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The Business Case for VoIP
- 1. The Business Casefor VoIP May 17, 2005 Bill Karras, Sierra Systems Andy Holik, MTS
- 2. Agenda Define termsBusiness Case for VoIP (10 Min) MoIP Demo (10 Min) MoIP Business Case (20 Min) XoIP (10 Min) Questions (10 Min)
- 3. What is VoIP? Definitions: PSTN - Public Switched Telephone Network (circuit switched) PBX – Private Branch Exchange. A subscriber-owned telecommunications exchange that usually includes access to the PSTN. (Commonly referred to as Customer Premise Equipment or CPE). Centrex – A service that is similar to customer-premise PBX, but provided by means of equipment located in a telecommunications carrier site. MoIP Demo XoIP MoIP Business Case Questions Business Case for VoIP Define Terms
- 4. Relative Domains ofthe Technology XoIP is any application or content over any access to any device. Includes MoIP plus video streaming (TV), and application services. Access can be wireline, wireless, satellite or cellular. Devices can be cell phones, handhelds, laptops, desktops, servers etc. MoIP Demo XoIP MoIP Business Case Questions Define Terms Voice over Internet Protocol. Any technology providing voice telephony services over Internet Protocol (packet switched) Multimedia over Internet Protocol . Includes voice, video conferencing, presence, collaboration tools, and instant messaging Business Case for VoIP VoIP MoIP XoIP
- 5. VoIP Business CaseDoes VoIP = Cost Savings Moves, Adds, Changes Save $50-$100 per move? MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP VoIP TCO > Legacy TCO Telephone line savings? 15 minutes per desk, per day, every day, every month Sets cost over $300 Long Distance savings? $15/month per line? Business Case for VoIP MoIP Business Case ? ? ?
- 6. VoIP Total Costof Ownership Sample Business Case over 5 years
- 7. There Is NoBusiness Case For VoIP! After years of availability VoIP penetration is extremely low. (~12% businesses (IT Facts Dec 2004)) MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP North America has the highest quality, lowest cost traditional telephony infrastructure in the world. Voice simply works. MoIP Business Case Business Case for VoIP
- 8. If I’m notsaving money, why would I do this? What’s beyond VoIP Improve productivity. Reduce time and effort required for decision making MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP Disaster Continuity Other areas to save money Travel Real Estate (telework) Improve collaboration Improve quality and speed of communication ? ? ? Geographic agnosticism Business Case for VoIP MoIP Business Case
- 9. What is MoIP? 10 Min Demo/Recording Collaboration Options Instant Message, Send File, Share Connection Options Conference, Hold, Mute etc. Instant Message Area Text, Files, Presence Composition Area MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP
- 10. How’s MoIP Different?Blackberry’s can integrate telephone, scheduling, email Net Meeting can be used for video conferencing, instant Messaging WAP Browsers can be used to view the Web MoIP Demo XoIP MoIP Business Case Questions Define Terms MoIP brings Integration, Coherence and Security Business Case for VoIP
- 11. The Business Casefor MoIP is based on enabling business strategies MoIP can enable geographic expansion, tele-work, work-at-home, reduce travel costs, integrate with contact Centre applications The key is to determine your Business needs and drivers first Then match the MoIP features to meet those needs. MoIP Demo XoIP MoIP Business Case Questions Define Terms Make the decision on 100% of the business IT Infrastructure IT Non-Infrastructure Non IT Typical Organizational Budget Business Case for VoIP 2% 5% 93%
- 12. Multimedia Productivity BenefitsMoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP 2% 5% 93%
- 13. MoIP Business Case- over 5 years MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP
- 14. There Is ABusiness Case For MoIP Measure! The results can be evaluated through trials or pilots. It’s difficult to predict what features will be used and where the benefit is. MoIP can enable benefits across the entire business, not just the 7% technology infrastructure. The tangible goals and objectives are specific to the business. There’s no magic bullet. Manage Risk. There are low risk ways to migrate. Keep options open. Prove each saving before you invest. MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP What is your business? Who does what? Don’t let the tail wag the dog!
- 15. City of WinnipegTrial Features desired Customers listed the following as desirable productivity enhancing features: Streaming audio/video Collaboration capabilities (application sharing) Call logging capabilities Plug ‘n play Multi-party conferencing / audio and video MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP
- 16. City of WinnipegTrial MoIP Demo XoIP MoIP Business Case Questions Define Terms Features used Business Case for VoIP Multi-party Conferencing Instant Messaging Plug ‘n Play Web Push & Pull Video camera Call Routing Collaboration Presence & availability Call Logging Low usage Medium usage High usage
- 17. City of WinnipegTrial Features conclusion Feature usage is based on location, as well as working and communication habits and requirements : project teams remote requirements reporting structure physical proximity MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP
- 18. What is thefuture? XoIP – Any application or content over any access to any device. Includes MoIP plus video streaming (TV), and application services. Access can be wireline, wireless, satellite or cellular. Devices can be cell phones, handhelds, laptops, desktops, servers etc. Optimization of assets. Buy one thing for many uses Continuity across platforms. Don’t need to worry about disconnecting and using another device. MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP The Future is XoIP
- 19. Business Case forMoIP MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP Non-IT cost savings can be found but usually do not sustain the business case. Productivity improvements can represent a significant positive contribution to the business case if you: IT cost savings are not supportable Know your business Measure the results Manage the risk
- 20. Questions? ? ?? MoIP Demo XoIP MoIP Business Case Questions Define Terms Business Case for VoIP
Editor's Notes
- #2 Synopsis: The Business Case for VoIP The adoption of business Voice over Internet Protocol is being driven by the competitive advantages of the features. However, these advantages must be accurately quantified to build a supportable business case. (i.e., Don’t just buy it for the flashy features…) Sierra Systems and MTS will present a demonstration of the most productive VoIP features currently available and then discuss the construction of the business case, based on the productivity gains and costs for a real-world organization. Bios: Bill Karras has spent 15 years in various Information Systems roles, managing development and operational environments. Bill is a Principal at Sierra Systems and is working on VoIP and other projects within Winnipeg. Andy Holik has held a number of responsibilities during his five years of Product Management in the Marketing department at MTS including IP Centrex, IP Services and most recently, New Product Development. Prior to coming to MTS Andy worked in marketing in the advertising, financial, and agriculture sectors.
- #3 Define terms – industry terms are not universally accepted and confusion often arises from this Business Case for VoIP – reviews the traditional cost savings argument for VoIP MoIP Demo – demonstrate the first generation integration of multimedia features MoIP Business Case – provides some insight into the synergies found in deploying MoIP XoIP – a quick glimpse at the future of the industry
- #4 PSTN - the baseline for this presentation. It has 100 years of history and is referred to a the legacy phone system. VoIP - is a replacement for the PSTN over a more efficient infrastructure. It is first generation. MoIP and XoIP - include the layering of services, including voice over IP networks.
- #5 VoIP - is a direct substitution of legacy voice services with services based on IP infrastructure. It offers few additional features. MoIP - is second generation VoIP. It offers all of the features of VoIP and integrate Multi-media capabilities XoIP – is the next generation of communication. It’s value lies in the integration of features. Acquiring a new device for each function is not economically feasible
- #6 Savings – are the traditional argument for the implementation of VoIP Telephone Line Savings – VoIP is more expensive than Legacy phone systems when total cost of ownership is compared. Long Distance – Long distance savings generally work only with intra-company calls. With external calls, most business VoIP charge long distance rates. Savings are difficult to achieve except in toll-intensive senarios. Moves Adds and Changes – Once the purchase of a new set is considered, a minimum of 3 moves is required, and often more, before break-even is approached. This is not a compelling business argument over 5 years
- #7 Business Model - represents an actual business case done in Winnipeg for Voice over IP by MTS in 2004. 120 employees Current phone system fully depreciated No legacy applications to integrate Costs - for each business case costs are variable and will not match this diagram exactly. However, amount of variability is typically less than $3 per month. When all costs considered, VoIP costs more than traditional phone systems. Variations - Multiple scenarios are included to show variable approaches to the problem, however the result is the same. Centrex typically and PBX have different sweet spots for total number of lines and uses. This may not be a linear relationship as described here.
- #8 No Business Case – Less than 2% of all calls travel over IP infrastructure. 100 years of optimization ensures legacy voice works as advertised.
- #9 Value of VoIP – VoIP does have some advantages over legacy voice systems but these tend to be in specialized business segments Other Areas – Travel and real estate savings can be significant in some markets but must be carefully quantified Improved Productivity – generally associated with the features layered on VoIP Disaster Continuity – VoIP doesn’t care where I log in from. If the business site is inaccessible, the company can log in to the phone system from an alternate location and resume with little interruption
- #10 MoIP – Includes voice, video conferencing, presence, collaboration tools, and instant messaging. It is the layering of productivity enhancements on an IP infrastructure. The communicators are no longer limited to voice, but can include text, files, images, and other business deliverables
- #11 Difference – MoIP enables a seamless integration of features, always available. It is not exclusive and can integrate other platforms, saving a fork-lift approach.
- #12 Business Case for MoIP – MoIP enables savings on 100% of the business.
- #13 Benefits – focus on 100% of the business affected. Even small savings in resources across the organization can have significant impact on the bottom line. The benefits reported will be unique to the business, and are often unexpected. Pilots and trials, when properly planned, can extract the benefits in a quantifiable format.
- #14 Business Case – now include synergies, not just costs. Values extrapolated from previous slide. Business value came from total productivity gains, not IT exclusively gains Communications – transforms from a cost of doing business, to a contributor to the bottom line. Stability of the Argument – If these numbers are out by a large factor, the impact is still significant. In the future, this will be the baseline and considered the cost of doing business
- #15 Entire Business – MoIP benefits have greatest impact across the business Know Your Business – MoIP benefits are not always were expected and call centres do not represent the bulk of the business Measure – Senior management wants values that are meaningful and supportable. This isn’t easy Risk - Keep your options open and manage risk. The setback from a poorly conceived pilot will be a significant obstacle to overcome