Convergence streamlines IT costs

Converged voice and data networks result in reduced operating costs, including the costs associated with network support staff, according to delegates at IDC’s Enterprise IP Convergence conference in Sydney last week.

The conference included a panel session – chaired by Avaya CTO James Haensly – and representatives from three companies who have implemented converged networks – ICT, a technology services provider; Inchcape, a car distributor; and Novell Asia Pacific.

ICT managing director Michelle Tomkins said the key benefits of IP telephony were the savings associated with cost and consolidation, which she described as compelling.

“We have reduced telephone costs by some 30 to 40 per cent and have increased productivity by consolidating resources,” Tomkins said. “With a converged network we can support remote centres and quickly deploy applications.”

Inchcape IS manager David Starr IP telephony benefited centralised management.

“With IP telelphony we can now manage phones and other applications centrally,” Starr said. “We used to have four people in network management, now we only have two and a half. With IP phones, people movement is easy as everything is done centrally.”

When asked about future cost savings, Starr made no secret of the IT redundancies.

“Convergence saves costs in people as we used to have two people administering our telephone network and two people administering our data network. We projected an initial ROI of five years but shortened that to four due to bandwidth increasing by only 35 per cent due to calls.”

Novell Asia-Pacific technical systems manager Paul Voulas, who oversaw the company’s transition from separate networks, also reduced management costs with IP telephony

“Asia Pacific was the first Novell region to deploy VoIP and we have reduced mobile and long-distance toll charges,” Voulas said. “Novell works on 12-month ROIs and this project will pay itself off in less than 12 months. Now we only have one telephony person in the whole of the Asia-Pacific region.”

Inchcape’s Starr said the entry cost of IP telephony is viable if you have enough people to take advantage of the technology.

“IP telephony can be prohibitive if you have a low number of people in your branch offices,” he said. “We have found that you need at least 24 people for a $30,000 IP network to be viable. There is also new equipment coming on to the market which will reduce the up-front cost.”

Although all three panellists are satisfied with the results of their converged networks, they did offer advice on what to consider before investing.

“Don’t rush IP telephony as it is a steep learning curve and will involve training people,” Starr said. “Also, you need to realise the risks. WANs don’t always stay up and it will fall over so you will need redundant links.”

Novell’s Voulas said the company had not considered the complexity of the network.

“Once we got the network design right everything went well,” Voulas said.

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