May 2000

BY DOUG BOYD, ESI

In the small to medium-sized business environment, the explosive growth of converged voice and data applications on both traditional and server-based PBX platforms has enabled the development of competitive, low-cost front-office phone systems that are easy to use and offer a variety of feature-rich computer-telephony integration (CTI) applications. These integrated phone systems are helping companies dramatically increase internal productivity while enhancing these companies' ability to respond more effectively to customer needs.

Most integrated phone systems today offer productivity-boosting features such as voice mail, automatic call distribution, caller I.D., live call screening and recording and a standard TAPI interface. This article will discuss industry trends in integration and CTI and provide specific applications that can improve employee efficiency, productivity and customer satisfaction.

The Products
The products available today are single-platform, with a single operating system. Gone are the days of a telephone system KSU (key system unit) with an attached voice mail system or a separate board that plugs into the KSU back plane. These older systems offered severely limited functionality because they were, in effect, transferring calls between two platforms. Today's newer systems can be either single-platform with a high-performance proprietary operating system or a server-based product. Each product processes all call functions on a common system. This eliminates call hand-offs and enables the easy-to-use, advanced, productivity-enhancing features discussed below.

Productivity-Enhancing Features
Voice mail and auto attendant features are standard on most phone systems sold today. Integrated systems eliminate many of the common complaints of the old systems. They allow you to dial while on hold, thereby eliminating "voice mail jail." Calls can be answered live or by the auto attendant. If you prefer to answer customer calls live, with the auto attendant answering your other calls (employees, personal calls, vendors and others), your operator can provide a higher quality of service to your customers.

Automatic call distribution (ACD) used to be an expensive option. Today it is standard on most advanced systems. ACD answers a call and either sends the call to designated personnel or places the call on hold for the next available person in the group. The system will use the telephone display to show the number of calls waiting, so additional personnel or supervisors can take the next call in queue to improve customer service. Without the ACD feature, an operator must place calls on hold and try to remember which call is to be transferred next. Today's advanced small business systems with multiple ACD group capabilities allow you to set up small ACD groups for individual departments. The improved efficiency and accuracy in call handling improve not only service, but overall customer satisfaction. Also remember, with the dial-while-on-hold capability mentioned previously, an advanced integrated system lets a customer dial out of an ACD group at anytime while on hold. This eliminates customer frustration and improves customer service and your company image.

Live call recording means the days of having to hand-write messages are long over. Wrong telephone numbers and lost "pink notes" are a thing of the past. With a single keystroke, a receptionist -- or anyone feature-authorized -- can record a conversation. The conversation can then be transferred as a message into a recipient's voice mailbox. A few systems even allow you to simply touch one or more DSS keys during the recording and automatically transfer the message into one or more mailboxes. The answering party will no longer have to ask the caller to repeat information, which saves time for both parties and offers a much more efficient and professional way to handle customers.

One of the most commonly viewed disadvantages of an auto attendant is that your calls are no longer screened. Live call screening puts you back in control of which calls you answer. When a call comes to a station and the caller begins to leave a message, the telephone speaker is automatically activated and you will hear the calling party leaving you a message. If you want to take the call, you just lift the handset and are automatically connected to the caller. Unlike older voice mail systems that ask the caller to state his or her name and then call the station, the new systems do not notify the caller that the call is being screened. Live call screening offers a much less obtrusive process, while still improving the user's productivity by screening unwanted calls.

Many individuals already have caller I.D. in their homes. Integrated phone systems today provide caller I.D. as a standard feature. When a call comes to a station or office, the caller's name and telephone number appear on the telephone display. If a second call comes in, call-waiting caller I.D. displays the name and number of the calling party and, with a single keystroke, you can toggle between calls, just as you would at home. Caller I.D. can help improve customer service by prompting you with important incoming calls. Some non-integrated phone systems that are based on older technology have attempted to provide caller I.D. by adding a separate box and module; this provides only limited caller I.D. features. Some systems will display caller I.D. only on calls answered by the auto attendant. Many older systems lose caller I.D. information if the call is transferred. Finally, many systems do not provide customers with the best productivity enhancer: call-waiting caller I.D.

A TAPI-compliant phone system lets you integrate the functionality of your PC with your telephone system. For example, a PC with special software can be set up to read incoming caller I.D. information provided by your phone system and bring up a screen of that information so that you have immediate viewable data about the calling party. (Obviously, the database of information must be set up in advance to display the information.) With Microsoft Outlook and a TAPI-compliant system, you can use Outlook to dial automatically from your personal directory. In many cases, the efficiency and ease of use -- along with the greater availability of personal information -- make it possible for the user to provide more personalized service. Buying a new telephone system that lacks TAPI-compliant capabilities will severely limit access to the advanced applications available today and in the future.

The Beginning Of Evolution
No current article about telephone systems would be complete without a discussion of the convergence of the circuit-switched and packet-switched network and the accompanying evolution in telephony products.

Traditionally, voice has been carried over the public-switched telephone network (PSTN). Customers have become used to the high quality and reliability of this system. The 99.999 percent up-time to which we have become accustomed is not easily duplicated in other environments, yet the evolution to a packet-switched network is well under way.

Why is there a movement to packet-switched technology? Packet-switched technology (i.e., the LAN, WAN and Internet) is more efficient and allows greater flexibility as well as potential cost savings. No longer will you have to manage two separate internal and external networks. Common operating systems, hardware, software and cabling will simplify installations, MACs (moves, adds and changes) and administration.

Two different types of products are emerging in this environment. The first product category consists of network servers or appliances that run on proprietary hardware and software. These products offer high performance and reliability. Since manufacturers generally build all the major product components and develop all software, they have complete control of the product, thereby eliminating software and hardware conflicts. The downside is that you probably will have to rely on a single vendor for software enhancements.

The second category, a typical PC PBX product, consists of a PC and voice boards. The operating system on which the software is based is either Windows (usually Windows NT or, more recently, Windows 2000) or Linux. In a typical Windows and Windows NT software evironment, hardware conflicts and quirks will probably still exist. If you are willing to live with these issues, you may eventually realize the potential advantage of greater availability of software. It has been thought that Linux has shown more reliability in some applications, particularly in maintaining file servers, but it remains to be seen whether it is ready, or sufficiently well supported, to be a mainstream operating system on which mission-critical business telecommunications can rely.

There is a great deal of change underway in the telephone system industry. The traditional circuit-switched products have some notable new, highly integrated systems that offer enhanced features and high reliability, and these systems will be around for years to come. If you purchase one of these products today, make sure the manufacturer offers an easy way to eventually connect to a packet-switched network environment. This will enable you to purchase a system with the features you need and avoid being left out a few years from now, when you might want to take advantage of the performance and cost efficiencies that packet-switched networks offer. (Sooner or later, you will.)

The server-based, LAN/WAN/Internet packet-switched products offer another possibility. In most emerging technologies -- as happened in the early days of the PC revolution -- critical applications usually tip the scales in the decision process. The need for certain functionality outweighs the drawbacks and risks associated with being the first wave up the beach and users are willing to venture into the new frontier. This will be the case in the PBX arena. New applications, such as seamless calls over the LAN, WAN or Internet to multiple locations, or virtual telephones using DSL or ISDN, immediately come to mind. There is also the promise of virtual ACD groups with agents in different locations, as well as potential cost savings by using existing or upgraded bandwidth to eliminate dial-up telephone charges between offices.

The most important key to increased productivity: Purchase a product that both fits your needs today and will still allow flexibility for future technology advances. Don't take a step backward in functionality for the sake of technology, with only a promise that the functionality and reliability you need today will be available in the product tomorrow.

Doug Boyd became president of ESI (Estech Systems, Inc.) in 1998. ESI designs and manufactures high-efficiency, low-cost telephone products including the VoiceWorks automated attendant and voice mail system, the PhoneBill call accounting system and the IVX (Integrated Voice Exchange) family of all-in-one digital phone systems.

BY BARRY CASTLE. 3COM CORPORATION

E-commerce has long been regarded as the marketplace of the future. But most of us would agree that the future is already here. In a report released in January 2000, The GartnerGroup estimated that business-to-business e-commerce will generate revenues of $403 billion this year alone. What's more, the report predicted that e-commerce will continue its rapid growth, generating $7.29 trillion in sales transactions worldwide by 2004. Businesses cannot afford to ignore such an enormous market opportunity.

Success in the new e-commerce marketplace will be determined by how fast companies can introduce new services. Flexible IT systems will be a prerequisite for supporting the migration to quicker, more reactive methods of marketing and delivery of these services. While many companies have already begun their transformation into e-businesses, legacy voice and data networks have slowed their progress and hampered their success. For these companies -- and the rest that have yet to commence the inevitable e-business migration -- LAN telephony can provide the key to success.

The First-To-Market Advantage
Time to market is one of the most critical success factors for an e-business. Delivering new and compelling services creates short-term incentives for new customers to choose a particular vendor over another. Time to market also contributes favorably to customer retention. On the down side, businesses will not be able to relax because even as they begin to reap the benefits of their new service, their competitors will be ramping up their "me-too" delivery. With e-business, operations are upfront and visible, so competitive advantage must be viewed as temporary and always subject to attack.

With the e-business model, the marketing mix is still the same -- product, price, promotion and place -- but the speed at which the mix is delivered is the determining factor in establishing mind-share, customers and healthy business growth. This is why we see many organizations willing to operate below profit for the sake of establishing early ownership of a category. While this is an extreme course of action, it illustrates the great financial and strategic importance of being first. Whether or not a company chooses such a strategy and regardless of how willing it is to expose itself to risk to achieve a first-to-market position, speed is clearly critical.

The Flexibility Imperative
The importance of technology for business has been growing steadily for years, to the extent that today, in the new e-commerce marketplace, it is fundamental. Moreover, technology now needs to be highly flexible to meet the core business requirements of e-businesses. The rapid introduction of new services will not be possible unless the enabling technological infrastructure itself can be rapidly reengineered to deliver and support those services.

This changing role of technology is particularly evident if we consider the case of call centers. Where once telephones and basic data entry systems were sufficient, the latest generation of call centers now allows customers to interact via multiple media -- fax, e-mail, voice, Web transactions and application-to-application transactions. Call centers, it can be assumed, will continue to be one of the business areas that will lead the way in the introduction of new and flexible technologies to empower more effective customer services which are so vital to a company if it plans to effectively differentiate itself from its competitors.

The "Network Of The Future"
Throughout the IT industry, vendors and industry bodies alike are working to introduce new products and standards that deliver the heightened flexibility demanded by e-business. Telephony is an area that has come under particular scrutiny recently, as it is recognized that today's centralized PBX architectures are too cumbersome. As a result, new LAN telephony solutions have emerged that enable the radical transformation to distributed architectures. Research firm Cahners In-Stat indicates that LAN telephony will become "the network of the future" and that sales of LAN telephony equipment will outstrip sales of traditional PBX equipment by the year 2003. (Report: LAN Telephony -- The Future of Enterprise Voice.)

The new LAN telephony systems are ideally suited to meeting the flexibility requirements of e-businesses. They can be installed in minutes and offer a stepwise improvement in the speed that new telephony applications can be implemented and supported. Any business with a network can simply plug in a next-generation PBX and immediately save time and money from an integrated voice-data solution.

With the computer-telephony integration (CTI) solutions currently in place at many organizations, legacy PBXs are linked to IT application servers by using adjunct PCs with voice or fax processing boards. Typically, application developers use middleware application programming interfaces (APIs) so the applications know how to integrate the PBX into the application offerings.

This kind of architecture certainly works, having proved itself in the majority of business CTI implementations over the last decade. However, these systems should be viewed as a stepping stone to a better overall design in which communications of all types travel across the same converged infrastructure and application servers and agent devices can all be addressed using a common open signaling protocol -- Internet Protocol (IP). Open by design, this kind of architecture ensures that systems are easier to deploy and manage, and most important, integration is designed in rather than fixed with an adjunct. The first such LAN telephony solutions based on IP are already commercially available today.

Making The Transition
While many business leaders may feel inclined to adopt a cautious approach to LAN telephony, they will miss out by putting their e-business strategies on hold. They should be very careful about signing up for a legacy PBX as it could leave them with a five-year depreciation cycle right in the middle of the most exciting growth period for e-business. Instead, businesses should take advantage of the opportunity to be among the first enterprises to implement LAN telephony solutions to drive their e-business success. Companies like Home Shopping Network are already putting LAN telephony solutions to great effect as part of their e-business strategies. As mentioned before, being first counts.

In making the transition to LAN telephony to support new e-business models, companies will naturally have concerns about protecting their existing network and telephony services. It is a common concern, for example, to be worried about bandwidth, but vendors will be able to easily help design and validate an architecture that will satisfy anticipated needs.

Quality of service is another area IT managers will be concerned about. All network components, whether switch infrastructures, WAN gateways and routers, network interface cards (NICs) or next-generation handsets, will need to be able to differentiate between various traffic types. With application awareness built into every access point on the network, and with every NIC acting specifically as an RMON probe, the network delivers crystal-clear voice when you need it and as reliably as you need it.

Finally, businesses will want to ensure that their networks are designed to eliminate any potential failure points and provide proactive alerts of any device or usage event that may affect total network availability. Switch infrastructures, server NICs and WAN connections can all be designed for load balancing and sub-second failover. After all, the network is critical to the bottom line and should be designed appropriately.

From Bricks To Clicks
Moving from a "bricks" to a "clicks" business model will, to a greater or lesser extent, involve a migration of business strategy and technology for all companies. The sooner this migration is initiated, the sooner companies will be positioned to take advantage of the huge growth potential of e-commerce. One thing is certain: The new generation of e-businesses will need rapid delivery just to remain in business. LAN telephony can deliver dramatic improvements in flexibility and speed that will never be matched by legacy architectures, and therefore, can provide the best solution for successful e-business.

Barry Castle is a director within the voice solutions group of 3Com Corporation and was previously vice chairman of ETSI Tiphon, Europe's IP telephony standards committee.