Voicing VoIP decisions

If you have ever wondered if there’s an off-the-shelf, one-size fits all IP telephony solution, the answer is an emphatic no. But that’s not necessarily bad.

There as many approaches to voice over IP (VoIP) as there are types of companies within the financial services sector. Take, for example, Manulife Financial and A.R.C. Group.

Manulife Financial last December gave Bell Canada a $140 million, seven-year outsourcing contract to bring IP telephony to the firm’s 9,000 employees in North America. Operating as Manulife Financial in Canada and most of Asia, and primarily as John Hancock in the United States, Manulife offers a range of financial protection products.

Based in Victoria, B.C., and formerly known as Accounts Recovery Corp., A.R.C. Group qualifies as a veteran VoIP user, having embraced the technology with a do-it-yourself enthusiasm nearly four years ago. Repeatedly cited as one of Canada’s fastest growing companies, the privately-owned accounts receivable management firm credits VoIP with enabling its growth to 350 employees, with branch offices in Vancouver, Winnipeg, Burlington, Ont., Montreal, Moncton and Seattle.

These two companies differ in their employee counts, telephony needs and budgets. One took a do-it-yourself approach to VoIP; One called on a service provider for help. One’s an IP telephony newbie; the other, a veteran. And whereas one entered uncharted tech territory, the other stepped four years later into a well-mapped world with an IP-savvy hired guide.

Remarkably, VoIP bridges these dichotomies, offering both firms trimmed costs and improved communication.

A.R.C. jumped in when savings from eliminating high long-distance tolls translated into a strong return on investment (ROI). Joe Polard, A.R.C. general manager, recalls that in 2001, IP telephony provided ROI within a year, primarily by halving the $45,000 per month cost of A.R.C.’s Centrex system. Even though long distance charges in general have since dropped, the long-term advantages of reduced administration costs for moves, adds and changes (MACs) and the easy-to-manage, feature-rich functionality keep A.R.C. committed to VoIP.

Cost saving benefits

Those advantages also drew Manulife to VoIP. John Mather, the firm’s CIO, anticipates lower operating costs, even though Manulife’s various North American offices still use traditional lines between locations. He anticipates that flexible and centralized management of phones and the data network will reduce operational and human resources expenses.

Further, the VoIP system’s features and additional phone functionality offer the potential of enhancing communication, particularly with inbound calls to the firm’s call centres. Mather says the company is also exploring the possibility of online Web chat customer service. He sees IP phone sets as having many of the same advanced features as cell phones, including the ability to view the last 10 numbers dialed and missed calls. Additionally he says there is the possibility of using camera functionality with videophones to make the customer service experience more personal.

At press time, four Manulife offices — Boston, Chicago, Calgary and Vancouver — were up and running with VoIP. Los Angeles and Toronto were well underway.

Manulife’s legacy digital PBX systems “have been either in or near obsolescence for the past 18 months,” says Mather. The company chose Bell to serve as project manager to migrate these to a common IT platform with most of the equipment from Cisco Systems Inc. “[Bell has] an experienced team and a close working relationship with Cisco,” he explains.

He adds that the bulk of the contract expense is getting the network up in the first year. The remaining six years are managing that network.

Bell began with an assessment of Manulife’s data network and then built a migration plan around that, reports Kelly McDougald, senior vice-president, enterprise sales, Bell. “The beauty of IP is that [its implementation] is not all at once and not all or nothing,” she says. “It can be very specific down to a user level requirement. It does require audits of your existing network and an understanding of…the existing network infrastructure in order to build the appropriate business plan and migration plan.”

Mather won’t reveal ROI timing but says it is “very aggressive” and easily met with the approval of the company’s executive committee.

The degree to which a company has to upgrade its data network to support VoIP makes a big difference in calculating the ROI.

“Savings are highly dependent upon the state and maturity of the network,” confirms McDougald. “You want the data infrastructure to be as secure as any historical voice infrastructure….The ROI model is very specific to where your starting point is.”

Manulife already had a large investment with core and edge switches for data, Mather reports. In contrast, A.R.C. in 2001 had to upgrade its network with Cat-5 cabling and 3Com Corp. switches automatically configured for voice priority. The company then purchased, through Calgary-based Glenbriar Technologies Inc., a 3Com NBX networked telephony solution with routers from SonicWALL Inc.

A.R.C. chose 3Com because the vendor’s IP system had a browser-based interface that facilitates feature access. “As do-it-yourself types, we saw that as a major benefit,” Polard explains. It was a choice that proved wise. “We found that we were using most of the features that were available to us basically because we have the ability to make the changes on the fly,” he continues. For instance, he can change his “hunt group” to direct calls to his phone as he travels from place to place. A hunt group defines a group of fixed or mobile telephones, within which, an incoming call is routed from one phone extension to another until the call is answered. It is a service that Polard says might take the administrators of the Centrex system an inconvenient three days to chang and they would, of course, charge to do so.

Slow, steady start

A.R.C. took a gradual approach to VoIP. IT staff augmented the existing Victoria head office phone system, providing employees with regular phones and IP phones. Once VoIP proved itself at that location, staff at the Burnaby, B.C., office were also given two phones until management gained confidence in the IP system.

There were some bumps in the transition. About a year into using it, the IP phone system would occasionally freeze. “3Com didn’t know what was wrong,” recalls Polard’s brother Jamie, A.R.C.’s IT manager. “It would freeze on and off during the day and we’d be down for about a half-hour while we rebooted.” Eventually A.R.C. solved the problem by re-inputting all the names in the phone system from scratch, but not before buying a back-up NBX system. “We haven’t had to use the back-up ever since, but the phones are such a vital part of our business that we have to have that redundancy,” he stresses.

“Redundancy is important to plan for because data lines aren’t as reliable as regular phone lines,” says Joe Polard, echoing a common concern that VoIP is only as robust as the underlying data network.

“Any Internet or data line connection can go down at any time,” Jamie Polard agrees. He aims to have two Internet providers for each branch to make the VoIP service that much more robust. “The cost of two Internet connections at most branches is still cheaper than getting the high-end…10Mbps fibre connection which we’ve got between our Burlington and Vancouver branches,” he explains.

But creating a double Internet connection became a problem when A.R.C. wanted to automate switching from a failed data connection to a live data line.

Downtime at the Montreal branch resulted from working with Glenbriar to automate that back-up transfer. A.R.C. restored th

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Jim Love, Chief Content Officer, IT World Canada

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