The IP Telephony Revolution While the late 1990s may be remembered as the dawn of Internet telephony, the early 2000s will undoubtedly be recorded as the period in which it became a force in the enterprise world. Whether being employed for ERP (Enterprise Resource Planning), CRM (Customer Relations Management), customer support, inventory management or SFA (Sales Force Automation), the convergence of voice, video, data and multimedia onto a single Internet Protocol (IP) network is revolutionizing communications. This new technology encompasses: Transport and infrastructure - one network that now carries all electronic traffic over the same physical cable backbone, both on campus and to and from the outside world. Telephony servers - computers (often Unix- or NT-based) that reside on the campus network and convert ("packetize") traditional calls to network protocols and then route them over public or private data networks. User interface and computer telephony integration - a single device, that is, the PC, handles all transmissions seamlessly and in an integrated fashion (voice calls, database access, video conferencing, Web access, e-mail, faxes, and so forth). Management - one set of tools that now handles all aspects of network operations, network management, and billing. As early as 1999 it was recognized that widespread acceptance of IP telephony technology had moved from an 'if' market opportunity to a 'when' market opportunity. Since then, its rapid adoption has been driven by the success of the Internet and IP and the debate has shifted from “will IP Telephony be accepted” to “which solution to implement.” The flexibility and cost-effectiveness of IP packet-based transmission has been key in the accelerating momentum toward widespread use of a single network for carrying data, voice and video. The business case for widespread IP Telephony application in the enterprise world is clear and growing stronger every day. Why move to IP Telephony? Often, the result of new technology implementation is difficult to clearly demonstrate and measure. In contrast, IP and Telephony systems have a direct impact on the company’s ability to reach its business goals. By linking them a company can forward those goals and have a positive impact of the bottom line. How well a company converges its communication networks will determine how far it can go in the new customer economy. A converged network opens the door to lower communication costs, simpler network management and most important, business-enhancing applications to better serve customers while creating more responsive and productive organizations. In the future, all communications networks will be converged networks. Through convergence, a company can reinvent both its communications networks and its entire enterprise. A converged network supports vital, business- building applications—from IP Telephony to collaborative videoconferencing to CRM—that make businesses more efficient, effective and responsive to their customers. These businesses find that the benefits of convergence go directly to the bottom line. IP Telephony positions a company to: Reduce Costs Enhance Productivity Gain Operational Advantage Reduce Costs In this soft economy, companies are increasingly concerned about managing costs, and current economic conditions are putting expenses into the spotlight. In a recent study, the META Group found that the primary reasons businesses invest in technology is the cost savings resulting from reduced equipment and infrastructure investments, increased productivity, and simplified network management. While cost projections will inevitably vary enormously from one company to another, most equipment vendors and IP telephony integration specialists would claim return on investment within one or two years. Cost savings can be separated into three basic categories: Reduction in Equipment and Maintenance Costs Reduction in Network Administration Costs Reduction in Network Carrier Costs Equipment and Maintenance Costs As voice and data networks continue evolving to meet the pressures placed upon them, they grow significantly more complex and expensive because organizations must scale up multiple networks instead of one. A converged network can reduce equipment and maintenance costs by: • Combining multiple network infrastructures into a single IP-based network. An organization will no longer need to invest in a dedicated device such as a PBX (Private Branch Exchange) or maintain a separate integrated services digital network (ISDN) for its videoconferencing needs. The City of Dallas was able to converge incompatible data networks—five in all—and one voice network into a single, converged network that will generate $21M in savings over a ten-year period. Another example is Cray Inc.—this company purchased a new converged data and voice network for its new facility in Minnesota for almost the same cost as a PBX alone would have incurred. • Allowing enterprises to centralize call processing. Centralized call processing with IP telephony gives enterprises with many independent sites the ability to centralize their voice and data networks on a headquarter or regional basis, thereby eliminating the need for smaller key systems and resulting in a reduced investment in equipment for individual branch offices. The City of Houston’s network once comprised 27 PBXs, 175 key systems, and 43 voice mail systems linking more than 23,000 city workers at 400 individual sites. Using centralized call processing, the City of Houston was able to replace its previous voice network with 16 call processing servers. • Reducing the number of wiring drops in a new facility by 33 to 50 percent per user. Many enterprises that are deploying IP telephony in ‘Greenfield’ situations are realizing savings of approximately $200-300 per seat because they can now run a PC and an IP phone on the same Ethernet port. In its own IP telephony deployment, Cisco Systems saved over $1.5M on wiring costs across six new facilities. • Lowering hardware connection costs. For instance, connecting an existing voice mail server to a PBX requires a channelized T1 line with 1.5 megabits of bandwidth that can support 24 users and costs approximately US $6,000. In a converged IP-based network running 100 megabit Ethernet with a unified messaging solution, a single server can support a similar number of sessions at a cost of only US $600. In other words, for one-tenth of the cost, an organization is able to increase its performance 100 times. • Reducing or eliminating PBX/ACD (Automatic Call Distribution) upgrade costs. For example, the City of Houston had a disparate network of standalone voice systems, many of them nearing obsolescence. For many of these systems, the City was unable to find new parts or was forced to pay exorbitant amounts. During its transition to IP telephony, the City of Houston is realizing savings of $765K a year on annual PBX upgrade costs. Network Administration Costs IP Communications can enable enterprises to reduce network administration costs by: • Improving the productivity of network support staff through simplified network management. Many customers are seeing improvements in productivity in the range of 10-40 percent. Cray Inc. was able to increase the productivity of its network support staff by 33 percent when they converged their network. • Allowing an organization to minimize its outsourced contract costs. The improved productivity of internal network support staff has allowed many organizations to reevaluate the need to outsource certain responsibilities, thus providing them with greater control over their network and oftentimes leading to a faster response time for their users. • Enabling network support staff to manage much larger user communities with the same number of personnel. After converging its network, The Ministry of Social Policy in New Zealand was able to support an additional 2,500 users with the same network support staff of 10 people. • Minimizing expenditures associated with moves, adds, and changes. Moves are estimated to cost an organization between US $75 and US $135. IP phones offering extension mobility allow organizations to significantly reduce this ongoing cost. For example, a typical enterprise with 5,000 employees that performs 2,000 moves per year at an average cost of $105 per move will save over $210K per year. Network Carrier Costs Network carrier costs include toll-bypass charges and also refer to the impact that a converged network can have on a reduction in voice circuits. A converged network can enable enterprises to reduce network carrier costs by: • Reducing PSTN tariffs via toll-bypass. This has become less relevant as domestic per-minute telephone rates have dropped as low as three to five cents, but continues to be a significant area of savings for international calls. • Reducing voice circuit costs. The ability to use the data network to transport voice traffic has allowed enterprises like the City of Houston to significantly reduce its annual voice circuit costs. By converging its network, the City of Houston was able to save $5M a year in voice circuit costs. Enhance Productivity The power of the networked world is in its ability to allow people to communicate more rapidly through multiple delivery mechanisms. Voice messaging, e-mail, and fax technologies have greatly enhanced organizational communications. However, these technologies have also created a staggering amount of inefficiency in the enterprise. Employees now spend an average of 2.5 hours per day retrieving and responding to e-mail, voice, and fax messages—not to mention the productivity losses resulting from downtime many mobile workers experience while away from the office. Identifying ways to make business-wide communications more efficient is crucial to a company’s success. An IP-based network enhances business communications by providing a flexible foundation upon which all types of new applications and services can be deployed, quickly and easily. These applications maximize productivity and improve communications by facilitating increased mobility, delivering advanced functionality, and streamlining administrative tasks. As a result, employees are able to communicate more effectively—with co-workers and customers alike— and can focus their efforts on activities that create new revenue streams or generate cost savings. Gain Operational Advantage Increased operational efficiency and productivity are also widely seen as byproducts of a converged business, by: • Simplifying administration & equipment maintenance. By simplifying the administration of the network, the IT staff can manage larger user communities and focus on strategic initiatives targeted at generating business benefits. • Consolidating IT staffs. By merging once disparate support and administrative staffs for voice and data networks and eliminating redundant efforts, companies can direct their assets toward strategic core business objectives. Specific customer deployments have shown a 10-40% improvement in network support staff productivity. • Streamlining employee and equipment moves. IP Telephony enables easy adds, moves and changes so that employees can be productive no matter where they are. • Increasing optimization of network capacity. Other factors aside, with one network instead of two, optimization efforts are more likely to be successful. • Preparing your network for a multi-service future. While the future is impossible to predict in detail, it is likely that a converged network will be the best preparation one can make for new services which have yet to be fully defined. Why Use NCR? Imagine this – You are finally going to do it - replace those incompatible data networks and the analog voice network with a single digital network for both voice and data. This new network must accommodate 119 new integrated applications across 88 corporate departments in 14 locations. This could be your worst nightmare or a dream come true. It depends on your IT partner. The NCR IT Infrastructure Services Team arrives, armed with expertise in IP technologies and a superb record of delivery. They immediately show an in-depth understanding of the issues. They design the new system. It moves you from a PBX voice system to an IP telephony system supporting voice, data and wireless connectivity. They even minimize costs by integrating existing equipment along with new hardware. A dedicated NCR project manager works closely with your team, integrating products and services from multiple vendors. Despite a tight deadline, the new network is integrated with existing systems and deployed on time. Your company sees immediate and significant cost reductions. Your staff gets connected anywhere within the office. Your solution allows for future scalability and improvement in the data and voice networks for all those branch office locations. The dream ends well. Access to Information Through NCR @ Your Service™ NCR @ Your Service is the online service portal through which you can access information about your network, anytime and anywhere. It offers performance metrics, ability to initiate and track service invoices and insight into real-time incident status. NCR Partners with the World’s Finest Solution Providers, such as Cisco NCR has met the rigorous requirements to become Cisco IP Telephony specialized, meaning that Cisco is confident of our services and our employees and engages us to provide services to their customers. In fact, NCR is currently providing services for the largest Cisco IP Telephony implementation to date. NCR was the partner Cisco engaged to develop methodologies for Call Manager Deployment. NCR has over $1M invested in multi-service labs for customer demos and proof of concept. NCR has over $750K invested in developing our proprietary implementation methodology. NCR is currently supporting over $2 billion in Cisco products. For over 10 years, NCR has taken a leading role as a Global Service Partner and Integrator in helping Cisco provide new world IP solutions. NCR has invested significantly in our employees around the globe to make sure that we meet the high standards/specialization requirements set by Cisco for their IP Telephony program: Metro Optical transport ATP IP Telephony Revised Specialization Wireless Specialization VPN Security Specialization NCR is a Cisco Gold Certified Partner worldwide: USA Japan United Kingdom France Germany Middle east China/Hong Kong Singapore Australia NCR is ready to help your enterprise take an evolutionary step ahead— maximizing your network investment with a minimum of service disruption. Our products work well in an open network environment and our data services group can size up your network and quickly prepare it for next generation applications. And since is a global company with 25,000 employees, we can service and support your MSNI (Multi-Service Networking Infrastructure) solution wherever you do business. Why Now? This is a fragile economy. How well you converge your network may determine how far you go in business. Why? A converged network opens the door to many advantages – lower communication costs, simpler network management and applications to better serve customers. In short, you get a more responsive and productive organization. In the future, all communications networks will be converged IP and Telephony. The question isn’t ‘IF” but “WHEN”. So, what’s holding you back? There’s really no question but that: You want productivity now Having to use outdated technology and equipment can cripple the most talented and dedicated workforce. And today’s workers are becoming more and more mobile. IP Telephony enables employees to match their productivity to their mobility, to be equally productive anywhere they are – in the office, at home, on a customer site, or hotelled in a branch office. Solutions like IP telephony, unified messaging and IP contact centers have been designed to provide an ideal foundation to support today’s increasingly mobile workforce. This is especially important for salespeople, consultants, telecommuters, and computer technicians who spend much of their time away from their office, but still need access to the same network capabilities regardless of where they are. IP telephony in particular provides significant benefits in the areas of telecommuting and hoteling. In a traditional voice environment it has been cost prohibitive to provide voice network capabilities to the telecommuter. Several different alternatives are available, but all are difficult to execute and can cost upwards of $1,500 per remote worker. With IP telephony and IP contact center solutions—using a VPN solution owned by the enterprise or managed by a service provider—a company is able to securely extend the voice capabilities of its network to the remote worker. In this deployment scenario, the remote worker with high-speed access can use their existing hard phone both in and out of the office or use a soft phone application that runs on their PC. Both scenarios allow employees to have full access to all network capabilities and to be free from the constraints of the home office, thereby increasing productivity while reducing calling charges, leased-line, and additional handset costs. The flexibility of allowing call agents to work from home improves an organization’s ability to attract and retain higher quality workers as well as cutting down on long-distance calling charges back to the home office. Most companies have employees who are constantly on the road and rarely use their offices. Unfortunately, other employees cannot effectively use these unoccupied office spaces, because their phone extensions do not travel with them. The practice of hot-desking or hoteling has been in existence for almost a decade and originally promised significant savings in real estate and facilities costs. However, many organizations found that the costs of adapting their current networks to accommodate mobile employees outweighed the benefits. A converged network can help a company optimize the use of its facilities—and reduce associated costs—by providing a more flexible foundation to serve the needs of its users. A converged network with IP phones enables employees to freely move about the office to available spaces, while allowing their phone extensions to travel with them—as well as any services or applications that they have loaded on their phone. This is allowing many companies assign more workers to shared workspaces, thereby reducing the costs associated with office equipment and real estate. You want cost saving now IP telephony has been a reality since 1998 but the dramatic cost savings, increased revenues and application rollout capabilities associated with the technology are only now being fully realized. Delayed deployment of converged solutions only delays the implementation of the power the new technology provides and the cost savings that come with it. Even if new technology is not sought for its benefits, the cost savings can be tremendous. One business reported, “We also discovered that we could install a converged network for the same price as a traditional PBX network by itself.” It should also be recognized that maximizing technology investments and minimizing mistakes and headaches always involves timing. An evaluation of the position of IP Telephony in its life cycle gives an additional reason to consider its integration into your organization now. Technology begins in a research and development phase, moves to a specialty system phase, then a commodity phase and finally an obsolete phase. During the specialty system phase, the cost of the technology is relatively high, but the value to the buyer is also seen as high. In the commodity phase, costs have fallen but the value remains high. A strong case could be made that IP Telephony is now moving from the specialty system phase into the commodity phase. Technology acquisition at this point in the life cycle will provide the maximum value for the longest period of time - the most bang for the buck. Isn’t that what you are looking for in your business? Customers Want Service Now Delivering customers what they want goes right to the bottom line of any business. One example is a retailer’s need to process credit card transactions more quickly. Authorizing a credit card transaction over PSTN used to take around 24 seconds—a nuisance to customers purchasing small-ticket items such as T-shirts. Queues could grow very long very quickly. Now that Sports Soccer can send credit card information via Frame Relay with a 32-kbps CIR, approval time has plummeted to 8 seconds. “A permanent, low-bandwidth network was the perfect solution for time-critical, very small transactions,” reported Sports Soccer. Lower network costs, improved productivity, increased customer retention, faster time to market—these are the bottom-line benefits that converged network solutions make possible. Whether it is creating a multimedia customer contact center, or laying the foundation for the future with a converged, multiservice networking infrastructure, we have the applications and solutions that let businesses take advantage of convergence. Now is the time to start.
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