Bank takes hybrid route on new telephony system

Brown Brothers Harriman & Co. said it has completed a three-year project to install IP telephony systems at several of its U.S. offices. But the New York-based banking and investment management firm isn’t moving away from circuit-switched call-routing technology altogether.

BBH is using four of Alcatel SA’s OmniPCX Enterprise IP-PBX voice switches at offices in Boston, New York and Jersey City, N.J. Paris-based Alcatel wasn’t well known in the U.S. when it was picked for the project in December 1999. But BBH officials preferred the OmniPCX technology because it was less expensive than rival products and could handle voice communications in either a circuit-switched or IP-based mode, said Paul Diamond, senior vice president of enterprise communications at BBH.

Telephone calls that can’t be transmitted via BBH’s IP network because of heavy data traffic are converted to circuit-switched routing by the Alcatel devices. “It’s a stable and sophisticated switch, and since we’re a financial institution, we need dial tone consistently,” Diamond said.

Brian Riggs, an analyst at Current Analysis Inc. in Sterling, Va., said many other companies are following the same partial migration route that BBH took instead of jumping completely into IP-only voice networking.

“The real world is saying we won’t be pure IP, and many companies find it more comfortable to be circuit-switched as well as IP-enabled,” added Elizabeth Herrell, an analyst at Forrester Research Inc. in Cambridge, Mass.

The telephony project cost BBH US$2.5 million and affects the voice systems used by nearly 3,000 brokers and other financial services personnel. BBH did a phased rollout and has already saved US$200,000 in annual costs by eliminating voice-only network pipes and using its IP network to run core voice applications, Diamond said.

Additional benefits include the ability to convert BBH’s Alcatel 4035 digital phones to IP phones by adding an inexpensive snap-on hub to the bottom of each device. That alone saved Diamond about US$300 per phone compared with what it would have cost him to buy new ones from another vendor.

Diamond said BBH is also using the hybrid network to run a new IP-based voice-mail application and several call centre applications and is integrating it with a voice recording system developed by the New York Stock Exchange to meet a federal requirement that verbal stock trades be recorded.

But Diamond is reluctant to roll out IP telephony capabilities to BBH offices worldwide because of a lack of open standards and the difficulty of getting products that the company has bought from different vendors to interoperate.

“I await with open arms the integration resolution,” Diamond said.