May 2003

Wireless VoIP Products -- A Business Justification

BY RICH WATSON

The dynamics driving wireless voice over IP (VoIP) are the two underlying technologies: 802.11 wireless and VoIP telephony. The industry pundits are now claiming a 72 percent annual rise in adoption of 802.11 wireless in the business sector and an equal 70+ percent rise in VoIP adoption. This �two-tornado� condition readies the market for the �twinned� wireless voice solution. While there are not many 802.11 VoIP solutions on the market today, the expansion of this market segment is expected to bring on a storm of wireless VoIP solutions. This is in spite of the fact that in today�s conservative economic environment, enterprise purchases are more critically studied and evaluated as to their ultimate benefit and impact. This article attempts to explore some of the dynamics and issues that effect a wireless VoIP �buy� decision including factors like installation cost, productivity gains, operational improvements, and total-cost-of-ownership.

ADOPTING VoIP

Perhaps the seminal driving factor for VoIP has been the lure for �free� long-distance phone calls. The concept of bypassing the PSTN and routing calls through the Internet to significantly lower long-distance call charges has a strong appeal to corporate CFOs. Even managing to lower charges between corporate locations can be a significant factor in controlling operational costs. Wireless VoIP vendors typically have no direct contribution in this decision, but can offer a cooperative solution to the overall corporate VoIP strategy. Deployment of a wireless VoIP solution only complements a hardwired VoIP installation and can also take advantage of any �toll bypass� architecture that might be deployed. However, not making a hardwired VoIP decision does not necessarily preclude a wireless VoIP decision.

WIRELESS VoIP

If toll bypass doesn�t drive a wireless VoIP decision, then what does? Two other major considerations may tend to drive a wireless VoIP decision -- total cost of ownership (TCO) and workgroup mobility requirements.

Consideration of TCO applies to both hardwired and wireless VoIP products, but benefits are more strongly seen with the wireless solution. Telephony industry norms project that MAC (moves, adds, and changes) operations for phone extensions cost around $300 per incident. These are costs incurred above and beyond the cost of the device and cost of deploying the infrastructure. Because of its inherent �mobility,� a wireless solution eliminates any move operations and minimizes any adds or changes. Thus, over time a mobile telephony solution can have a tremendous impact on the realized TCO. This realized TCO reduction could be further maximized where system management is performed wirelessly. TCO alone, however, is not sufficient to drive a wireless VoIP decision. The final business consideration is typically focused on a �mobility� requirement.

If an employee�s job requires access to a telephony service and requires them to be mobile, then a wireless VoIP solution is a must. Nationally, it is claimed that some 65 percent of all business phone calls end up in voice mail. Maintaining contact with customers and vendors via �telephone tag� is most inefficient; costing time, money, and potentially, lost revenue opportunities. A wireless VoIP device goes a long way to addressing this problem and maximizing productivity.

But how can you justify a wireless VoIP solution? Can�t I just install a cordless phone? Aren�t there other options? Where�s the positive return on investment (ROI)? The following briefly outlines some major considerations impacting a wireless VoIP solution buy decision.

HARD ROI

A �hard� ROI (something that can be clearly shown in a ledger sheet) may provide the simplest rationale for implementing a wireless VoIP solution. Some companies, because of their mobility requirement, currently meet this need with cellular phone subscriptions. Like a personal cell phone, this solution has an operational cost associated with the annual service contracts. A wireless VoIP solution is a one-time purchase with no associated service contract, so replacing cell phones with wireless VoIP phones, can easily demonstrate a real ROI in a relatively short period of time.

Strong �hard� ROI positions can also be realized if a wireless solution is considered in the early stages of new construction. Not having to require installation of extended telephony connections can result in a significant savings in construction costs. This savings is compounded when you use the wireless infrastructure for both voice and data.

In some business a �hard� ROI can be determined merely by looking at the historic MAC activity. Minimizing or eliminating the MAC overhead can have a direct and positive impact on the ledger sheet.

SOFT ROI

�Soft� ROI analysis is more or less subjective but can have more far-reaching economic impact than a �hard� ROI analysis. The big gain with a wireless VoIP solution is increased productivity. Because key associates can now be reached while away from their desks, critical decisions can be made sooner, customer inquiries can be addressed quicker and �voice mail� time is virtually eliminated. Table 1 details a hypothetical scenario where a company has 10 mobile employees that miss only four calls per day.

This simple example easily demonstrates a productivity improvement that would more than pay for any installation of a wireless VoIP solution in one year. Assuming that the spare time realized through the use of the wireless VoIP phone was used for other productive tasks, the system would quickly pay for itself. Additionally, more subtle savings may be realized if the returned calls had to be long-distance calls to customers or vendors. Larger companies with higher rates of missed calls will show even quicker break-even on a soft ROI calculation.

Other benefits that are hard to quantify, but very much real, are preventing potentially lost sales through quick response, lower staffing levels because of lower TCO and a better safety record because of quicker response to incidents.

A MARKET REQUIREMENT

With some industries or market segments, there is little justification necessary for deploying a wireless VoIP solution because that�s the only option that meets the industry requirements. For example, in the healthcare field, a number of vendors supply a vertical market application called: �Nurse Call.� This application relies on mobile telephony devices to summon nurses to respond to a patient�s alerts through direct communication with the patient. The mobile telephony solution must be integrated into the hospital PBX and accessible as a network device for the ancillary nurse call application operations. Given that there is a well-documented shortage of nurses in most areas of North America, any solution that maximizes productivity will be eagerly welcomed.

SUMMARY

Whether or not a company has decided to deploy VoIP as a corporate telephony strategy, wireless VoIP can still play a strong, well-justified part with a positive impact on the bottom line and significantly enhance employee productivity. There is, however, one consideration regarding deploying a wireless LAN (WLAN) in an enterprise that will impact if and how well a wireless VoIP solution can be supported: Security. We will discuss the concerns and remedies regarding wireless LAN security and how they impact voice in a future article.

Richard Watson is director of telephony product marketing for Symbol Technologies� Wireless Systems Division in San Jose, CA. Prior to taking on the marketing role for Symbol�s NetVision family of WiFi Telephony products, he managed the software engineering team for three years and was responsible for developing Symbol�s WiFi Telephony products.

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