Adoption of VoIP Tied to Relief from Phone Expenses

Published: June 18, 2007

by Dan Burger

Figuring out what to do with voice over Internet protocol (VoIP) is still in the noodling process. There are several milestone installations up and running and the spot light is on them to prove the worthiness of this technology. IBM executives, like System i general manager Mark Shearer, are very pro VoIP because it is an application-oriented technology that provides another workload for his application-oriented server line. However, for most people, thinking about voice communications in terms of applications and databases instead of wires leading to the phone company brings on brain cramps.

Terry Boulais has been on the front lines of an early VoIP installation at the Fashion Institute of Design & Merchandising (FIDM). Boulais is the director of business development at Key Information Systems, a reseller of System i products based in Woodland Hills, California, where it has an IBM Business Partner Innovation Center. A big part of his job is helping organizations build the foundation for VoIP. To a large degree, this focuses on network infrastructure. He assesses where a company is and where it needs to be--not only in terms of network infrastructure, but in business planning as well. I talked with Boulais last week to get some insight into the decision-making process involving VoIP and to find out what issues are providing the biggest obstacles to its adoption.

Dan Burger:   First of all, what drives executives to replace their perfectly fine, essentially trouble-free PBX telephone systems with VoIP, which is still relatively untested at the enterprise level?

Terry Boulais:   Money. Most people want to get into VoIP to save money on maintenance costs right off the bat. Once they realize they can save money by switching the phones to VoIP, then they look at the sexy features--the capability to provide the video conferencing, the benefits that apply to customer service--and wrapping it into a disaster recovery strategy.

DB:   So the decision to move to VoIP is first and foremost a decision based on saving money. Paying the phone bill must be an expense that gets some attention. Does that mean return on investment looks promising for VoIP?

TB:   Using our customer that is up and running as an example, I believe that company has saved almost a half million dollars. In that case, the infrastructure was already there. An investment was made in new switches and new phones, a new iSeries was purchased, and there were costs involved with writing the interfaces to the applications and training. This system was deployed at six locations in December 2006, and the return on investment will be made in less than one year.

You can whittle the numbers down and figure out when the ROI will come, but the true value comes when customer satisfaction goes up because you are taking advantage of your technology. That's where the true benefit comes from. (A case study has been written about the FIDM deployment Boulais is referring to and can be found at this link.)

I talked with an executive from a company a week ago who did not want the application interfaces or anything beyond the pure phone system with voice mail. His infrastructure was there, but he would need new switches and would have to carve a partition on his iSeries box and buy 150 new phones. This is a scenario where the investment could be reclaimed in three months.

DB:   But at the same time an organization is thinking about the savings that VoIP provides, you are suggesting there needs to be a disaster recovery plan taken into consideration?

TB:   I think that's a good idea. Customers will say, "I need my phones to work." And if the phones are down for three hours or more is that acceptable? Most people would say, "No."

If the corporate phones go out, a person can still use cell phones. But for the basic user who calls in to the front desk and wants to know about product, it's a big deal if he gets a busy signal or a dead phone. The company needs to determine what amount of downtime is acceptable.

When I look at voice over IP, I treat it as an application and as a disaster recovery plan. You could have fault tolerance or high availability or disaster recovery.

If the VoIP strategy takes into account a power outage and the calls keep going, most people are good with that. But if there is a disaster and the entire building structure is a giant pool of goo, and workers can't come back for a day or more, that's a big problem. This is the strategy for disaster recovery instead of fault tolerance, because some companies need to get back up in minutes, not hours or days.

People have to think of VoIP as not just a bunch of wires in the closet like PBX systems are thought of and as long as I keep it dry and keep power to it, I'm good. With voice over IP, it's now an application. And when it's an application, you have to treat it as one. You have to look for the single points of failure. You have to know how to do upgrades. You have to determine do I want fault tolerance for this application? High availability? Disaster recovery?

DB:   And what about rethinking of the communications system in terms of network infrastructure? You mentioned that in the case of FIDM, the existing network infrastructure was pretty much in place. What about companies where that's not the case?

TB:   The core to making this work properly is to make sure you have the right equipment for your network. If you have the old 10/100 megabit network stuff, it isn't going to work. You have to have some bandwidth between the locations. Bandwidth needs to be sized and the right size pipes--the right configuration--needs to be in place between locations.

If you want to do video conferencing, and your network is already 90 percent utilized, it isn't going to work. You will have to build your infrastructure so the network is at 50 percent or less capacity. We help companies examine this and come up with ways to segment out some of the traffic.

Part of the planning includes planning data network drops where phones are needed. For example, if there is a location where the old phone was but not a computer drop, an Ethernet line would need to be dropped into that location. There has to be data jacks because the VoIP system plugs into an application.

Remember, users of a voice over IP system might want to pull up information on their screens that includes pictures and live video--of real estate, for instance--that users are selling. The bandwidth is needed to get the information from the database server and put it on the screen in a timely manner. The network strategy includes the updating of old switches and routers and cables. Video conferencing eats up a lot of bandwidth. But with Gigabit Ethernet switches and proper drops, you have plenty of pipes to do it.

That's the sexy stuff. The real-world stuff is being able to quickly bring up data from the database and put it up on the screen. It also allows all the data to be transferred when calls are transferred to a different terminal, so data is not lost.

Let me give you an example: When you call a company and are asked to input your account number and then when you are transferred you are asked to input your account number again. In some cases this happens three or four times and the caller is irritated and wondering what kind of so-called service is being provided by this company. What has happened is that the call is being transferred, but the data is not transferred. That's one of the basic solutions that voice over IP provides.

Editor's note: In a future edition of The Four Hundred, we will take this VoIP discussion deeper into the aspects of redundancy, points of failure, bandwidth sizing, and the role of the telecom carriers. We hope you'll come back for more.

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