VoIP call centers on a slow but steady adoption path

By Sue Hildreth, contributor 12 Jul 2006 | SearchCRM.com

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"For most companies today, VoIP is not a question of if, but rather when and how," said Lori Bocklund, president of call center consulting firm Strategic Contact, based in Beaverton, Ore.

A survey released in May from Boston-based Infonetics Research found that 36% of large organizations, 23% of midsized ones and 14% of small firms were using VoIP last year.

By 2009, there will be no sales of traditional phone systems. Jeffrey Snyder manager of enterprise communications, Gartner

Additionally, according to the Stamford, Conn.-based research firm Gartner Inc., sales of new VoIP products are overtaking traditional circuit-based TDM (time-division multiplexing) systems, not only in call centers but elsewhere in the corporate enterprise.

"By 2009, there will be no sales of traditional phone systems," Jeffrey Snyder, manager of enterprise communications with Gartner, said. "Sales of traditional TDM endpoints will be under 10% of all endpoints systems. And those will be extensions to existing systems. All new system sales will be pure IP, or hybrid systems that can support both [TDM and VoIP]."

So why have companies not rushed to VoIP sooner?

One reason is that many firms have been waiting for VoIP to prove its quality and reliability in the call center. Another is that call centers are usually business-critical operations which no CIO can afford to shut down for a complete overhaul of hardware and software. Plus, there isn't a compelling reason to dump the old technology yet.

"By now, into 2006, most of the IP-based offerings are very strong. But given that, there's no reason to throw out all of your old technology and buy new. Instead, as you move forward [with upgrades], you should be moving to IP," says Donna Fluss, principal at CRM analyst firm DMG Consulting LLC, in West Orange, NJ.

That means that companies tend to wait for the next upgrade and then follow their call center vendor's IP migration path, often adding VoIP-enabled upgrades but maintaining the TDM system.

New call center sites, however, are more likely to be VoIP-only. Likewise, organizations that want easier management of geographically dispersed call center offices or home-based agents, or which want greater flexibility to move agents around, are likely to prefer VoIP.

For more on VoIP in the call center Visit the VoIP call center topic section on SearchCRM.com Listen to a podcast with Richard Feinberg on customer service Get a look at some of the vendors in the VoIP market

Such was the situation for the CGI Group, an IT management firm in Toronto. It implemented a Nortel Networks IP-based contact center in February 2005 because it was moving its call center to a new building. CGI also wanted the ability to rearrange teams of agents without having to move and reprogram phones each time.

"The agents aren't tied to a phone extension anymore. So if we need to move agents around, we don't have to call in the phone technicians every time," said Alec Ko, partner and executive consultant for the CGI Group.

Another obstacle to rapid growth has been the need to invest in upgrades to the data network in order to support VoIP traffic and guarantee both call quality and network reliability. Otherwise, a temporary outage won't just delay e-mail -- it will bring all call center operations to a complete halt.

"Now, we can't even call to them and apologize," Ko said. "So we really can't have the voice and IP center go down at the same time."

Organizations that don't invest in their data network are more likely to have a poor experience with VoIP.

"Redundancy can get expensive. So some people are building networks that are just barely good enough," Snyder said. He estimates that 90% of organizations wind up having to reconfigure their data networks, including upgrading routers and switches, and adding traffic-shaping software to give priority to voice traffic.

Yet another deterrent has been the difficulty in pinning down quantifiable benefits.

"One of the reasons that this has been slow to take off is that it's still very hard to quantify the savings and benefits," Fluss said, noting that IP-based contact centers are comparable in price to traditional TDM call center implementations. "There may be economies of scale from having everyone on the same switching environment. It is also possible to get some reduction in network and maintenance costs. But finding those hard dollar savings, depending on the situation, can be a challenge."

Nevertheless, given VoIP's ability to make management and mobility of distributed call center agents much easier, as well as the fact that call center system vendors are supporting it, it's destined to displace traditional voice technology within the next few years.

"IP is the direction that the industry is going," notes Snyder, "so it would be foolish to purchase a system today that can't support IP going forward."

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