VideoLow cost and higher reliability are even prompting many companies to trust VoIP systems with their most trafficked—and most critical—function: their customer call centers. After Muzak connects all of its branch offices via VoIP later this year, the company expects to expand the service to its 13 regional call centers. Currently, each center supports a different Muzak product and has its own phone numbers. With VoIP, the company can centralize customer service at its headquarters, providing more-efficient service while cutting costs, Thompson says. "We would give our clients one 800 number and, through that one connection, reroute their calls to whomever can best serve them," he says.
Aviva Life Insurance Co., a subsidiary of global U.K.-based insurance giant Aviva LLC, switched to a VoIP system from 3Com last year. More than 300 employees at the company's Quincy, Massachusetts, headquarters and a branch in Buffalo use the system to support the company's 10,000 sales agents throughout North America. Each site can back up the other in an emergency or handle one another's overflow calls.
In March, Attachmate Corp. in Bellevue, Washington, an enterprise software developer, began pilot-testing a VoIP system from Nuasis Corp. for incoming customer calls. At first, the 12 testers occasionally complained about audio problems, such as echoes or low volume. When that happened, Attachmate simply reverted to its regular phone system. Having smoothed out those glitches, Attachmate expects to expand the VoIP system to 50 salespeople and service reps at its headquarters and in Shannon, Ireland, by year's end.
Aviva, which saved $300,000 in its first year with VoIP, expects the system to pay for itself within 30 months. Muzak is on track for an even quicker payback on its initial $300,000 investment: 23 months. Attachmate can't yet provide a payback date for its investment, but controller John Burdick expects to cut telecom-related capital costs by 20 percent and operating costs by 40 percent.
Like the Internet, VoIP has provided a relatively cheap way to link disparate locations. "We're a community bank that's growing into a national presence," says Jim Barry, CIO of OneUnited Bank, which bills itself as the nation's first interstate African-American-owned financial institution. Through a series of acquisitions, OneUnited has grown rapidly from two Boston offices to 10 locations in California, Massachusetts, and Florida. Each office came with a different phone system and, of course, phone number. The master phone list "became the most important document in the entire institution," Barry says wryly. "We realized that scenario wouldn't scale as we bought more banks."
In October 2002, OneUnited finished converting all branches to a VoIP system with a single user directory. Now employees nationwide can dial one another by name as well as by four-digit extension. They can also customize their service—for instance, forwarding calls to another bank location, or to a cell phone (where cell phone rates will apply). The system also centralized the company's switchboard, eliminating the need for separate receptionists in each branch. As a result, OneUnited is saving $10,000 every month on long-distance charges and has reassigned four full-time employees who previously handled incoming calls.
For all its benefits, VoIP has shortcomings. As Muzak's story illustrates, it currently works only if both parties have the same technology. A power outage or computer-system failure can knock out VoIP phones as well. For that reason, companies should choose products with battery backup or have redundant network connectivity.
In fact, VoIP systems currently log a bit more downtime than their traditional counterparts. That may not affect consumers all that much, but many businesses would consider Muzak's average of 95 to 97 percent uptime unacceptable, even though calls automatically switch to the regular phone network if the VoIP system is down. And nobody claims 100 percent toll-quality calls. Even enthusiasts like Barry say they get occasional cell-phone-like static or annoying echoes. There are also regulatory questions that need to be answered, with the Federal Trade Commission expected to decide whether or not to regulate IP telephony later this year.
Finally, not every business needs to make phone calls over the Internet. Companies with all employees in a single location won't benefit from the per-call savings, and those with state-of-the-art PBX systems may find the switch isn't worth the cost. But those who have already made the move tend to agree with analysts and vendors who insist that VoIP has finally matured into a viable business-telecom option.
A VoIP Directory
The blossoming VoIP industry includes dozens of upstarts whose names aren't yet household words, such as Shoreline Communications Inc., ITXC Corp., and Mitel Networks Corp. Increasingly, though, the playing field includes such telecom giants as 3Com, Nortel Networks, and Cisco Systems, which has already shipped more than 2 million VoIP phones. And many vendors are staking out specialty turf: Nuasis focuses on equipping customer call centers, while SpectraLink has integrated its NetLink wireless phones with a Nortel VoIP system, allowing users to make wireless calls over the Internet. Jon Arnold, VoIP program leader at Frost & Sullivan, says that companies can "IP-enable" conventional PBX systems as an interim step to full VoIP implementation. He believes most companies will wait until their current PBX systems reach the end of their life cycle (typically 8 to 10 years) before seriously considering VoIP.
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