Vocal encouragement

25 February 2006

The impetus driving the switch from traditional voice networks is obvious: VoIP offers dramatic cost saving potential over voice calls. But is it sufficiently robust, delivering a high enough quality of service, to be classed as an enterprise-ready technology?

Internet telephony is on the cusp of being a mainstream technology. The groundswell of interest is such that nearly half of all US branch exchange purchases in 2003 supported voice over Internet Protocol (VoIP) telephony, according to analyst house Gartner.

The impetus driving the switch from traditional voice networks is obvious: VoIP offers dramatic cost saving potential over voice calls. But is it sufficiently robust, delivering a high enough quality of service, to be classed as an enterprise-ready technology?

Lloyd's of London, the world's largest insurance broker market, has plenty of insight here. Back in 2001 it became a pioneer of VoIP technology, as it embarked on a groundbreaking implementation. The results have been impressive - Lloyd's calculates it saved £4 million in the years following the roll-out - but it has not been a completely pain-free implementation.

The seamless network

In today's streamlined, agile business environment, running different networks for IT and telephony can look like a cumbersome, expensive choice.

A single network, running voice over Internet Protocol (VoIP) has been heralded as the way forward. But a programme to converge networks should not be undertaken lightly.

Webster Springer, project programmes director at Alfred McAlpine Business Services (AMBS), was responsible for driving through his company's implementation of an integrated network. Springer says that convergence projects can be extremely painful.

Alfred McAlpine is a £850 million plus company, with a long history in the construction industry. But more recently it has moved into the management services sector, acquiring the Stiell Group in 2002 to flesh out its data and telecommunications expertise.

Today, around two-thirds of Alfred McAlpine's revenues come from its services division, and one quarter from AMBS, which manages its clients' work spaces and facilities.

The AMBS unit has helped deliver network and telephony services to over 200 companies, each with their own IT systems and networks, and each reliant on different levels of budget.

Attempting to introduce an integrated network covering voice, mobile and data traffic meant that it needed to audit not only its own technologies and business goals, but also the systems in place at its clients. This was an "horrendous" experience, says Springer, but it quickly showed its worth.

AMBS was able to quickly identify areas where it could make a rapid return through introducing its integrated network. The audit highlighted the number of expensive international calls and 0870 numbers being dialled, and where mobiles were being used to download data. This level of granularity allowed AMBS to redefine usage policies, ensuring the most cost effective use of technology. It cut 15.5% off its telephone bills within the first year.

The integrated network also allowed AMBS to reduce the inefficiencies of having multiple telephony suppliers.

For example, it worked with Vodafone, Cable and Wireless, Orange and BT, all of whom had their own billing platforms. AMBS replaced all of them with its own billing platform.

Of course, return on investment was needed to convince the board of the project's viability. And while Springer has been able to demonstrate the savings of the integrated network, there have been softer business benefits. Conducting the audit of its entire telephony system has allowed AMBS to identify areas ripe for the introduction of more efficient and less stressful mobile working .

"Treat VoIP with respect," says Chris Rawson, head of IT at Lloyd's. End users expect telephone systems to be permanently available, he adds; calls are not expected to be dropped.

That means either educating the users to re-evaluate their expectations or ensuring that heavy-duty technical expertise is on tap to deal with issues - and probably both.

Back in 2001, Lloyd's was nearing the end of a long-running BT phone contract. Other options - building an in-house PBX-based telephone service or continuing with BT's outsourced telephone service - were not as financially attractive. Also, one of its two London sites was being closed and those employees and brokers moved to the Richard Rogers building on Lime Street.

While this helped create a compelling business case for adopting VoIP, it also enforced extremely tight deadlines on the implementation, says Rawson.

With hindsight, the roll-out was probably undertaken too swiftly, but, he adds: "When you adopt a leading-edge technology, there will inevitably be teething troubles."

Alongside these technology issues, Rawson was faced with other challenges. Because Lloyd's is a market place for numerous different insurance brokers the roll-out was complicated by the fact that there were multiple groups of employees who had to be won over and trained. At the same time, Lloyd's was migrating from a Token Ring to an Ethernet-based network for its new building.

The total cost of moving 3,500 people over to a VoIP network was £1.4 million. Lloyd's opted for Cisco AVVID (Architecture for Voice, Video and Integrated Data) software, installed by systems integrator BT Syntegra.

It undertook an aggressive, staged implementation. Phase one - the Ethernet conversion - lasted from August to October 2001; phase two, the installation of the IP telephony core, lasted from September to December. The network was accepted in January 2002, although a further phase, where enhanced features - such as mobility and public address facility - were added in March 2002.

"We changed from having what was essentially a utility service - people always expect phones to work - to one that sometimes failed and sometimes needed to be apologised for," says Rawson. But despite some initial hiccups, the service has proven itself to be largely reliable.

To tackle any problems, Lloyd's created a hit squad to prowl the floor and deal with issues directly. Rawson talks of the need to manage customer expectations and prepare them for the fact that, initially, things will go wrong. "We did invite people to orientation sessions, but what proportion of 3,500 customers are going to come to a workshop for something they consider to be a utility?" he asks.

"We had a good commitment by a large number of people, but with hindsight not enough. [In future] I might be more insistent that all those affected were properly educated in advance."

Because of its early-adopter status, Lloyd's benefited from having its suppliers' 'A-team' on site. "The reassurance of having a top Cisco developer on site was tremendous - it was good the morning after a disaster!" says Rawson.

With industry demand for VoIP rising, it is more difficult to secure the services of the suppliers' experts in the intimate way that Lloyd's did during its roll-out. However, Rawson believes that the comparative disadvantage might be at least partially off-set by increased levels of customer VoIP expertise in the current business environment.

Alongside the savings made on voice calls, the migration has also helped Lloyd's drive out costs from other areas of its business.

As a result of the roll-out, it became less dependent on one telecom provider, and so could scour the market for cheaper deals - managing to secure a discount of between 40% and 50% on its PSTN rates. Anecdotal evidence of increased productivity has filtered through to Rawson, with the ability to access voicemails through PCs and hot-desking particularly popular.

Now that the network has proven to be reliable and stable, Lloyd's has the foundation for upgrades in the future. Rawson, meanwhile is unequivocal: "Lloyd's still believes today that VoIP was the right decision and that all the benefits have been delivered."

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