The Business Case for VoIP

The Business Case for VoIPMay 17, 2005

Bill Karras, Sierra Systems Andy Holik, MTS

Type tag line or just Sierra SystemsSierra Systems

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Agenda Define terms Business Case for VoIP (10 Min) MoIP Demo (10 Min) MoIP Business Case (20 Min) XoIP (10 Min) Questions (10 Min)


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What is VoIP? Definitions: PSTN - Public Switched Telephone Network (circuit switched) PBX – Private Branch Exchange. A subscriber-owned

telecommunications exchange that usually includes access to the PSTN. (Commonly referred to as Customer Premise Equipment or CPE).

Centrex – A service that is similar to customer-premise PBX, but provided by means of equipment located in a telecommunications carrier site.

MoIP Demo XoIPMoIPBusiness Case QuestionsBusiness Case

for VoIPDefine Terms


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XoIP is any application or content over any access to any device. Includes MoIP plus video streaming (TV), and application services. Access can be wireline, wireless, satellite or cellular. Devices can be cell phones, handhelds, laptops, desktops, servers etc.

Relative Domains of the Technology

VoIP

MoIPXoIP

MoIP Demo XoIPMoIPBusiness Case QuestionsDefine Terms

Voice over Internet Protocol. Any technology providing voice telephony services over Internet Protocol (packet switched)

Multimedia over Internet Protocol. Includes voice, video conferencing, presence, collaboration tools, and instant messaging

Business Casefor VoIP


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Does VoIP = Cost Savings

Moves, Adds, Changes Save

$50-$100 per move?

MoIP Demo XoIPMoIPBusiness Case QuestionsDefine Terms Business Case

for VoIP

VoIP TCO > Legacy TCO

Telephone linesavings?

15 minutes per desk,per day, every day,every month

Sets cost over $300

Long Distance savings? $15/month per line?

VoIP Business Case

Business Case for VoIP

MoIPBusiness Case


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VoIP Total Cost of Ownership Sample Business Case over 5 years

Environment Centrex PBX IP Centrex IP PBXNumber of Desks / People 120 120 120 120Non-PBX Box related costs Rate Useage 31.00$

Set-up - Programming 5,000.00$ 0.69$

PSTN 27.50$ 0.25 6.88$ 6.88$

Numbers 2.50$ 1 2.50$ 2.50$

QoS 0n Customer LAN 15,000.00$ 2.08$ 2.08$

ISP QoS 145.00$ 1.21$ 1.21$

LAN Audit 2,000.00$ 0.28$ 0.28$

IP Centrex Voice 22.00$ 1 22.00$

Voicemail 9.00$ 9.00$

IP Access - Monthly 1,200.00$ 0.2 2.00$ 2.00$

Annual VoIP Training 5,000.00$ 3.47$ 3.47$

LAN Upgrade Costs for VoIP 20,000.00$ 2.78$ 2.78$

Monthly Lond Distance (Intra-company) 1,000.00$ 8.33$ 8.33$

Moves, Adds, Changes (2/year/line) 75.00$ 12.50$ 12.50$

Incremental Network Security 5,000.00$ 0.69$ 0.69$

PBX Box related costs

Hardware 25,000.00$ One time 3.47$ 3.47$

Voicemail 5,000.00$ 0.69$ 0.69$

PBX Training 3,000.00$ Annual 2.08$ 2.08$

Install / Configure 25,000.00$ One time 3.47$ 3.47$

Warranty / Support/yr 10% H/W S/W 0.28$ 0.28$

Licence / Upgrades/year 1,000.00$ Annual 0.69$ 0.69$

Human / Admin/yr 45,000.00$ 10% 3.13$ 3.13$

Insurance - Monthly 400.00$ 3.33$ 3.33$

Annual Hardware Maintenance 2,000.00$ 1.39$ 1.39$

Real / Estate 120.00$ 1.00$ 1.00$

Interest - Time value of money 4,000.00$ 8% 2.78$ 2.78$

Depreciation - Annual 17,200.00$ 20% CCA 6.94$ 11.94$

Sets Premium ($300 per set) 36,000.00$ 5.00$ 5.00$

Total Monthly Cost per Desk over 5 years $51.83 59.47$ 49.21$ 61.15$


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After years of availability VoIP penetration is extremely low. (~12% businesses (IT Facts Dec 2004))


for VoIP

North America has the highest quality, lowest cost traditional telephony infrastructure in the world. Voice simply works.

There Is No Business Case For VoIP!

MoIPBusiness Case



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What’s beyond VoIP

Improve productivity.Reduce time and effort

required fordecision making


for VoIP

If I’m not saving money, why would I do this?

DisasterContinuity

Other areas tosave money

Travel Real Estate (telework)

Improve collaboration Improve quality and

speed of communication

Geographic agnosticism


MoIPBusiness Case


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What is MoIP? 10 Min Demo/Recording


Collaboration Options– Instant Message, Send File,

Share

Connection Options– Conference, Hold, Mute etc.

Instant Message Area– Text, Files, Presence

Composition Area



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Blackberry’s can integrate telephone, scheduling, email

Net Meeting can be used for video conferencing, instant Messaging

WAP Browsers can be used to view the Web


MoIP brings Integration, Coherence and Security


How’s MoIP Different?


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MoIP can enable geographic expansion, tele-work, work-at-home, reduce travel costs, integrate with contact Centre applications

The key is to determine your Business needs and drivers first

Then match the MoIP features to meet those needs.


Make the decision on 100% of the business

2% 5%

93%

IT Infrastructure

IT Non-Infrastructure

Non IT

TypicalOrganizationalBudget


The Business Case for MoIP is based on enabling business strategies


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Multimedia Productivity Benefits


2% 5%

93%



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MoIP Business Case - over 5 yearsEnvironment Centrex PBX IP Centrex IP PBX

Number of Desks / People 120 120 120 120

Total Cost/Desk (51.83)$ (59.47)$ (49.21)$ (61.15)$

Salary Savings Impact Probability

Non-IT ValueTelecommuter Productivity $45,000.00 13% 6 48% 24.38 24.38

Remote Office Productivity $60,000.00 11% 12 49% 55.00 55.00Less Telephone Tag (3.9 hrs/week 80% of emps) $60,000.00 10% 96 50% 400.00 400.00Easier Moves Adds Changes Allows MoreEmployeeMobility

IT ValueReduced IT Staff Travel $45,000.00 8% 8 45% 20.00 20.00Reduced Support Time withIntuitive Features $45,000.00 15% 1 45% 4.69 4.69

Reduced Office Opening Costs 8

Faster Moves, Adds, Changes $45,000.00 9% 1 72% 2.81 2.81

Total Savings/Desk 0.00 0.00 506.88 506.88

5 Year Business Case Cost (000's) (373)$ (428)$ (354)$ (440)$ 5 Year Business Case Savings (000's) -$ -$ 3,650$ 3,650$ 5 Year Business Case Value (000's) (373)$ (428)$ 3,295$ 3,209$


for VoIP


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Measure! The results can be evaluated through trials or pilots. It’s difficult to predict what features will be used and where the benefit is.

MoIP can enable benefits across the entire business, not just the 7% technology infrastructure.

The tangible goals and objectives are specific to the business. There’s no magic bullet.

Manage Risk. There are low risk ways to migrate. Keep options open. Prove each saving before you invest.


for VoIP

There Is A Business Case For MoIP

What is your business?

Who does what? Don’t let the tail

wag the dog!


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City of Winnipeg TrialFeatures desired Customers listed the following as desirable productivity

enhancing features:– Streaming audio/video– Collaboration capabilities (application sharing)– Call logging capabilities– Plug ‘n play– Multi-party conferencing / audio and video


for VoIP


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City of Winnipeg Trial

High usage Medium usage Low usage

Call Logging Presence & availability

Collaboration

Plug ‘n Play Instant Messaging Multi-party Conferencing

Call Routing Video camera Web Push & Pull


Features used



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Features conclusion Feature usage is based on location, as well as working

and communication habits and requirements :– project teams– remote requirements– reporting structure– physical proximity

City of Winnipeg Trial


for VoIP


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What is the future?

XoIP – Any application or content over any access to any device. Includes MoIP plus video streaming (TV), and application services. Access can be wireline, wireless, satellite or cellular. Devices can be cell phones, handhelds, laptops, desktops, servers etc.

– Optimization of assets. Buy one thing for many uses– Continuity across platforms. Don’t need to worry about

disconnecting and using another device.


for VoIP

The Future is XoIP


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for VoIP

Business Case for MoIP

Non-IT cost savings can be found but usually do not sustain the business case.

Productivity improvements can represent a significant positive contribution to the business case if you:

IT cost savings are not supportable

Know your business Measure the results Manage the risk


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Questions?


for VoIP

The Business Case for VoIP

Documents

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