability to put voice over the LAN and/or WAN yields a list of hard and soft cost benefits that can be realised by the organisation depending on the deployment scenario.

VOIP is appealing to single-site organisations for a number of reasons, including cabling capital cost avoidance, minimising the cost of telephone moves, adds and changes (MACs) as well as reduced network maintenance expense.

Cabling, for the most part, is a one-time cost saving realised only in the case of a greenfield (new build) deployment. As a general rule, the cost reduction by running a single Cat5 cable to the desk versus a Cat5 and a Cat3 is approximately 40% (35%-45%). It is estimated an organisation can realise annual savings of 75% - 100% per telephone MAC in an all-IP network while an organisation can decrease and/or eliminate the cost associated with maintaining standalone voice equipment.

Today`s organisations are evolving both in size and footprint due to a number of forces including mergers and acquisitions, globalisation and technology advancements. A key challenge for these organisations is the integration and management of their telecommunications infrastructure as they expand and evolve.

In addition to the benefits listed above, VOIP is enabling multi-site organisations to derive solid savings from voice circuit consolidation. An organisation can reduce the number of trunks to the Public Switched Telephone Network (PSTN) by moving some or the majority of its traffic over the data network. Savings are also derived from moving interoffice communications onto a toll bypass VOIP network.

Teleworking or remote site working is another area that organisations are looking at to reduce costs, improve employee productivity and mobility and improve business communications. While the environmental, operational and productivity benefits of teleworking have long been proven, technology previously put a ceiling on the extent to which the benefits could be realised.

Today, with the advent of affordable broadband technologies (ie xDSL and broadband wireless) and IP-based hardware/software systems that satisfy the ease of use, scalability, security and functionality requirements of the business market, remote site working is finally taking off. According to Gartner, the number of teleworkers worldwide in 2003 was expected to quadruple to 137 million (up from 36 million in 2000). We believe this is just the beginning of a new work reality.

In addition to driving down the total cost of ownership (TCO), IP is helping organisations improve business communications and customer service.

By leveraging an IP PBX, organisations are able to seamlessly and cost-effectively extend corporate phone features and IP-based applications to employees regardless of location, thereby encouraging better communication and collaboration. Furthermore, by linking work locations together, organisations are able to avoid or reduce the cost of equipping smaller sites with the same capabilities as the larger sites.

The number of mobile professionals is growing at a staggering rate thanks largely due to broadband and wireless networks, portable and powerful computing devices, and application development and integration. There is a tremendous incentive for organisations to invest in solutions that increase the productivity, efficiency and revenue targets for high-power mobile professionals.

International Data Corporation forecasts that the number of mobile professionals will grow from 16 million in 2001 to 21 million in 2006, driving the most technology investment of any mobile segment. While traditional PBX systems limited the degree to which work could be mobilised, IP systems are responding to the pent-up demand for increased flexibility. IP platforms can be used to extend applications irrespective of network or device type to users at their place of work (fixed or mobile). Organisations that run large contact centres, for example, are realising tremendous savings and improved operations by allowing contact centre agents to work out of their homes or a designated remote location.

Research has shown that call centre managers employing a remote workforce have noted a 12% increase in productivity. This, in addition to improved staffing, retention and job satisfaction, real estate savings and in some cases, savings on agent salaries, is making teleworking a very attractive option for contact centre managers.