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July 2008 | Volume 27 / Number 2
CALL CENTER Technology

IP Comes Of Age

By Brendan B. Read
Senior Contributing Editor, Customer Interaction Solutions

If your contact center has, about to, or is planning to install an IP-based voice system, for reasons such as finding it to be the best choice in replacing your old ACD or supporting a new site or remote or home agents, then your facility is on track to become the new norm.

Research and consulting firm Gartner expects that shipments of IP-based switches will (if they have not already) for the first time exceed ones that use traditional circuit-switched PSTN-based time division multiplex (TDM) technology.

That cutover to having a majority of contact center seats IP-enabled could occur in the next few years. This trend, say analysts and suppliers, is being driven by legacy switch replacement cycles, adoption of IP by small/midsized contact centers, new sites, remote agents and informal contact centers, and by customer migration to text and e-mail from voice.

Keith Dawson, Senior Analyst with research company Frost & Sullivan estimates that while 10 to 15 percent of North American contact centers now have IP telephony, this figure will rise quickly as organizations see strategic value from the technology. His firm projects that IP will connect a majority of seats deployed around 2009–2011.

Paul Lutz, Product Marketing Manager-Multimedia Applications, Nortel saw the switchover in sales in 2007 with existing and new customers embracing the IP format.

Strong sales now have the momentum that will make IP even more prevalent in contact centers. As demand increases, prices and support costs drop while features, functionality, and quality grow, thereby attracting even more customers. The reverse will be true for TDM. Lessening demand will lead to high sticker prices, and consequently lower supplier investment in, and support for the older technology.

"It is a prevalent industry view that when more boards are produced and more common elements are used, per-unit expenses are lowered, while the opposite is true when fewer common elements are used and fewer units are produced," explains Lutz. "As a result, it is unlikely that the industry will provide contact centers with TDM phone systems at the same prices as when they were buying three times as many units prior to the advent of IP."

Yet you may find that maintaining your existing TDM routing provides the best quality and value for your general call handling needs. You're not alone there too. Raun Kilgo, Director of Product Management, Aspect reports that while there has been increased IP adoption amongst his firm's customers it has not been, in most instances, as replacements for TDM.

"Most of our customers have already invested in and are comfortable with TDM applications for their mission-critical inbound and outbound work and would need a compelling event to rip and replace their existing infrastructure," reports Kilgo. "Alternatively, IP is the ideal solution for companies implementing new contact centers or deploying remote or at-home agents."

What is clear is that it is no longer if but when your contact center becomes IP-enabled. The technology has come of age and at the right time. IP at last frees contact center operational and performance data from the musty back office phone rooms to readily reach the C-suite inhabitants' laptops, enabling them to make better decisions.

"IP telephony is not so much a technology but as a great enabler of a transformation of the contact center to the heart of the enterprises' business processes," says Frost's Dawson. "IP, by treating voice as data, makes the value-rich information gathered by contact centers easily accessible to every business facet such as HR and marketing. These departments can quickly gather data on customer behavior, operations, and employee performance by tapping into the pipe rather than wading through ACD reports and recordings."

Supplying vital information that demonstrates net worth to enterprises can make the difference, especially in these challenges times, between budget cuts resulting in reduced contact center services and stable or more investment that maintain and enhance customer interaction quality.

IP Benefits

There are many bottom-line benefits to IP telephony. One of them is reduced long-distance charges, which, while diminished in the face of lower PSTN rates and IP bandwidth metering, can lower costs especially for calls rerouted to home-based agents and to other locations.

Another advantage IP provides is reduced facilities and IT expenses through less wiring and no need for separate phone rooms: calls are increasingly handled via integrated, centralized and often off-site data centers. That also means faster, easier, and less costly expansion. New contact centers can be up and running in weeks, with no more sometimes lengthy waits for the telcos to install the lines.

Yet more enterprises are discovering that IP can deliver other and more powerful operational and productivity benefits.

Tim Passios, Director of Product Management, Interactive Intelligence has seen his customers select new IP or migrate existing TDM switches to it for contact center virtualization, including supporting home agents and branch offices.

His firm has at least two financial services customers who use the Interactive Intelligence IP-enabled switches to route calls to idle branch staff.

Customers have also cited improved disaster response capabilities. They can attach IP voice servers to data centers rather than relying on the telcos to maintain service during emergencies.

"For our customers the cost savings are the least important of the reasons why they want IP in the contact centers," reports Passios.

The home agent benefit is increasing in importance as gas prices climb and show no sign of dropping to any great degree, points out Nortel's Lutz.

Contact center agents, who are low-income earners, are being squeezed to the point where one paycheck every month now goes to gas. That creates pressure on managers to give their staff raises or risk losing them to other, even lower-paid employers located closer to their homes.

"With IP permitting site independence, agents can sign in from other communities, which allows them to stay employed by the same contact centers," explains Lutz. "Contact centers can also recruit agents from anywhere to replace those lost."

The same freedom also applies to agents and supervisors who are off premises, such as for training. They can check their systems such as for calls or emails from customers that they are handling issues or sales for, and to monitor centers' performance, adjust schedules, and run reports.

"You could do this with TDM but it would require a lot of customization and the solution would not be as elegant," explains Lutz.

IP also permits easier and less expensive multisite call handling, especially when meshing in other centers obtained through a merger or acquisition. There is no more need for multiple switches and/or for middleware to connect them to ensure seamless performance.

The IP technology makes setting up blended agent environments, where typically inbound agents make outbound calls during slack periods, much easier. For example software-based dialers only became generally feasible with IP-enabled switching.

"With a unified, software-oriented approach, a contact center can have a very small number of outbound agents (or blended agents), which enables even smaller contact centers to utilize outbound without having to invest in specialized hardware, "explains Ross Daniels, Manager, Product Marketing for Cisco's Customer Contact Business Unit.

Call escalations, especially support calls to outside experts at regional or head offices or who are mobile or at home are easier to set up and have greater functionality with IP, provided it is coupled with unified communications.

"In a TDM world, escalating a call from the contact center to an expert in the enterprise means nothing more than a transfer, "points out Daniels. "Once that call is transferred out of the contact center, all visibility to that call is lost. You don't know if the call went to a person, to voicemail, or anything else. No reporting capability on those calls.

"With unified communications via IP you now have presence information on experts; you know if an expert is available for escalation, rather than transferring calls blindly. You also have continued visibility to the call after the transfer plus better reporting and compliance."

Drew Kraus, vice president, research, Gartner reports that IP provides a stronger ability to integrate multiple contact channels i.e., voice, e-mail, chat, SMS, and video and to mesh with enterprise applications such as CRM and ERP than TDM. These capabilities permit quicker and a more seamless customer experiences that could increase satisfaction, retention, and revenues.

IP also makes moves, additions, and changes to meet such changing demands much easier to accomplish.

"The ability to move or add agent phone sets that used to require system reconfigurations and trips to the wiring closet can now be accomplished simply by plugging them into the existing IP network," explains Kraus, "which can be very helpful in larger and more dynamic contact centers."

IP Challenges

There are still challenges entailed when going to IP telephony. Aspect's Kilgo points out that many data networks are not set up to meet to meet the more exacting quality requirements of voice applications. Also the IT staff may not be trained to support it.

Aspect recommends to customers that want to add or switch to IP that they let the supplier analyze their entire network and/or evaluate the possibility of moving to a hybrid TDM-IP environment.

"If I sent you an e-mail and the network delays it by three seconds you would never notice it," says Kilgo. "But if you are talking and you had a three-second delay, you would wonder if you were disconnected. If it happens often for contact centers it becomes a customer satisfaction issue."

While IP is generally less expensive than PSTN/TDM there may be cases where this is not the case.

"You have to nail down the cost of transport before going ahead with IP because for some geographies, bandwidth requirements, and call volumes because in some instances you may need to stick with a TDM connection," advises Kilgo.

Service continuity is, however, more important than voice quality, which IP lags compared with PSTN/TDM, yet as long as both parties can understand each other that's all what matters.

"Customers are now used to using mobile phones, which means that their quality expectations are lowered," explains Lutz. "If they had a bad connection, short of cutting in and out, they often assume it is their cellphones."

There may be still issues with outbound IP, such with progress analysis, which is the process of detecting pre-connect information about failed outbound attempts and the destination party's media type for connected outbound calls. There are also reports that IP SIP protocols are not yet up to same speed as TDM in transferring information. Suppliers are looking into these matters and given the success that they have making IP mainstream on the inbound side then expect to have them resolved as well.

In the meantime many firms are going with hybrid IP-TDM switches. Or they are experimenting with IP-based unified solutions to manage outbound and inbound calls, with the option of moving to an IP infrastructure, leveraging existing TDM investments, or a hybrid IP-TDM environment. Kilgo mentioned one Aspect customer, the Atlanta Journal Constitution (AJC), which has seen increased sales thanks to blending outbound and inbound calls.

"Since the solution the AJC is using is SIP-based, the newspaper can easily make the move to IP or just continue using traditional telephony, as its business needs dictate," says Kilgo.

Deciding on IP

Before deciding to add IP or switch to it, take a hard look at what its total costs as well as its benefits to determine ROI. Be clear what you want accomplished and how IP will get you there, and in what form. There are many options including new switches, hybrid solutions, replacing cards on existing units, adding IP gateways to TDM ACDs, and using hosted software as a service (see the April 2008 issue of Customer Interaction Solutions: "The Power of SaaS: VoIP Call Centers For A Fraction Of The Cost").

IP-enabled routing is still a large investment. There is also a lead time that can take several months from approval to cutover. You may also have to beef up your data network and bolster your IT support capabilities to provide high quality of service.

Prices are highly dependent on required features. Cisco's contact center software starts at $395 per agent for Unified Contact Center and can go as high as around $2,000 per agent for advanced functionality that might be required by enterprise contact centers. Siemens' OpenScape Voice SIP-based solution with an included SIP based softphone starts at about $33,000 list, for 100 seats. An optional full unified communications application can cost around $400 per seat.

Yet you may have many years and dollar value of useful life on your existing switches that may be greater than the benefits of conversion to IP. Paul Demopoulos, Siemens senior marketing manager, applications products, points out that it is not unusual for TDM/PSTN-based switches to remain is service for more than 15 years.

"To make the migration you need a clear tipping point in favor of IP, "says Demopoulos. "For example it might not make sense to migrate completely to IP if you had a large center and wanted to support three or four agents working from home. Yet if you had 25 to 30 percent of your workforce at remote sites then going to IP might be justifiable."

Frost's Dawson adds that many switches built and installed in the late 1990s had software written to open standards and are CTI-capable. These capabilities give them greater functionality and can be more easily updated than older hardware. On the other hand, replacement cycles are often more dependent on writedowns, rather than on obsolescence.

"Therefore while your switch may still function well but if it is on its last year bookwise then you may want to look at changing to IP if it has advantages for you," he points out.

Contact Center IP Best Practices

Once you have created the case for having IP for new centers or to literally make the switch for existing ones there are several vital steps to take to make these installations successful.

Examine your present or potential new switch supplier's products, including the other applications they support such as call recording, workforce management and whether you're comfortable with them.

Get IT buy-in early on. Explain the benefits of IP to them and develop implementation plans. Analyze network capabilities and make upgrades if necessary to ensure adequate bandwidth, reliability, and quality of service.

"IT must be fully committed to ensure ROI," Dawson points out. "If not then while you may have the switch on the box for IP they may never turn it on."

Develop a doable migration strategy for TDM-to-IP conversions. Make sure you provide enough lead time to iron out any bugs before going live, and that you have backup switches or servers to handle the volume during cut-in.

If your solution is to switch out cards and update applications on your existing servers ensure that the new hardware and software is tightly integrated with the other components and thoroughly test them before going live. Contact and stay in touch with your vendors as they know the solutions inside and out and are there to support you each step of the way.

If your choice is to go to another supplier undertake due diligence to see that their solutions meet your needs and if so examine the need for and implement software integration plans. This way the IP voice solution seamlessly meshes with your data, monitoring, recording, workforce management and other related applications such as predictive and preview dialing. IT architectural approaches vary widely.

"Look for solutions based on a single, converged applications platform, not just a converged network to ensure ease of deployment and management," recommends Interactive Intelligence's Passios. "Also ensure open standards go beyond a few proprietary extensions for maximum customization and interoperability.

"The right IP telephony solution gives contact centers the opportunity to transition from a cost center to a profit center, while playing an even greater role in retaining valuable customers — a key issue in today's tight economy."

Lastly, avoid simply recreating your existing TDM capabilities and processes and instead fully explore the enhanced customer service and sales that IP can provide.

"That way you will provide the ROI expected from C-level executives that will, in turn, increase your ability to obtain funding for additional investments later on," says Gartner's Kraus.

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