Passing The Buck To IP Billing
BY ALAN GOLD
Companies that make the move to IP telephony can find tremendous
efficiencies and are able to exploit new telephony services. As part of the
process, mature, sophisticated, and accurate Private Branch Exchange (PBX)
call tracking and accounting systems must also be transitioned. Over the
years, add-on technologies have been developed for PBXs that do a good job
of collecting and reporting both intra-company and carrier call data.
Consequently, related business decisions must be made when moving to IP
There are essentially three approaches to managing corporate telephony
systems: do nothing ï¿½ stay with the existing PBX and call management
systems; execute a hard cutover to VoIP; or, the most practical approach,
adopt a hybrid strategy where the PBX systems are gradually replaced by IP
telephony systems on a department, building, or campus basis. The last
approach is the most logical from a business standpoint but it also presents
the greatest challenges from a call management standpoint.
MOVING COST TRACKING TO VoIP
PBX manufacturers have long provided for the collection of call record
information and voice IP system providers have implemented similar services
in their equipment. Both PBXs and IP telephony servers collect call records
for line-level billing so that the data can be used to generate detailed
call costing and allocation reports. There are, however, some differences in
the level of detail provided, and the telephony management services
included, in VoIP systems. In some cases, third-party providers bridge the
gap with specialized products.
The PBX does not typically have any resident call record memory so the
data is usually sent via a serial data port in a proprietary format to be
stored in an external memory device, a so-called serial buffer box. The
buffer box makes the data available to a call management system. The VoIP
switch accomplishes the same data collection function internally. It saves
call records to an internal database where it is available for access by the
call management system in a standards-based format, such as Structured Query
If an organization jumps directly from PBX to VoIP, the call reporting,
accounting and management system transition can be relatively simple. The
new communications management system is specified with the new VoIP system
and, when the changeover is made, the management system takes over. The
server collects call record data and the communications management system
queries the database using one of a number of standard protocols, such as
File Transfer Protocol (FTP) or Extensible Markup Language (XML).
In a hybrid environment, however, two or more call collection systems
must coexist ï¿½ the traditional environment and the IP system. If the
installed PBX systems have proprietary, totally integrated or inflexible
call management systems, administrators face the challenge of cobbling
together data collected in disparate formats so it can be rolled up and
analyzed for reporting to enterprise General Ledger (GL) systems and other
The most logical and efficient approach is to implement a single,
independent call management system that takes the call record data
regardless of the source ï¿½ a system that can tap both the PBX buffer boxes
and access the server databases to present a single, consolidated view of
calling activity. This provides a single location where the organizationï¿½s
call records can be collected and reconciled with public switched telephone
network (PSTN) charges.
In this way, the location, department, cost center, and other corporate
units for telephony costs can be efficiently and accurately allocated and
reported across the organization. Another advantage is that, as the
transition progresses, the call management system is already in place as
PBXs are eliminated and new IP systems come on line. Departments or other
unitsï¿½ call reporting continues to be collected in the same way, even though
the data source transitions from the PBX to the IP telephony system.
INTRA-COMPANY COST CONSIDERATIONS
When making the transition to VoIP, internal call reporting and
allocation must also be considered. It is true that leased lines between
corporate facilities can be eliminated but that does not mean that
intra-company telephony costs drop to zero. There are wide-area network
(WAN) utilization costs for Internet access, T1-carrier and asynchronous
transfer mode (ATM) transmission technologies that must be allocated either
on an overhead or on a usage basis.
If usage is selected, a rate table, similar to the rate tables commonly
used with PBX systems, can be established for intra-company calls. It can be
as simple as a flat rate per call/minute or be more sophisticated in that it
applies variable rates based on call parameters, such as whether the call is
made to another campus or to a foreign office. At the extreme, rate tables
can be constructed to factor in bandwidth usage in order to charge a higher
rate for calls placed during peak periods.
RETHINKING CALL MANAGEMENT
Transitioning to a VoIP system also presents network managers with an
opportunity to reconsider and enhance their approach to call reporting and
call management. Traditionally, call management has been accomplished
through a software package that collects the data from the PBX. The system
is resident onsite and comes under the auspices of the telephony system
managers. Telephony help desk operations, moves, adds and changes (MACs),
infrastructure design and maintenance, and system planning are collectively
managed as a distinct telephony function.
Since the resources are onsite, the function requires computing power,
space, and support resources for maintenance, upgrades, security, and other
services. For many companies with trained staff this is an effective
approach. For these companies, moving to an in-house communications
management system that is capable of supporting both PBXs and IP telephony
systems is the logical step.
For an increasing number of companies, however, a hosted approach is an
excellent option. With tight capital budgets and long approval cycles, the
customer may decide that purchasing additional hardware, managing software
upgrades, and investing in staff training to support the call management
system does not make sense. In this case, an outside company can host the
software on its systems. With an Internet connection, the customer can check
for voice and data reports, track service orders and trouble tickets and
view updated directory information ï¿½ the customer can manage the telephony
system with reduced complexity and expense.
The third approach is to fully outsource the management of the
communications systems. As companies continue to focus on investing in their
core competencies, many have realized that the daily management of their
communication environment may be outside of their strategic business
direction. A completely managed service approach enables a company to spend
more time on business issues as the service providerï¿½s expert staff takes
over every task associated with managing the communications systems. All of
the management functions are supported by the services provider, as well as
the help desk, provisioning, and planning functions. Under this approach, as
new VoIP systems are added and PBXs retired, the service provider handles
the transitions. So, the call management changes are transparent to both
users and in-house technical staff.
BUILDING A BASELINE
There has been a lot written about analyzing current telephony systems in
order to plan for an orderly transition to VoIP. Every technology decision
fosters multiple business decisions. With the transition to IP telephony
there are thousands of decisions to be made from infrastructure to training.
One technology/business decision point that has been difficult to
quantify is determining what effect the addition of voice will have on the
data communication network. Sure, there are consultants who will analyze and
project results, but now a set of technologies is emerging that offers a
linear comparison between traditional voice traffic and VoIP data loads.
These new technologies use existing call management systems to create
detailed traffic reports of your telephony usage to plot call volume/time
not only on an aggregate basis but also on a point-to-point basis so that
you can determine what the traffic is at different points on the network.
The technology then translates the call volume into data network traffic
When overlaid on existing data network traffic patterns, administrators
can not only predict but actually see the network load that voice traffic
will put on the system. This gives them the information they need to upgrade
the IP network accordingly.
This approach has the potential to save companies that are planning a
transition tremendous consulting time and money. It gives managers a higher
level of confidence in the quality of their network usage projections and
avoids under provisioning, which will lead to performance problems, and
over-provisioning, which can be costly.
THE IP BILLING BUCK
The challenge for IP telephony managers is to institute good
communications management practices and technologies from the outset. There
are computer-based systems, hosted solutions and outsourced services that
can help companies monitor and manage the billing functions of their IP
telephony systems. These systems deliver the same or better level of insight
and control as traditional switched gear systems.
Effective communications management will better handle multi-device
environments where employees seamlessly move between mobile and office
communications. It will support ubiquitous communications through a single
phone number. It also will position companies to take advantage of the
inevitable evolution towards multi-function devices that blur the lines
between telephony and data communications. c
Alan E. Gold is senior vice president of corporate strategy for Avotus
Corporation. He has over 20 years of experience in product management and
strategic direction, including corporate partnerships and venture capital.
He has authored numerous software and data collection articles and presented
to industry forums.
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