When the U.S. Department of Commerce needed a way to expand the agency’s internal communications at a low cost, its chief information officer began a competitive selection process that eventually led him to Cisco Systems, an international technology network provider. What newfangled telecommunications system did Cisco implement to serve 10,000 employees?

The new phone system was innovative, but it wasn’t complicated; Cisco implemented Voice over Internet Protocol (VOIP), which allows users to reroute their phone calls over the Internet.

In the business sector, VOIP makes most sense for companies that have more than one location and are prone to racking up high long-distance bills. Because many of these companies already pay for the Internet, VOIP can literally eliminate long-distance costs, says Steve Epner, president of BSW Consulting, St. Louis, and a familiar face in the distributor-technology industry. “You still have to pay for the Internet, but distributors can avoid the high cost of long-distance bills.”

VOIP is already catching on with tech-savvy consumers, and it won’t be long until the business sector sees its benefits as well, Epner adds. “The quality has really been upgraded, even in the past couple of years. Businesses were wary because the communication used to be transmitted by bouncing signals off satellites. There was a lag, and it made communication more difficult. Now, the fiber-optic lines can carry VOIP without much difficulty.”

VOIP takes analog signals from one speaker, and translates those signals into digital form. It then sends the digital signal to the person receiving the phone call, just like sending an e-mail. On the receiver’s end, the digital signals are converted back into analog, and the caller’s voice is clearly heard.

“Every time you have an IP (Internet Protocol) connection, you can send video, voice or text. Voice is a specific application that’s very common — just look at all the telephones in existence — so it’s just a matter of converting the voice application to digital,” says Timmy King, chief information officer for Pro-Link and a technology columnist for ISSA Today magazine.

What once required a laborious translation of incompatible signals is now made relatively easy for any small business with a variety of off-the-shelf VOIP software packages.

Although VOIP is becoming more and more common, it does requires certain hardware, including routers, network “cards” and appropriate telephones. The start-up cost of implementing VOIP depends on the types of routers and phones already in place. Generally speaking, start-up costs exceed $1,000 per building. Despite the initial expenditure, analysts believe that VOIP’s improved quality makes it a worthy investment.

“Internet telephony, as it is known, is no longer restricted to adventurous techies,” wrote Adam Bauman in a September issue of The New York Times. “The technology, based on software technology that enables the Internet to route traffic, has matured to the point that voice quality is virtually indistinguishable from that of a conventional phone call.”

The Digital Distributor
For the present time, VOIP isn’t an application that makes sense for every business, says King.

“The problem with VOIP is that — once you have it — you can’t just pick up your phone and call anyone else who has a phone,” he says. “That other person needs to have VOIP, too. It’s like the fax machine. The guy with the first fax machine was stuck; he had no one else to fax documents to.”

VOIP is also very proprietary, King adds. “Just because you have VOIP and I have VOIP doesn’t mean that we can call each other. Some of the systems don’t work very well together.”

The distributors for whom VOIP presents the most tangible advantages, then, are those that are big enough to have multiple locations — especially if they are located in different states. For those companies, VOIP portends substantial internal-calling benefits, says Epner.

“If I’m a 20-location distributor, I can implement this capability for every location,” he says. “Even if I’m in just a few states, it can almost eliminate my long-distance costs. My Chicago office can call the switch in my Kansas City office, and I can do all my internal communicating via our Internet connection.”

JanPak, Davidson, N.C., a multi-regional distributor, saw the benefits of VOIP early on and reconfigured its entire internal phone network to save money more than three years ago.

“We deployed a system in July of 2000,” says David Simmons, director of information technology for JanPak. “The first thing we needed to do was to get a traffic report of all our long-distance calls between our facilities in different states. After we saw how much we were spending on long-distance bills, we had a number to work against, and we started looking at VOIP solutions.”

Most of JanPak’s research was done in 1999. The company found that it was spending more than $500 per month ($6,000 per year)on long-distance calls between JanPak facilities. Compatible telephones were purchased in 1998, so only the voice-module “cards” were necessary. One card ($1,500 each) was necessary for each JanPak location. Simmons found that the company would begin to get a return on investment within two or three years.

“I would say that if a distributor can get a return on investment in less than three years, then VOIP is a wise decision,” he says. “But if you can’t, I wouldn’t advise it.”

With VOIP, each JanPak facility has its own extension number on the phone pad. Whenever an employee wants to call a JanPak colleague in another state, he simply hits the number of that facility first.

“It’s very easy,” says Simmons. “If I’m in North Carolina and I want to call someone at the Florida location, I just hit 5 and that brings me to their building.”

Internal communication benefits are driving many governmental (such as, the Department of Commerce) and institutional networks to invest in VOIP technology. However, long-distance telephone providers are fighting back with secure, dependable, high-quality call plans for business.

“As good as VOIP is becoming, the current phone quality is just great,” says King. “The difference is that the telephone is a dedicated source — it’s doing nothing else, generally speaking. But with VOIP, you’re competing with other signals.”

Waxie Sanitary Supply, San Diego, is another large jan/san distributor that seriously considered switching over to VOIP. In the end, however, the dependability of traditional phone lines was too good to pass up, says Cliff Robbins, information technology director for Waxie.

“We looked into it heavily, especially when we built our new Santa Ana division, but we decided to go with the traditional system,” he says. “Remember the old commercial: You can hear a pin drop? When you have dedicated lines, you can hear the pin drop.”

In addition, Robbins looked over Waxie’s telephone traffic report and found that Waxie wasn’t making enough long-distance phone calls to justify an investment in VOIP.

“In another five years, I think everyone will be going VOIP,” he says. “The initial cost is the roadblock. We’d have to put in new phones and new routers, and it would take too long to get a return on investment.”

The Land-Line Legacy
In the short-term, both King and Epner discourage jan/san distributors (or any other companies) from making binding agreements with long-distance telephone providers. “The technology is going to keep changing very rapidly,” says Epner. “While giving lectures almost a decade ago, I predicted that long-distance costs would come down to around 2 cents per minute, and at that time, they were closer to 30 cents per minute. Now the costs are approaching that figure.”

Soon, says King, before long-distance telephone providers go the way of the dinosaur. “The future is integrating the cable line, the Internet line and the phone line, so that they all function together. The phone line is just too expensive to just do one thing.”

Now is definitely the time for distributors to start investigating their options. “Eventually, everything will be VOIP,” says King. “For right now, it only makes sense for those companies that are located around the country — or even around the world. The value of calling someone on the other side of the globe for a minimal cost is too good to pass up.”

VOIP Resources Abound

If you’re a business owner or IT director who is trying to make sense of Voice over Internet Protocol (VOIP), don’t worry: You’re not alone. Thousands of companies around the United States are investigating all aspects of VOIP. There are many educational organizations whose sole purpose is making VOIP implementation easy for IT directors.

One such organization is the Voice On The Net (VON) Coalition. According to VON’s website its mission is twofold: actively advocate the viewpoint that the I.P. telephony industry should remain as free of government regulations as possible, and to educate its members on regulatory policy issues of business importance. “To facilitate its mission, the VON Coalition will focus on several key points,” says the site. These points are education, recommendations for regulation, and a forum for discussion.

In academic circles, the Massachusetts Institute of Technology (MIT) Internet Telephony Consortium is a widely respected VOIP resource. MIT’s VOIP site offers books, papers, student theses and seminars to help users use VOIP most efficiently, while also helping to predict any problems that might occur along the way. “We bring together academics and industry people from a variety of perspectives to collaborate on difficult problems,” says the site.

The VoIP Calculator website is “an interactive resource for engineers and analysts involved in deploying VoIP,” according to the site. “We believe that the majority of information available on VoIP is either at a conceptual level, or has a commercial bias. It is our mission to bring you a site with free online calculators and technical papers, covering the ‘nuts and bolts’ of Voice over I.P.”

Distributors who are looking for quality information about VOIP, will find it at these websites and others.

— A.R.

ON SITE

Online Ergonomics Resource Guide
Humantech Inc., Ann Arbor, Mich., an ergonomics consulting firm, recently launched an upgrade version of Vendorweb, its online resource to help companies locate vendors for ergonomic equipment and solutions.

Humantech’s website hosts this free ergonomics resource center, which includes links to more than 1,000 vendors representing 250 different types of ergonomic equipment.


Real Tech for Real Business
TechWeb bills itself as the business technology network, and it has plenty of valuable resources to back-up its claim. TechWeb features current tech news, as well as specific business information about mobile technology, software, security, e-business, management, networking, hardware and storage. There are also specialized links to business-technology reviews and financial technology.


Cleanlink Now Offers Daily News
Sanitary Maintenance magazine’s website now features daily news. Visit our home page at www.cleanlink.com. Get all the latest news on mergers and acquisitions, regulatory and business developments, and industry personnel changes.




POSTED ON: 12/1/2003