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Analyst: VoIP offers more than cost savings

A Yankee Group analyst who spoke at Networking Decisions said companies should think of VoIP technology as more than a way to save money.

CHICAGO -- When it comes to voice over Internet Protocol (VoIP), there's more than one reason to accept the charges, so to speak.

During a presentation Thursday at TechTarget's Networking Decisions conference, Zeus Kerravala, vice president of enterprise infrastructure at the Yankee Group, a research firm based in Boston, argued that cost savings should not be the only reason that companies consider VoIP.

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Granted, there are some cost savings to be gained from moving to VoIP, Kerravala said, including fewer toll calls and a possible reduction in a company's telecommunications staff. But Kerravala said that such cost savings would be minimal.

According to Kerravala, VoIP's biggest boon is increased functionality. There are thousands of possible applications for VoIP phones, and as companies open up their code to developers, more niche applications are likely to develop. With proper implementation and training, these systems can boost productivity for a broad range of companies.

The Yankee Group found that companies with VoIP systems are 25% to 35% more responsive to customers, and the productivity of their employees who spend a significant portion of the day on the phone rose by the same amount.

One benefit of converging voice and data is that is allows users to create a centralized place to store messages. Today people are contacted by phone, fax, e-mail, pager and cell phone, and checking all of these separate places for messages can be time consuming. With VoIP, all of these means of communication can be centralized using a single message box.

That's something that appeals to Carl Lucas, IS director for Union County, N.C. He said unified messaging would be a help to county employees and would likely boost productivity.

But for many, the potential for cost savings remains a key factor for any new technology purchase.

Leo Judge, MIS director at Indianapolis-based mortgage lender, The Money Station Inc., said that new applications and the possibility of unified messaging was not a factor in his consideration of VoIP.

Judge said his company, which has four remote locations, could benefit from avoiding toll calls, having easier remote system management and enabling employees who switch desks to simply pick up and move their own phones without help from the IT staff.

However, he said budgets are tight right now and that visible return on investment is the biggest priority. "The bottom line is that the technology has to save us money," Judge said.

Companies with that kind of bottom-line mentality may want to save money by migrating to full VoIP slowly, over time, Kerravala said. It rarely makes sense to rip out a functioning private branch exchange (PBX) in favor of a complete VoIP system, particularly for those companies that are hesitant about making the investment in the new systems and network upgrades that often accompany VoIP projects.

Lucas is considering IP-enabling some of his PBXs and continuing that process over the next year or two, as the need arises. With that approach, he said he can justify the smaller expenses along the way.

J. Todd Babcock, another IS director attending the conference, said he is not considering VoIP right now. Babcock, who works for Chicago's Museum of Science and Technology, said that the museum has only one location and it is in an old building. Any wiring changes in an older structure can be very expensive, he said.

Nonetheless, he said the museum is undergoing some strategic changes that could benefit from VoIP. Babcock said an effort is brewing to get Chicago's many museums to share resources, and a VoIP system based in multiple museums could be one way of doing that.

And that is Kerravala's point. No one is buying technology for technology's sake any more. He said it's time for companies to start thinking about how the technology can help them improve the way their businesses work.

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