Montreal money managers double their VoIP investment

What do you do when your robust video-over-IP network infrastructure isn’t getting enough of a workout carrying just video? You add a second service — the “voice” in “VoIP,” just as one money-minding Montreal company did.

Norshield Financial Group already had video set up for internal conferences and meetings for employees in its Montreal, Toronto, Barbados- and U.S.-based offices. But according to CEO Dale Smith, the network wasn’t living up to its full potential.

“There was a lot of dedicated availability that wasn’t being used,” he said. After all, “we’re not having video conferences for eight hours a day.”

Norshield decided to explore voice over IP as a way to eat up that unused bandwidth, and save money at the same time —the firm faced some hefty telecom bills thanks to its far-flung offices. “We were spending about $14,000 to $15,000 a month on long distance calls,” Smith said. “It was getting to be a significant number.”

Voice over IP puts voice traffic onto an enterprise’s data infrastructure, bypassing the public-switched telephone network (PSTN) and resulting in low long-distance charges. The technology also affords easy moves, adds and changes (MACs), so IT managers need not call the telecom service provider whenever an employee moves from one seat to another, for instance. MACs in the traditional, non-IP phone world can cost hundreds of dollars.

Norshield chose BCS Global Networks Inc.’s IPC Tone, a voice-over-IP system that passed the financial firm’s analysis.

According to Matthew Smith, Norshield’s IT manager (and son of CEO Dale Smith), the company had planned to give the new Chicago office an upgraded phone system. But service providers in that city didn’t offer what Norshield wanted.

“We had providers in Chicago willing to offer point-to-point connections between us and their PoPs (points of presence) with voice over IP, and some of the advantages of unified messaging. But there were big disadvantages as well. For example, we couldn’t choose our carrier, and because they were only going to provide the solution to one location, they didn’t offer us any significant toll-savings opportunities….They were basically trying to get us to buy into a monopoly for our toll.”

BCS, on the other hand, had partnerships with multiple long-distance carriers, so Norshield could pick and choose its service provider.

The IT manager said BCS also offered to engineer the network to satisfy particular needs of each Norshield location. Chicago is the firm’s business hub and employees there make many long-distance calls to colleagues in other cities. That office’s VoIP connection is set up for low long-distance toll charges, he said, explaining that Chicago uses a high-speed, low-priced data link for connectivity.

Toronto, by contrast, is Norshield’s Canadian sales hub. Employees in this location make mostly local calls to nearby customers. Whereas Chicago is set up for cheap long-distance, the Toronto bureau has advanced calling features, so workers can create ad-hoc phone conferences, for instance.

“We were able to cost-justify the system just based on the phone savings we were going to see,” CEO Dale Smith said. “But there were other things, in terms of speed and scalability, that certainly made it a fairly easy decision to go ahead. [That is,] going onto a unified voice solution between our offices, and four digit dialing.”

BCS also provides Norshield with video capabilities. Both VoIPs are “hosted” — the routers and computers that support the systems reside with BCS, not with Norshield. IPC Tone customers only have IP phones and a Web-based portal for call management to worry about, said Dan Tanel, BCS’ CTO in Richmond Hill, Ont.

Smith, Norshield’s CEO, said the hosted solution made sense for his firm. “The analysis indicated that with the pricing we were able to get at BCS, we were better off to go with their method than do it ourselves. The numbers might not work the same for everyone, but they certainly worked for us.”

According to Jon Arnold, VoIP program leader and industry analyst at Frost & Sullivan in Toronto, hosted IP phone systems like the one BCS offers could cause some companies to reconsider their communications methods. He said large firms that shunned earlier hosted voice services like Centrex might decide in favour of hosted VoIP, because this newer service presents features that simply weren’t available on Centrex, such as do-it-yourself MACs.

For the most part, however, large companies will probably stick with their premises-based phone equipment. “It sounds simplistic, but they like to own their own stuff and they probably have the IT infrastructure to maintain it,” Arnold said, adding that hosted IP phone services might grow popular among the small- and medium-sized businesses before it catches fire with Canada’s largest enterprises.

Norshield’s next step is to roll out IPC Tone to the Barbados location.

“[BCS is] looking to make agreements with providers…and begin tests down there, where our long-distance is over $1,000 per person, per month,” Matthew Smith said. Even with a small team of eight to 10 employees in that country, the long-distance costs are sizable.

By way of advice, Tanel from BCS said it’s crucial to consider the underlying infrastructure in any VoIP implementation. Is your data network robust enough to carry video and/or voice, while maintaining speed and availability for e-mail, Web and intranet connectivity? This is a measure of quality-of-service (QoS), he said, adding that it’s something companies should keep in mind with IP-based phone systems.

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