Improved customer service - and not lower cost of telephony – is now the top driver for companies shifting to converged IP communications networks, according to a recent survey released by the Economist Intelligence Unit (EIU).
Seventy-three per cent of survey respondents cited better collaboration with customers, suppliers and partners as an important benefit from convergence. Reduced cost of voice calls ranked second, with 60 per cent citing this as a primary benefit, the report said.
"This result marks an important shift in the emphasis of network convergence projects from cost-cutting to value-creation," said the report titled, Competing through Convergence.
Convergence enables the delivery of voice, data and video over a single IP network. EIU surveyed 236 executives – including 77 CEOs – from Asia Pacific, North America, Europe, Latin America, the Middle East and Africa. Senior executives from 35 Canadian companies participated in the survey, commissioned by Bedminster, New Jersey-based AT&T Corp.
Forty-five per cent of global respondents said convergence is critical to achieving strategic IT and business objectives. Only four per cent view convergence as unimportant, the report said.
"Lowering capital and operational expenditures, while no doubt important, are secondary benefits of convergence," said Richard Blacklock, director of business strategy and development, AT&T.
Twenty per cent of respondents reported they have deployed converged IP platforms throughout most, if not all, of their organization. The survey also indicated IP deployment will increase to 60 per cent by 2008.
Canadian companies, however, are showing more enthusiasm, with 62 per cent saying they have plans to deploy IP networks throughout all or most of their organization, the report said.
Currently, only 20 per cent of Canadian respondents said they have implemented IP networks in their company. This is less than the global average of 25 per cent.
"Network convergence should be more focused with how enterprises can create the next generation of services that will enable their customers or partners to increase value. This is really about services transformation and the network is the means for achieving that goal," said Blacklock.
However, he said, to realize the full benefits of a global IP infrastructure enterprise systems and business processes should be upgraded or modified.
George Goodall, research analyst at London, Ont.-based Info-Tech Research, said companies have begun to realize the business value of converged network, taking advantage of its many functionalities.
However, companies have generally taken their IP implementation one step at a time, Goodall said. Over the last three years, the focus of companies was on replacing legacy networks and traditional circuit-switched systems to make way for a new IP network.
Only then would companies start exploring the various functionalities they could take advantage of to enhance business value, the analyst said.
Respondents were also surveyed on what they see as their biggest challenges when implementing convergence. Sixty-seven per cent said security is the "most critical attribute" of network performance to their business. Network availability followed closely behind, at 62 per cent, the report said.
"In a converged environment where you have modular services instead of silos, security has to become part of the DNA of the convergence process, not an afterthought that is bolted on," said Hossein Eslambolchi, CTO, AT&T.
Quality of voice services, the complexity of replacing legacy systems – such as business disruptions during the migration process – and the lack of in-house expertise on convergence technologies were also cited as the more significant barriers to implementing converged networks.