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Johanne Torres[August 16, 2004]

Experts to Schwarzenegger: Switch to VoIP


Switching to VoIP will save you money.  That was among the recommendations given to California�s state governor, honorable Arnold Schwarzenegger last week, during the state of the state meeting. A full written report prepared by an assembly of independent auditors and IT experts advices the head of state to adopt VoIP-based telecommunications�both voice and video statewide in order to slash government telephonic spending. 

A five-month project�The Report of the California Performance Review: Government for the People for a Change contains four volumes of recommendations to reform and revitalize the state government. Within its Information Technology section, the report discusses the financial benefits of switching state government agencies from traditional telephone to VoIP-based communications. 

Changing Voice  

When speaking numbers, the advantages were presented favorably for Voice over IP (VoIP) (define - news - alert). According to the report, California State agencies spend more than $120 million annually conducting business activities via the telephone. A conclusive survey of state departments revealed that each telephone line costs about $80 monthly on average. Experts contend that replacing the various systems now used with VoIP technology under a statewide network infrastructure would be cost efficient, simplify use and provide a uniform telecommunication service to transact day-to-day state business.  

The switchover is said to have potential of saving the state a 15 to 20 percent approximate recovery from billing errors in audit savings; and a 15 to 20 percent of additional savings generated by maximizing the use of discount rate plans, network optimization and more efficient use of technologies in optimization savings. According to the report, cost savings per user is projected at around $10 to $40 per line converted monthly. The reviewers concluded that if lets say, one-half of the phone lines are converted to VoIP, the state could possibly save between $1.6 million and $6.3 million per month.  

How much would the switchover cost California? The experts revealed an estimated one time cost of $6.5 million for VoIP installation in the year of conversion, if existing staff performs such conversion. 

Changing Videoconferencing 

The report discussed possible savings for the state if it switches to video over IP for conferences, distance learning and training, as well as any other forms of video communications. According to the report, California now uses a combination of �Internet protocol (IP) video,� integrated services digital network, (ISDN) and point-to-point systems for video conference services statewide. The experts recommended IP video services to be provided statewide from a centralized management IP video services location, such as a statewide data center; and an IP video network providing various options for videoconferencing to off-site meetings and for other services.  

The experts presented a case study about the state�s Department of Corrections Health Care Services Division video conferencing usage and savings since 1998. They have made more than 400 conference calls over IP with savings of more than $700,000 so far, and a total of $4.5 million for telecommunications during the Fiscal Year 2002� 2003.

The report recommends the implementation of IP video for specific savings in telecommunications used by the state of California�s Department of Corrections and its telemedicine program. Savings by using IP video during the 2002�2003 fiscal year for the department totaled $4.5 million, avoiding the transport of inmates to medical facilities for services. With total implementation, this figure could rise to an extra million dollars in savings.


Johanne Torres is the Assistant Editor for TMCnet.com and Internet Telephony magazine. Previously, she was the Assistant Editor for EContent magazine in Connecticut. She can be reached by e-mail at [email protected]


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