Corporates catch the convergence wave

The widespread acceptance that data, voice and video will routinely travel across the corporate network is indicative of how the concept of converged communications ­ – where a single IP-based network carries all enterprise communication – ­ has taken root. And yet, for such a near-universally accepted approach, it has been something of a slow burner.

The notion of network convergence emerged nearly two decades ago with frame relay ­ – an early virtual private network (VPN) technology ­ – and ATM-based infrastructures. However, these were cumbersome to manage, expensive to install and the surrounding technologies were immature. The introduction and availability of private IP networks in the late 1990s, with vendors such as BT and Cable & Wireless launching multi-protocol label switching (MPLS) VPNs, meant that enterprises could finally segregate and manage the traffic on their systems. This allowed voice and data packets to be carried on the same network. Nevertheless early adopters needed in-depth understanding of both their voice and data requirements to avoid massive bottlenecks and breaks in service.

While the benefits of a converged network – cost reduction from managing a single network, opportunities for improved productivity and more effective collaboration and the potential to develop new revenue-generating streams ­ – have been noted, uptake has been slow.

According to recent research by analyst Ovum, only 40 per cent of the largest companies in the UK have moved to MPLS networks. “Increasingly, over the last 10 years we have seen companies converge their networks, migrating from legacy infrastructure to IP networks,” says Peter Hall, research director at Ovum.

But momentum is building. Today, even mid-sized companies are recognising the potential benefits and are commonly deploying converged infrastructures.

“The fact that companies have migrated to a converged network doesn’t mean that they are supporting both voice and data,” says Hall. “It means that they may be thinking about doing so in the future and have developed the infrastructure to support that possibility.”

Once enterprises have accepted the concept of a converged communications strategy they need IT infrastructure capable of supporting voice, video and data ­ – usually across both fixed and wireless systems.

Migration of the telephony system onto all, or part, of the corporate IP network is commonly the first step, as and when the business or the technology refresh cycle dictates. Despite this slow start, Ovum estimates that 80 per cent of all the voice traffic in large enterprises will be running across the converged network within five years.

The drivers for this migration vary from ease of management to improved collaboration and decision-making. However, in most cases cost is not usually the compelling factor.

For British fashion brand Ben Sherman, its global infrastructure is essential to its success in the wholesale and retail markets. IT director Cormac McCarthy says the network has been developed and upgraded over the years and now every location around the world has a flexible fixed and wireless IP infrastructure.

“Whenever we open a new site we put in the best technology available that will allow us to run voice, video and data; however, our main problem is in justifying the expense,” he says.

While McCarthy recognises the benefits of integrating his telephony services across the network, he is also aware that the costs do not stack up. “Call charges used to be a big driver for moving to voice over IP (VoIP), but when I can talk to New York for 8p an hour and Northern Ireland for 10p, there is no way I can justify ripping out perfectly serviceable PBX equipment. The only time it is acceptable is when building from new,” he says.

Restaurant chain Yo! Sushi implemented a converged voice and data network between its UK outlets in 2007 to run its point of sale and credit card services, as well as a pure IP voice system from Swyx. With the rollout of 10 new restaurants planned, having a robust infrastructure was an important consideration for IT manager Billy Waters. “Using a converged network solution simplifies the process, allowing us to plan each new site ahead of time, allocate IP numbers and deliver a full set of communications to each restaurant on day one, without the need for third-party carrier intervention,” he says.

Improving business efficiency, especially in the area of client contact, was a major consideration for legal services company Shoosmiths when installing a Siemens 8000 voice platform. “One of our values is that clients should be able to get hold of us easily, therefore our telephony system is an important asset,” says IT director David Basin.

The voice platform has been in place in the firm’s new Nottingham office for nearly a year, but has so far delivered very little in the way of cost savings, although Basin expects to see up to 30 per cent savings as it is rolled out to the other nine offices around the country and all 1,500 staff.

“With telephony now part of the corporate network and under central management, we have seen a reduction in support costs. Disaster recovery is quicker and we are looking to exploit its features to support home working,” says Basin. “Our aim isn’t to force it in; as and when offices are refurbished we will move the telephony onto the network.”

Converged communications also opens up possibilities for new applications and services. One of the most talked about, and possibly misunderstood, is unified communications (UC). Integrating voice, video, data, instant messaging and conferencing components into a flexible, personalised, controllable communications delivery system, unified communications is a philosophy not a product. UC is about bringing together a raft of communications technologies and standards to reflect specific business requirements, while facilitating the improvement of existing, and the creation of new, business processes.

Implementing unified communications is part of gas and oil exploration company Oilexco’s plans to optimise further its communications channels across the business. Technical manager Pieter voor de Poorte says the next step is to integrate the offshore oil platforms into the ShoreTel VoIP system.

“With up to 90 rig workers doing shifts of two weeks on, three weeks off, Oilexco’s explorations in the North Sea are a continuous operation,” he says. “We want to see how well we can maintain quality of service offshore by installing high quality data links to the oilrig platforms. Productivity has improved as a direct result of installing ShoreTel ­ – you can actually get hold of people now, even though geographically we’re all in very different areas.”

One of the fastest growing applications in the converged enterprise is desktop videoconferencing, with travelling and time costs encouraging greater use. However, this technology, with its requirement for huge amounts of bandwidth, is putting pressure on networks and needs to be carefully managed. Industrial technology manufacturer Smiths Group has embraced videoconferencing as a complement to face-to-face meetings and as part of its strategy to improve collaboration through communication.

Recognising that IT is not its core business, Smiths Group has outsourced its worldwide communications infrastructure to AT&T. “We are brilliant at making machines that detect chemical substances in airport luggage, or keep blood at the right temperature, but we are not experts at managing a global network,” says chief information officer Brian Jones.

Pooling its global requirements has resulted in economies of scale and the company expects to achieve annual savings of at least £2.9m on IT and related costs. But for the company raising the performance bar around effective communication, collaboration and better decision-making are the key elements of its converged strategy.

“We want to ensure that the communication is better, not just give people another way of communicating,” says Jones. “Because people communicate visually as well as audibly, videoconferencing makes the experience more realistic and allows us to tap in at the emotional intelligence level, giving a better understanding of what is being said. Our emphasis is on quality of communication, not quantity.”

Next week: In part two, IT leaders share lessons from implementing converged communications.

See also:

New IT minister to produce report on digital convergence

Government wants to take advantage of changing media landscape  17 Oct 2008

Full steam ahead for collaborative action

In the second of our four-part guide to collaboration, Harvey Nash CIO Alastair Behenna explains how talking can boost efficiency  07 Aug 2008

Case study : Council speeds its way to convergence

Faced with a looming deadline, Oldham Council needed a telecoms provider that could accomplish a swift migration to IP telephony  23 Jun 2008

Tesco speeds up with its next-generation network

Supermarket giant to consolidate number of datacentres via £100m IP network infrastructure  05 Jun 2008

Convergence poses hurdles to the broadcast industry

Contrasting demands are evolving among different social groups, says Accenture  14 Apr 2008

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