VoIP Case Study: 
An Untapped Resource for Businesses

By Pat Traynor
June 2004

If you look in any business magazine or newspaper these days, it's hard to turn more than a couple pages without seeing an article about the hottest new technology: Voice over Internet Protocol or VoIP as it is called by those in the technical know.  VoIP is a relatively simple technology.  It converts sound into packets of data that travel across the Internet or a private network (just like an email) and then reassembles them at their destination into their original form.  In a conventional phone call, sound is converted into electronic signals that travel along a dedicated circuit through an elaborate network of switches.

While VoIP is the latest buzz technology (this week at least!), what most people don't know is that it has been used in the business world for quite a while.  Watched almost exclusively by CIOs and their IT organizations, the technology quietly took hold a few years ago and has made its way into almost every country, every industry, and every size business.

You may not have been paying attention to it, but VoIP has already helped shape business models and lower operating costs in all sizes of business.  This is despite the economic environment that has surrounded VoIP's existence – a bear economy that has brought hundreds of companies to their knees.

Detractors have criticized the technology for a number of reasons including reliability, sound quality, and the cost of implementation.  However, the technology continues to improve and now offers sound quality and reliability on par with traditional phone service.  The savings that VoIP provides in the long-term are undeniable and often, this savings easily offsets the cost of implementation.

Perhaps the greatest advantage of VoIP is that it allows companies to consolidate technology.  Combining voice, data, fax, and video traffic into a single network reduces costs 

by lowering the costs of hardware, software, and maintenance.

If you closely examine the economics of VoIP and the current trends, it becomes obvious that the first adopters will be startup companies, companies with voluminous long-distance calling expenses, and companies already planning to significantly upgrade or rebuild their network.  It's an investment in the future of the business.

A Success Story: To support this example, look at Ryla Teleservices, a market leader in outsourced customer contact, data verification, and validation services for business-to-business interactions.  Almost three years ago, Mark Wilson, an entrepreneur and teleservices industry veteran, created Ryla Teleservices in Woodstock, GA.  Ryla's management team decided to implement a VoIP solution from AT&T during the initial construction of their network.  Since Ryla's business revolves around telephone data collection, a VoIP solution made financial sense.  Wilson and his management team realized that VoIP would lower their long-distance and network maintenance costs as well as offer the flexibility to implement advanced technical features as the business grew.

Wilson believes that VoIP has contributed significantly to the success of his business.  Ryla now employs more than 200 people and has produced double-digit revenue growth year upon year since its creation.

"The AT&T Managed Internet Service VoIP solution has clearly proven its value to our company.  The service is reliable and the cost benefits are almost immeasurable.  It was one of the first major decisions we made when starting up in 2002 and we're very pleased," says Wilson.

VoIP has allowed Ryla to provide more services, such as Web chat and email response management, without any additional telecom expenses.  "This has had a positive effect on our profitability and gives us an edge over outsource call centers who aren't using VoIP," Wilson says.  "As the business continues to grow, VoIP will provide the flexibility to implement more advanced systems to meet changing business demands."

Ryla's Director of Business Intelligence, Ashok Vairavan, maintains that the cost-savings and fixed-pricing model afforded by VoIP solutions are a key benefit to Ryla.  The company's customer service agents handle millions of inbound and outbound interactions every year.

 "A traditional public-switched telephone system would have cost us significantly more than what we're paying for VoIP service," stated Vairavan.  "And a fixed monthly rate for an allocated amount of minutes of service, a typical feature of VoIP plans, allows us to effectively predict our telecom expenses each month, which is critical for a multi-channel contact center like Ryla."

Ryla first contacted AT&T in March of 2002 and signed on for the Managed Internet Service (MIS) solution, which includes remote management of voice and Internet traffic.  An AT&T engineer assigned to the Ryla project helped determine system and equipment requirements prior to system implementation.  Once that was complete, AT&T remotely configured the VoIP lines and routers and began monitoring the service.  Since Ryla's VoIP solution runs almost entirely on AT&T's intelligent network, problems can be identified and solved before Ryla is even aware they exist.

"I sleep well at night knowing that, with AT&T's VoIP solution, the service is always on and is being watched closely by experts," says Leo Dashevskiy, Ryla's Director of Information Technology.  "The system is completely maintenance free to us, so we have more time to focus on our core capabilities.  We don't have to worry about software upgrades, configuration changes, and compatibility issues – it's all done for us by AT&T."

The Future of Telephony: Ryla is an excellent example of how an early adopter of VoIP is using the technology to gain a competitive edge.  Yet, it is important to realize that VoIP won't replace traditional phone systems overnight.  After all, nearly one million rotary phones are still in use in the United States, even though Touch Tone phones were introduced nearly forty years ago. 

The lesson for companies is that given the right situation, VoIP can dramatically alter operations and even business models.  VoIP can assist large and mid-size businesses to lower costs and, more importantly, give smaller businesses the critical competitive edge they need to play ball with the big boys.

As VoIP flourishes, both businesses and consumers alike will harness the advanced capabilities that the technology offers.  These capabilities extend far beyond anything now available through traditional phone service.

Because VoIP is available through the Internet, users enjoy two evolutionary advances in telephony.  Computer and phone systems will become ubiquitously connected resulting in capabilities never before imagined and calls will be routed anywhere at any time.

Since calls can easily be routed to any Internet connection with a broadband connection, people can take their VoIP phone number anywhere they go.  Whether they're in a conference room or hotel room, working from a remote site or using a wireless phone, phone calls will reach them.

Of course, some people might not want to be reached wherever they go!  When users want to sit down for a relaxing dinner with their family or powernap before a big meeting, they can simply route their calls directly to voicemail with the click of a button.

Because VoIP is easily integrated with a computer, users can access call logs capable of detailing incoming and outgoing calls by date, time and duration, as well as other criteria.  Think of the convenience and power that this feature will offer to attorneys, call centers, and dozens of other professions that spend significant parts of their day using the phone.  Also, think of the ability to access all email, voicemail, and fax messages from a single mailbox – whether you are calling to listen to emails or checking your computer for voicemails.

Connecting phone calls over the Internet will inevitably lead to the convergence of voice communication with all other types of communication platforms including email, instant messaging and video conferencing to name a few.  How companies customize that technology to fit the needs of their business will be the most fascinating part of the VoIP revolution.

Businesses, and especially call centers, will begin adopting VoIP at an increasing pace, consumers will follow, and soon VoIP telephony will become the standard in communications.

VoIP offers unlimited possibilities.  Think of what it can do for you. 

Pat Traynor leads AT&T's VoIP Services Acceleration, Professional Services, and Strategic Partnership.  She is charged with advancing AT&T's new integration services sales and driving revenue growth jointly with AT&T's partners and agents.  Traynor previously led AT&T's hosting business to market success and was key to AT&T's hosting services portfolio depth, global expansion and top industry ranking and recognition.

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