The problem with VoIP

There’s no doubt about it. Voice-over-IP is starting to hit critical mass and for channel players, the biggest challenge is to convince buyers to look at their IP communication system as more than just a hardware product that provides access to free calls.

Before resellers jump on the VoIP bandwagon, there are some factors they need to seriously consider. Rolling out a cohesive strategy across their customers’ organisation can be a costly and a massive challenge if integrators rely only on an ad-hoc or piecemeal plan.

System integrators need to look very closely at their customers’ current and future requirements, state of their network, type of PSTN, legacy equipment (PABX) and budget.

Brian Michaels, sales director at service provider Comvergence, says companies are happy to move to new technology and embrace additional features.

“If there is money to be saved and features to be added, then it is relatively easy to get the message across,” he says.

“Their main concern is what occurs if their IP/DSL circuit is not available. Adequate measure or hybrid systems need to be looked at in some cases.

“It is easier to install an IP system into a green field site where you are not dealing with legacy PSTN lines.”

Michaels believes it is important to package VoIP products specifically to the specific target market.

Andrew Fisher, managing director, Touchbase says company boards are now demanding clear and understandable business cases for all technology investments.

“Like buying a building or investing in new plant, technology is now seen like any other business expenditure and must deliver a clear return. It is the definition and measurement of this return, which is the challenge for many technology teams,” he says.

Please explain

Therein lies the problem for a reseller. When customers come to understand the benefits of overhauling their traditional communications system, they are willing to go through a VoIP implementation process but at the same time, resellers need to be able to clearly communicate the business benefits of updating the customer’s network.

Fisher says putting forward a business case has not been a major skill requirement of technology teams deploying VoIP.

“A lack of skill exists in most companies when it comes to clearly demonstrating the return that a company can expect for its spend on voice and data technology,” says Fisher.

“A clearly constructed business case for presentation to the board increases the chance of investment from 10 percent to 80 percent,” he says.

There is still a perception in the marketplace that VoIP is all about cost saving. Craig Neil, managing director, NSC believes it is getting easier in talking with customers however, while ROIs exist, the benefits aren’t seen for another three- to five-year period.

Matthew Lovegrove, general manager, sales and marketing, Brennan IT, said most customers still equate VoIP with ‘free’ phone calls or call savings. These savings, through toll by-pass and on-net calling, can be significant for certain profiles of business, but are not guaranteed for all.

“Even clients who can save money on calls need to work out the ROI based on the not insignificant costs of an IP PBX. That is why clients need to ensure that their partner takes the time to understand their business profile before recommending an upgrade to an IP PBX,” he says.

Where’s the benefit?

Chris Luxford, CEO at 3D Networks says his company doesn't explain the benefits of VoIP, because it’s not where the value lies.

“The value is in moving to a new communications platform that lowers costs through convergence of voice and data networks, but more importantly delivers a range of new communications tools that save money, make money and improve productivity,” he says.

Ian Poole, CEO, Integ says the voice application sector is the fourth phase of adoption, which he believes, better customer offerings. The three previous phases of adoption in VoIP includes, (toll bypass, management savings, productivity savings), which “were easier to explain and simpler to justify”.

“The current phase offers the greatest ROI but is also the most difficult to articulate. This is around the benefits VoIP can deliver in improving organisations business processes,” he says.

“The benefits can be difficult to explain due to the complexity regarding the articulation and measurement in value-adding VoIP to the current processes and the impact of ROI on the people and process changes required in the business.

Lovegrove believes there are also even clients who can save money on calls need to work out the ROI based on the not insignificant costs of an IP PBX.

“That is why clients need to ensure that their partner takes the time to understand their business profile before recommending an upgrade to an IP PBX,” he says.

Ripping out the PABX

Before a reseller goes in to even try to explain VoIP they need to look at their customers’ business and work out whether or not there is any value in upgrading their phone infrastructure.

Legacy voice technology has meant that organisations have had to operate separate systems in every location. This, in turn, has led to most companies working with multiple partners across the world to design, deliver and support their infrastructure.

Not only is this extremely difficult to manage and inefficient, new technologies which allow one system to serve multiple operations, now make it impossible to execute efficiently without one point of accountability.

Voice-over-IP now allows organisations to deliver voice as an application in much the same way as you would deliver ERP or CRM to an end user.

This simplifies the way in which technology is housed and deployed but makes the roll out extremely complex if using more than one partner.

Fisher says single sourcing of voice and data technology and services through one partner can reduce overall spend by up to 30 percent.

“This single point of contact for all aspects of the technology brings absolute accountability and significant efficiencies in spend around the management of the network,” he says.

“A great deal of focus in moving to IP telephony is placed on the voice application and its capabilities. Whilst this is a vital part of the process, there is nothing more important than ensuring that a data network can cope with the increased demands that voice will place on it.”

According to Fisher, people who have been responsible for a voice network in the past will know that it has been a proprietary environment with all of the necessary technology generally made by one manufacturer.

“An integration partner must invest continuously in its people and their skills. Using industry approved and recognised education programs, along with the real life experience,” he says.

Traditional communication systems have also been designed over many years and now they have built in lots of features that some IP systems lack.

It is important for a reseller to understand the functions that the small businesses utilise on a day-to-day basis in their office.

Michaels says many IP systems were traditionally built for larger corporations and did not require all the bells and whistles that small business use.

“I believe traditional PABX key system companies have more years experience and understand what clients requirements are internally to design which takes into account call flow,” he says.

“This is a skill that should easily be picked up by data integrators after a few installations. I think if integrators have been doing IP voice on LANS then it is a natural progression and the learning curve to provide external VoIP trunks is relatively easy.”

Lovegrove says if a customer’s current PBX is at the end of its life or the maintenance costs are beginning to creep up on older PBXs, then replacing it won’t be such an issue. “The key to a successful VoIP PBX implementation is ensuring that a client has the right underlying network – a business grade private network, with quality of service/traffic prioritisation, and the right amount of bandwidth.”

Convergence is a positive thing, says Lovegrove, but a systems integrator must ensure they understand the client’s entire network requirements – both traditional data and VoIP requirements.

Slipping up

The most common mistakes for an integrator to make when looking at voice applications are, not managing the customer’s expectations, not understanding fully the existing network infrastructure, failing to build and stage the solution in the customer’s environment prior to deployment.

The most vital aspect of any voice over IP project is that necessary time and investment must be given to this activity prior to any roll out of IP telephony is considered.

“For integrators, 100 percent of IP communications projects fail when the data network is not seriously considered as part of the project,” says Fisher.

Apart from that other common mistakes include, over promising and under delivering in call savings and not setting the right expectations with the client in regards to the implementation services component of an IP PBX upgrade.

Lovegrove says customers that hail from the voice market need to understand that they will require data skills in order to be successful in the VoIP arena. “Conversely, traditional data resellers must also realise that while the calls are data, they must gain some of the traditional skills gained by PBX providers,” he says.

Neil says NSC implements IP telephony to replace traditional PABXs when there is a catalyst for change such as premises relocation, company mergers and acquisitions or when the existing equipment has reached the end of its useful life. “One of the mistakes we made in the early stages was cutting over a customer site to IP telephony without the data network ready.

“In the few instances where we responded to customer pressure to meet specific deadlines such as premises relocation and agreed to bypass the necessary data network testing, the implementation ran into difficulties,” he says.

It is essential integrators have a solid understanding of both voice and data technologies - to be a successful VoIP integrator you cannot be strong in one aspect and ignorant of the other.

Neil says: “We found not all carriers or WAN providers were quality of service ready which made our task extremely challenging. Also in the early stages we were obviously voice centric as this was our background.”

As the demand for VoIP grew, NSC has had to skill up its data expertise and continue too add these skills to its technical team in order to keep pace with demand, he says.Lovegrove believes clients who want to upgrade to an IP-PBX, usually don’t have a data network ready for quality of service. Another mistake is not including the cost of the data network readiness into the total cost of the communications upgrade.

A lot of organisations spend an insufficient amount of time on the business case in determining the success factors and ROI. There is always an emphasis on cost savings rather than the impact VoIP solutions could have in value-adding their business.

“The impact that VoIP solutions had on the data networking infrastructure and the ‘hidden costs’ associated with building the network, security, and integration with existing legacy systems is often not factored in,” says Poole.

Resellers need to ensure they are upgrading their customers for the right reasons and if it is purely for cost savings, than they have not done a “best case ROI analysis before moving ahead,” says Poole.

“It is also important to ensure that all their requirements have been documented in a scoping document so that both parties agree on what is to be delivered.”

Ensuring success

Poole says to be successful in this space, providers need to gain the skills traditional voice providers have gained over the last 50 years as well as ensuring they have ‘new age’ data routing skills.

Prioritising IP traffic, maintaining a secure network and working out how much additional bandwidth will be required, are just three of the major considerations which must be addressed before voice over data is seen as a reality, says Fisher.

The approach that is taken to transitioning from separate voice and data networks is fundamental to the success of a transition program.

Fisher says a logical and staged approach with clear ROI and risk analysis at each stage of the implementation project will make the difference between success and failure for any organisation.

“The process starts with the consolidation of support for the legacy voice and data network followed by the analysis of the data network for its ability to carry voice,” he says.

“The next stages vary based on the clients' exact requirements but generally involve the upgrade of the data network and roll out of voice over IP to low risk environments initially. Once success has been proved and the ROI achieved, higher risk environments such as the contact centre can be considered.”

A staged approach to the project means that investment is required in smaller, more measurable stages and in many cases the initial returns can fund the next phase of the project, says Fisher.

Voice as an application on the data network is no different to running an ERP system across it. The same rigid discipline to security and resilience must be applied as with the introduction of any new application.

Increased demand for a secure voice environment is driven by its time critical nature – users are used to downtime on applications such as Exchange but will be totally unforgiving if they cannot make and receive telephone calls.

“The design of the voice application and the data network upon which it will run is the key to security and the key to resilience,” he says.

Michaels believes the best way for a reseller to understand the needs of their customer is to actually go out, purchase and install the system into their own office first.

“Initially do a thorough investigation for each new client in order to increase your success rate. Then try the product out yourself and also get specialised training on the products you are installing,” he says.

“Also, there are other significant productivity gains/benefits that may be available to businesses via an IP PBX – unified messaging for voice, email and fax, presence management, centralised reception, extension mobility, wireless VoIP handsets etc.

It is also essential that they put their staff through their chosen vendor’s training programs – it may seem costly initially, but the cost of rectifying an implementation gone wrong (and the associated damage to their reputation) will fair outweigh this investment, says Michaels.

Change their view

Changing the customer’s view on VoIP is an important consideration in this sector, because VoIP in itself is irrelevant says Chris Luxford.

In the 80’s, the communications sector moved from analogue telephony to digital and now its moving from digital to IP.

“[VoIP] is just the transport. The Value of IP telephony is that we are about to go through some significant transformation in electronic communication since the invention of the telephone and the subsequent advent of email,” says Luxford.

“We are embarking on products sets that will see all forms of communication, audio, video, IM, SMS, email, conferencing, white-boarding and application sharing - all linked by presence, across any device (phone, mobile, PC, in home devices like TVs etc) on any network, be it corporate or public.”

This transformation over the next three to five years means that system integrators need to be providing now roadmaps for their customers so they can keep pace with the demanding communications needs of their customers and suppliers.

“[Integrators] by their nature tend to predominately sell infrastructure and hardware maintenance services. As we move to an application and appliance industry, the value will be in delivering standards based intelligent middleware wrapped around information infrastructure and unified communications,” he says.

Luxford believes the primary revenue streams need to shift to development/integration services around XML, SIP, .Net, Java, J2EE, SOAP and AJAX.

“Managed services will deliver value in terms of shifting the commercial/value model for customers and lowering risk. Selling networking, storage and voice communications equipment will still happen but it will become the secondary revenue stream,” he says.