February 18, 2003

There are a variety of technical reasons for migrating to a converged voice, video and data network-more efficient use of wide-area and LAN network facilities, streamlined management and administration, more rational network architectures, and better deployment of IT personnel. As important as those reasons are, the most compelling long-term payoff from convergence is greater productivity and profitability. Integrated IP voice and data networks provide a whole new world of applications that companies are just now discovering.
News@Cisco recently spoke with Don Proctor, vice president and general manager of Cisco Systems' voice technology group, and asked him about the compelling reasons for organizations to migrate to IP voice systems.

Why should companies want to switch to an IP Communications infrastructure for their voice communications?

Don Proctor: The simple answer is that IP technology is more flexible, costs less to manage, provides lower phone bills, and offers far more capability to improve productivity.
Most importantly, IP Communications isn't some blue-sky promise of great rewards somewhere in the distant future. Again and again, the customers who have migrated to IP Communications systems have reported immediate and substantial returns on their investments. According to a recent study by Sage Research, roughly 80 percent of all companies reap the majority of IP Communications benefits within six months of deployment.

How can IP Communications improve productivity?

Don Proctor: Companies are just now tapping the potential of IP Communications to improve productivity. But already, that potential is proving impressive. Productivity improvements can be as basic as reducing the time it takes employees to communicate or as advanced as helping companies deploy advanced multimedia applications for improved collaboration or workgroup interactions. According to Sage Research, half of the companies surveyed said they saved almost four hours a week per employee from a reduction in "telephone tag." The survey also noted that nearly 50 percent of those companies with IP Communications infrastructures gain four to five hours a week through improved productivity for remote office workers and telecommuters. On the more advanced end of the scale, customers utilizing IP Contact Center can combine inbound and outbound voice, Web, and email to allow agents to use the media which is most productive at any one given time.
Cisco believes that the "killer app" for IP telephony is not one single application, but the ability to provide a multitude of personalized applications over a phone system, which previously could do little more than ring. Thanks to IP Telephony and its capacity to seamlessly integrate with data, companies can now use their phone systems to provide a wide-range of companion applications on their voice system. Those include unified messaging, contact centers, personal calendars, meeting schedulers, service alerts, and information databases, among many, many others. Thanks to the improved functionality of the IP Communications system deployed by Sheraton Hotel in Petaluma, California, their customer service employees save 9.2 hours per month by having more information integrated into the IP communications system to assist customers with inquiries.

How can IP Communications lower a company's operating costs?

Don Proctor: Certainly, companies can reap substantial cost savings by running their voice communications over IP networks. Basically, voice traffic travels with data traffic and may or may not require any additional bandwidth. But all that voice traffic has been removed from local and long-distance call services. The long-distance phone costs for Arizona State Credit Union, for example, dropped 96 percent when it switched to Cisco's voice-over-IP technology. At the same time, the ability to leverage teller's spare time by dynamically acting as contact center agents increased their productivity dramatically.
More importantly, IP Communications offer increasing cost-savings over time by more efficiently utilizing existing assets, including a company's data network. By moving your existing legacy telephone system onto your existing data infrastructure, a company saves money by consolidating its communication networks. Businesses save money not only by reducing the equipment required to operate their communications, but also by reducing the cost of IT support staff required to maintain network systems. For example, H.J. Heinz estimates they are reducing their IT support costs by 90%.

What kinds of companies are taking advantage of IP Communications?

Don Proctor: Any company that has significant voice traffic can reap worthwhile cost and productivity gains from Cisco's IP Communications systems. But practically speaking, our products address companies with as few as 50 employees to large multi-national corporations. Cisco leads the industry with over 1.4 million IP phones deployed. And our list of customers includes a wide-range of organizations, from industry giants such as Heinz and Burger King, to mid-sized companies such Arizona State Savings, to hotels such as Sheraton Petaluma, to municipalities such as the City of Mississauga in Ontario. Additionally, Cisco has organized a network of experienced partners to assist organizations in IP Communications implementations.
Earlier this month, Cisco announced a complete IP Communications program for mid-market companies. The program includes enhanced products specifically designed for these smaller sized companies to deploy such services as IP private branch exchange (PBX) and unified messaging for voicemail, email, and fax management from a single device. Additionally, Cisco has organized a network of educated, experience partners to assist smaller companies in IP Communications implementations. These partners address the deployment challenges faced by mid-sized companies, which typically have small IT staff lacking capabilities to do a full IP Communications deployment on their own.
Last week we announced Cisco IP Contact Center 5.0 which enables the Customer Interaction Network. The Customer Interaction Network is about the new ways to manage customers, customer information and customer service resources, leveraging the mobility and flexibility of IP Communications, to create greater agent productivity and improved customer satisfaction - a true competitive advantage.

How is Cisco helping address the myriad of management challenges for converged networks such as integration, security and quality of service?

Don Proctor: This is an area where Cisco is able to leverage our experience in building and deploying large networks. First of all, Cisco is dedicated to building IP networks based on industry standards--whether for voice, data, or video. Secondly, Cisco provides an array of products to help integrate its native IP-based telephony and contact center systems with traditional or hybrid systems by Nortel, Avaya, Aspect, Octel, Mitel, Siemens and others.
Also, as the leading supplier of IP-based data networking equipment, Cisco leads the industry in security technology. Cisco's suite of security products protects networks whether they are carrying voice, video or data.
Finally, Cisco recently announced AutoQoS, a new feature of our Internetwork Operating System (IOS) for Cisco's routers, switches and other gear. Cisco AutoQoS automates network quality of service (QoS), including packet prioritization and delivery, a crucial requirement to IP-based voice communications. AutoQoS's initial release specifically targets the QoS requirements of voice-over-IP networks.