companies will deploy VoIP at first for practical
reasons and in ways that give them a return on investment
but little strategic value. . The dividing line
will not be between those who deploy it and those
who do not, or between early adopters and laggards.
It will be between those who see VoIP as just a
new way to do the same old things and those who
use it to rethink their entire business strategy,
writes B Ashok*,
Sr vice president, IT services, Cisco Systems (India
Alexander Graham Bell''s day, businesses have bought telephone
services the same way they''ve purchased electricity and
water as packaged offerings defined by an external
provider. Sure, companies could choose from a menu of
configuration options and service plans, but, in the end,
the vendor called the shots.
the US, the breakup of telephone monopolies such as AT&T
in the 1980s changed the mix of providers, but it left
intact the century-old public-switched telephone network
they employ, and it left service decisions up to suppliers.
As a result, companies have been constrained by the legacy
phone systems they have depended on.
scenario is changing rapidly. While the vast majority
of individuals and companies still rely on conventional
phones, an estimated 30 percent of international phone
traffic now travels over the Internet using Voice over
Internet Protocol (VoIP) according to an A.T. Kearny study
isn''t just a new technology for making old-fashioned calls
cheaper. What makes it so potent is that it turns speech
into digital data packets that can be stored, searched,
manipulated, copied, combined with other data, and distributed
to virtually any device that connects to the internet.
of it, basically, as the world wide web for voice. Internet
protocol (IP) simply refers to the technical standards
that govern how digital information is encoded. Because
of these common standards, VoIP can interact seamlessly
with other Internet-based data and systems.
also known as internet telephony is rapidly replacing
the conventional kind. This year, for the first time,
US companies bought more new internet-phone connections
than standard lines according to research firm Forrester.
The major driver behind this change has been cost. It
is fundamentally changing how companies use voice communications
making it simple to provide all the functionality of a
corporate phone such as call features, directories, security
etc, to anyone who has broadband access. That fosters
new kinds of businesses such as virtual call centers,
where widely dispersed agents work at all hours from their
this: Since VoIP turns voice into internet-friendly data
packets, it can and will replace the rigid,
packaged phone services that most companies still use.
And because it allows businesses to create their own customised
phone applications, it will shift control of phone
services from providers that have historically defined
them to the companies that use them.
will serve as the unifying platform for such applications,
supporting customised, intelligent, and strategic uses
of voice communications. As some innovative firms are
already showing, this flexibility can fundamentally affect
how companies use voice to compete, allowing them to set
up and conduct business in ways that simply could not
have been done before.
VoIP to strategy
When the telegraph first appeared in the mid-1800s, savvy
traders used it to obtain critical information about stock
prices. Before long, the telegraph was an essential and
ubiquitous technology on Wall Street, in the form of the
stock ticker, but it was no longer a competitive differentiator
will follow the opposite trajectory. It will become
more strategically significant over time.
companies will deploy VoIP at first in ways that give
them a return on investment but with little strategic
value. They may not be ready to think about the deeper
potential of VoIP but will still install VoIP equipment
and software for practical reasons. With that infrastructure
in place, companies are in a position to develop a true
deciding whether and how to adopt VoIP, managers will
ask the usual questions that accompany any major technology
investment: What is the ROI model? What legacy equipment
and software need to be thrown away, and what are the
migration and integration challenges? Is the technology
reliable, scalable, and secure enough?
managers should be asking is how VoIP can improve
or transform their business. Successful adopters of VoIP
concentrate on two things.
they focus on achieving business objectives rather than
saving money. The huge cost savings that this technology
affords in terms of integration, maintenance and scalability
is only one part of the picture. The move to converged
networks also allows easy re-configuration to accommodate
an unlimited number of new users and leads the way to
a vast range of multimedia applications and services.
early adopters view everyone in an organisation as a resource.
Businesses that push VoIP capabilities out to their employees,
partners and customers will gain efficiencies over those
who continue to think of communications as a scarce, centrally
controlled resource. Companies that harness VoIP to achieve
business objectives will find that it is much more than
an undifferentiated commodity technology.
may be incremental, but companies should be thinking about
where VoIP could take them. Executives should explore
ways of connecting their employees, customers, suppliers
and partners virtually with shared access to modern communications
and computing. They should take a fresh look at their
business processes to find points at which richer and
more customisable communications could eliminate bottlenecks
and enhance quality.
has definitely arrived. The important dividing line will
not be between those who deploy it and those who do not,
or even between early
adopters and laggards. It will be between those who see
VoIP as just a new way to do the same old things and those
who use it to rethink their entire business strategy.
author is senior vice president, Cisco Systems India &