Telecommunications

October 27, 2006
The value of IP networks greater than simply saving

Mike Lenette

NEW DELHI -- We all know the seductive rationale for implementing IP telephony: pure and simple cost savings. Of course the sales and marketing folk have nigh on exhausted their thesauruses coming up with fancy words for it, but at the root of it all is the idea that IP telephony will save you money. We’ve also come to realise that it’s not quite as simple as that and, while it’s tempting to get carried away, you have to capture all costs in order to compare like with like. So weighed against any potential savings from call minutes, organisations need to balance the cost of replacing PBX equipment and handsets, and consider how they are going to manage quality of service issues to allow reasonable quality voice calls.

But the true value of IP lies beyond simply saving money on call costs, because what is really interesting about it from a business point of view is that it enables a raft of new applications. In this sense, moving from traditional telephony to IP is like the move from the mainframe to the PC, with the resulting innovation in communications. Realising the potential of an IP infrastructure within an organisation involves a change of emphasis, however, from a technical focus to a service-based focus. The change in emphasis will result in the organisation’s IT and telecoms systems being transformed from undifferentiated utility services to vital enabling services that are far more tailored to the way the company or individual wants to do business.

So one big area of gain is that IP telephony supports the move towards greater mobility. Although we now laugh at the huge brick phones that everyone used to carry around a few years ago, the laugh is really on us, because we are probably carrying around a brick and a half in the form of multiple mobiles, PDAs and laptops. Add to this our PCs and desktop phones and it is apparent that device proliferation has resulted in great complexity in the interface layer, which in turn has to be supported. IP offers the opportunity to reduce the complexity of supporting all these interfaces, while enabling convergent devices and so-called ‘fusion’ services. Dual-mode handsets operate as a standard mobile phone when you are out and about, but automatically log onto the local network when you return to the office, with seamless roaming between networks.

Convergent services are currently high on the list of business priorities. For example, 34 percent of respondents to a Computing Technology Industry Association (CompTIA) poll said that implementing converged voice and data technologies such as VoIP, fixed-mobile convergence (FMC) and RIFD was their main technological priority. While research from Strategy Analytics reveals that 22 percent of mobile calls are made within the office, offering considerable scope to reduce the cost of making these calls whilst retaining the convenience of using a single handset.

An interesting example of the way that IP networks can enable businesses to do better business is shown by the case of a newspaper distributor. This company had real difficulties in recruiting and retaining staff to work in its call centres, which is unsurprising given that its ‘busy hour’ was between 5am and 7am. By moving to IP networks, it was able to support home-based working, which significantly reduced the inconvenience of working in the early mornings. Homeworkers didn’t face the problem of getting to and from work and could potentially just work during the ‘busy hour’ period. This opened up a whole new workforce who valued the ability to work from home for a short period each day, and therefore solved many of the company’s recruitment problems.

But it is not just businesses that are benefiting from new IP-based applications. In the healthcare sector, for example, a combination of voice-over-IP, Wi-Fi and an innovative device in the form of a badge has resulted in a revolution in hospital communications. Staff wear the badge on their lapel or around their neck on a lanyard. Pressing a button on the badge turns it into an IP telephone which has integral voice recognition capabilities. By saying “porters” into the device, the badge automatically connects the wearer to the porters. The device also combines PBX-type facilities. So by saying “dial” plus a telephone number, the device can connect the wearer to external phone numbers. You can also use the device to access your voice mail, calendar or emails. So not only is the device convenient because you no longer have to search for a phone – generating time and efficiency benefits – but it also improves hospital hygiene because it is personal and therefore lowers the risk of cross-contamination.

However, no amount of service innovation will drive uptake of IP telephony if the quality of service it provides is inadequate. So while we are willing to put up with some dropped calls on mobile networks when moving, we would quickly become dissatisfied if calls were being dropped while we were stationery at our desk. A network that drops mission-critical business calls is going to be highly unpopular, as will its sponsors.

But IP telephony has come a long way in this area, providing voice quality that is indistinguishable from standard telephone calls and supported by quality of service standards that enhance reliability. IEEE 802.11e, for example, enhances the IEEE 802.11 media access control (MAC) layer, defining a set of quality of service enhancements for LAN applications, in particular the 802.11 Wi-Fi standard. This is important for time-critical applications such as voice-over-wireless-IP and streaming multimedia. The protocol defines classes of service, which enables voice to be given a higher priority than, for example, non-time-critical communications such as email. And, in practice, enterprises often choose to deploy a series of virtual LANs (VLANs) to carry different services, so that dedicated bandwidth can be assigned to applications such as voice, further ensuring its reliability.

As usual the proof is in the pudding. Significant numbers of organisations for which communications underpins their entire business now feel confident enough to deploy IP telephony and are benefiting from both reduced costs and innovative services, while still enjoying the quality and reliability they have come to expect.