Call Forward voip
http://www.financetech.com/printableArticle.jhtml?articleID=184429045
Apr 05, 2006
URL: http://www.financetech.com/showArticle.jhtml?articleID=184429045
With promises of cost savings, enhanced functionality and stronger business continuity capabilities, Voice over Internet Protocol (VoIP) and IP telephony burst onto the scene more than five years ago. But fears about call quality and reliability kept the emerging technology mostly waiting in the wings. Now that it has matured, however, insurance carriers are expected to embrace VoIP and IP telephony solutions more widely in the next two years, according to experts.
"Currently, 27 percent of insurance companies in the United States have implemented IP telephony and 23 percent have applied VoIP," reports Lisa Pierce, vice president at Forrester (Cambridge, Mass.), who predicts that "50 percent of the insurance market will deploy this technology before 2010." Insurers are using the technology within branch environments to bring mobility to agents and brokers who move from branch to branch as well as to enhance customer service in the call center, she explains.
"The technology matured significantly in the last five years," relates Julien Courbe, managing director of service technology at BearingPoint (McLean, Va.). No longer bleeding-edge, VoIP and IP telephony -- the routing of voice conversations >> over the Internet and other IP-based networks in which voice data flows over a general-purpose, packet-switched network instead of traditional dedicated circuit-switched voice transmission lines -- also is no longer plagued with the quality issues it exhibited when it first appeared on the scene in 1998. "The major difference between VoIP and IP telephony is that with VoIP, you keep the legacy environment, whereas IP telephony represents the integration of a telephony application within the corporate environment," Courbe explains.
Both approaches offer opportunities for cost savings, as the technology enables both data and voice communications to share the same network, resulting in a simplified infrastructure and, consequently, streamlined network management. Further, it enables firms to avoid traditional phone charges by routing long distance calls over the Internet. But the advanced functionality, and resulting productivity gains, that VoIP enables may be emerging as an even more important business driver for the technology's adoption.
Feature Rich
For example, with the addition of tools that allow calls to be taken from virtually anywhere -- including via e-mail or BlackBerry devices -- and to be transferred automatically to knowledge experts within a call center, IP telephony provides opportunities for enhancing the overall customer experience. "No individual user needs all 400 features in IP telephony, but all of the options allow companies to choose which functionalities fit their enterprise needs," says Tony Kleckner, director and practice leader of financial services for Avaya, a Basking Ridge, N.J.-based VoIP and IP telephony vendor. Other vendors of converged communications solutions include Cisco (San Jose, Calif.), Nortel (Brampton, Ontario) and Vonage (Holmdel, N.J.).
VoIP can be deployed on any IP network, including those lacking a connection to the rest of the Internet, such as local area networks (LANs), using IP private branch exchange (PBX) ports and legacy digital PBX ports. Methods include connecting traditional telephones to VoIP converter boxes, installing IP-based phones that connect directly to the Internet or deploying "softphone" software that allows users to make calls from any personal computer using a headset or microphone.
VoIP grew from 1.2 million business subscribers in 2004 to 4.2 million business users in 2005. In the insurance industry, the seemingly sudden surge in VoIP and IP telephony adoption actually began several years ago, but companies only recently have finalized updates to legacy network technology that were originally initiated to maximize VoIP functionality and ensure network security.
"In the past year, VoIP grew eight fold," relates Kevin Kalinich, a consultant and national managing director of professional risk at Aon (Chicago). "Insurance carriers are looking at the advantages from a business standpoint and focusing in on network risk prior to implementation -- anticipating the vulnerabilities to security and exposure," he explains.
Yet, security has been the major challenge for insurers adopting VoIP. "Voice data is different from regular data, and CIOs have to devise network plans to include voice encryption, authentication and VoIP-specific firewalls," says Kalinich. The danger is that it is relatively easy to eavesdrop on unencrypted VoIP calls using open source solutions such as VoIPong or Vomit. As a result, many companies implement separate encryption and authentication tools to prevent hacking and eavesdropping.
Although most VoIP vendors include security solutions as part of their VoIP packages, "Security is a big issue," confirms Forrester's Pierce. "Most companies don't deal with security issues very well, and there are a lot of risks out there -- viruses, worms and hackers."
Money Talks
Still, most experts agree that with proper planning and network support, the benefits of VoIP outweigh the risks. In general, phone service via VoIP costs less than traditional landline service because users only need to maintain a single network. "With IP telephony, outgoing costs can be reduced by 15 to 20 percent of the recurring expenses of the matching legacy telephony environment," asserts BearingPoint's Courbe.
Cost was the initial reason St. Paul Travelers (St. Paul; $113.2 billion in total assets) adopted VoIP, according to Jamie Libow, telecommunications director for the carrier. "Initially, it was just cost savings that drove us to look at VoIP as a replacement for legacy phones," he explains. "The market was starting to move toward VoIP, and we knew the time would come soon so we needed to get our feet wet."
Libow began running internal pilots on several VoIP vendors' products in 2000. "I was looking for a stable platform with the utmost performance," he says. "In 2000, the system uptime wasn't what we were looking for."
Libow and his team eventually found more-robust products to meet the needs of the business. They decided that by combining Avaya's S8700 Media Center call center solution and Cisco's CallManager for agents and interoffice use, St. Paul Travelers would be able to maximize both stability and cost savings. "We decided to implement both vendors' solutions during a renovation in Hartford, Conn.," explains Libow. "We were able to run both on one [network] wire with IP telephony instead of two, and that proved to be enough of a cost justification."
By implementing VoIP, the company saves 33 percent of what it was spending on traditional telecommunication. But, gradually, St. Paul Travelers realized other benefits of the VoIP system besides cost. Softphones have enabled the mobile workforce to be more accessible while traveling between the carrier's two key locations in Hartford and St. Paul. "All of our agents can now be reached at a single number internally," says Libow. "Next, we will continue to roll out more functionalities for remote agents."
Cost also was the primary reason Johnson Inc. (more than U.S. $600 million in annual premium), a St. John's, Newfoundland-based personal and group home, auto, and travel insurer, decided to switch to IP telephony. "We wanted to get back some of the communication costs," says Glen Ryan, the carrier's coordinator of technical communications. "We have 43 office locations across Canada, and to keep things flowing on a daily basis was very expensive." Because Johnson Inc. had the existing infrastructure to support Cisco's VoIP product, in April 2003 Ryan tapped Cisco's CallManager for internal communications, and IP Cisco Express and Cisco Unity for the company's contact centers.
Initially, Johnson Inc. implemented the technology at six regional offices. To deploy the solution, the insurer first had to remove rented telephone equipment from Telco (Kfar Netter, Israel) and install a whole new network at each branch location, for which it contracted Aliant (Saint John, New Brunswick). "We decided that trying to merge any old technology with new technology would only cause more of a hindrance," explains Ryan. "Since we were renting, it was just easier to spend on the equipment to get more of a return on investment." Aliant also installed Cisco's solution for Johnson Inc. The entire initiative took two years to complete.
Johnson Inc. already has experienced a significant savings. "Before, our communication costs were around $2.4 million [CAN, approximately U.S. $2 million] annually, and right now we are running at about $1.6 million [U.S. $1.37 million]," according to Ryan. But Johnson Inc. also has recognized the customer service benefits offered by VoIP. Currently, it is working to tie Cisco's contact center features into the carrier's e-business strategy. "We have a 24-hour call center service that allows live chat with representatives," says Ryan. "We want to make sure we are offering the best customer service we can."
Stay on the Line
As Johnson Inc. is discovering, VoIP's benefits extend beyond cost savings. The technology enabled Northbrook, Ill.-based Allstate ($156 billion in assets) to service its customers at a critical time -- after Hurricane Katrina ravaged the Gulf Coast, including several Allstate facilities. With many offices and customers affected by Hurricane Katrina, Allstate was able to immediately transfer call center activity to other locations around the country. "Our business is about putting people's lives back together," says Catherine Brune, CIO for Allstate. "Because of VoIP, we were there for our customers when many of our competitors couldn't be."
But like many other companies, Allstate first looked at VoIP as a cost-savings play. "It has become much more than I think we ever envisioned it," notes Brune. "It is truly an enabler of a new business process and business continuity."
Allstate began exploring VoIP in 2000 and by 2003 decided the technology had matured enough to make the investment. Because Allstate already was using Avaya for telecommunications, the carrier's executives decided to deploy Avaya's Communication Manager in a customer-facing call center in Northern Ireland. "In the U.S., we struggled with how we could build a business case, holistically across the enterprise," explains Clay Roberts, enterprise architect for Allstate. "We figured if we could deploy this properly internationally, we could deploy this properly in the U.S."
Since the IT department had been testing VoIP products internally for several years, implementation went fairly smoothly, according to Roberts. By the end of 2004, Allstate built a business case on the benefits it gained from VoIP in Northern Ireland and decided to roll out the technology on a year-to-year basis. Since then, Allstate has implemented IP telecommunications throughout 20 Allstate service and call centers. "Now, we are in the process of rolling out IP telephony to a majority of contact centers," relates Roberts, who adds that the initiative is scheduled to continue over the next few years.
A Fresh Start
The same advanced VoIP functionality that appeals to established carriers like Allstate also can help start-up insurers provide high-level customer service. And since start-ups don't have legacy systems to deal with, many -- such as Calabasas, Calif.-based Insurance Neighborhood, which was incubated by Indianapolis-based WellPoint ($41.8 billion in total assets) -- are leapfrogging into VoIP. "Since our consumer promise is convenience of the Internet and the service of the local agent, we need to have a local network from Day 1," says Alan Katz, president and CEO of Insurance Neighborhood, who notes that the carrier deployed ShoreTel's (Sunnyvale, Calif.) VoIP solution because of the scalability and expandability of the system's features.
And carriers such as New York-based Integro Insurance Brokers ($300 million private placement) realize that converged communications can provide a competitive advantage right out of the gate. "The telephone is critical in our business," says Craig Lowenthal, CIO for Integro. "VoIP offers a combination of products and services for our employees to be accessible to our clients." The company, which started up in May 2005, chose Nortel's CS1000 platform for telephone switches, Call Pilot for voicemail, MCS 5100 multimedia server for audio and video conferencing, and the IP 2007 Phone -- VoIP phones that can be integrated with each employee's computer. "With this technology, our brokers can collaborate with each other as if they were all local," says Lowenthal. Currently Integro is live with VoIP in nine offices. It is in the process of implementing VoIP in five more offices and extending its features.
Of course, start-ups aren't the only organizations with an opportunity to build a VoIP network from the ground up. As part of an effort to migrate to a new core system, Safeway Insurance (Westmont, Ill.; $15.7 billion in total assets), which first began investigating VoIP in 2001, recently adopted the technology. "We didn't feel comfortable with the technology until recently, where we found ourselves in a unique position," says Mike Leather, network services manager for the insurer. "We were moving one of our offices and decided to investigate VoIP to replace one of our legacy systems." Safeway's legacy telecom system from Tadiran (Port Washington, N.Y.), located in the carrier's Monroe, Calif., office, "was an expensive system because we needed to call someone in to implement any changes," explains Leather.
In June 2005, Leather decided to implement ShoreTel's VoIP solution in the Monroe office. "Although we looked at a couple other vendors, it pretty much came down to ease of maintenance and the ability to manage the system ourselves," he says. The ShoreTel system, which runs on Safeway's Microsoft (Redmond, Wash.) Windows 2003 servers, is a distributed, scalable solution layered on the IP network. Along with ShoreTel's system, the carrier elected to implement Power-over-Ethernet (PoE) switches, which allow technicians to run just one Ethernet cable to the access point for supplying both power and data. Implementation took two days.
Leather relates that Safeway chose to purchase the system with every available feature, including call center forwarding and digital messaging. "In the future, we plan to exploit more features of VoIP, like screen pops, to provide better customer assistance," he explains, adding that the insurer is in the process of rolling out the system to nine more of its offices, a project that should be completed by May. "This is a great investment for Safeway," says Leather. "Overall, the cost of maintenance on the legacy system alone was going to be more than deploying this system."
April 10, 2006 at 09:00 PM in Telecommunications | Permalink
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