How Companies Are Making Unified Communications Pay Off

UC isn't easy or cheap to deploy. But companies can start with cash-saving steps and move to more strategic goals.

February 19, 2009

17 Min Read
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Instead of being greeted by a guard, a visitor to Global Crossing's regional headquarters in Rochester, N.Y., is directed to a computer kiosk, which prompts the visitor to enter an employee's name. The kiosk opens a video window on the employee's computer, showing who's in the lobby. Simultaneously, an instant message or an audio connection opens up, and the employee can accept or reject the visitor by typing or speaking. If the visitor is accepted, the kiosk takes a picture and prints a temporary pass that lets the visitor into the building.

While technologies such as voice over IP and chat are common at most companies, scores of early adopters are pushing the concept of unified communications even further, putting features such as presence to new uses, embedding communications into the flow of everyday business activities, and developing applications that automatically send relevant data directly to phones or the UC software on PCs. "A lot of companies are saying we can save money from this," says Mike Fuqua, Global Crossing's senior VP of global information systems. "But I don't run into a lot of companies that are doing unified communications transformationally."

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Heck, most aren't even calling it "unified communications." And it's a brave CIO, especially in this economy, who'll pitch UC as a sweeping strategy. Companies usually don't even start looking at UC until their circuit-switched PBX systems turn into a money pit of repairs and workarounds. That opens the door to VoIP and its immediate long-distance cost savings, and from there companies consider UC apps, usually piecemeal.

A "very large customer" of Microsoft's Office Communications Server won't even talk about the potential improvements in productivity or integration, or any of the new features in the newly released OCS 2007 R2, says Gurdeep Singh Pall, a Microsoft VP who manages the vendor's UC product line. "They just say, 'My audioconferencing system needs to be replaced,'" he says. "A lot of customers will approach UC realistically in this way."

Customers often straddle their conventional PBX systems and unified communications, maintaining two systems because there's a "minor feature" missing in the UC suite that some subset of employees' needs, Singh Pall says. "It's like when people said, 'Oh, some applications have to stay on mainframes for such and such a reason,' and then those apps became isolated," he says.

In just a few years, unified communications will be deeply embedded into business activity, and companies will deploy UC that takes advantage of high-speed wireless, standardized video, and location-based services, predicts Forrester analyst Henry Dewing. But for now, 57% of companies haven't gotten past the pilot stage with UC. Eighty-six percent say they can make a good business case for UC, but there's some serious waffling going on: 55% admit there's "confusion about the value of UC" for their companies.


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Whirlpool shows how subjective the value can be. The company was building a system that promised features such as automatically notifying a quality assurance staffer--by whatever communications channel the staffer picks--if a factory line missed certain performance measurements. With a change in CIOs, however, the project was scrapped, though Whirlpool retains its Avaya IP phones.

So unified communications isn't going to be swept in on some big transformational agenda. That's probably a good thing, since it forces attention on features most likely to be actually used and business processes that would benefit most. Nevertheless, even as UC must prove itself, feature by cash-saving feature, CIOs should look for the larger opportunities that are harder to measure, from better co-worker collaboration to better customer service.

First Step, Save Money

Global Crossing, an IP networking carrier, closely tracks the cash savings from using its UC services. For example, the company's chief operations officer holds weekly global staff meetings of about 16 employees via OCS videoconference. That setup is one piece of a UC deployment that saves an estimated $16,000 to $25,000 a week on conferencing services; 30% on long distance by making IP calls between offices and routing customer calls through local, VoIP-enabled Global Crossing offices; and 40% on the travel costs of the chief operations officer's staff by eliminating flights to and from meetings.

But Global Crossing wanted to get employees responding more quickly to customer problems and increase customer satisfaction. As part of that effort, Fuqua's team began looking at how employees used communication tools when responding, digging into data such as when, where, and how long employees were on the phone and in conference calls.

UC should be in the apps people useevery day, Global Crossing's Fuqua says

What Fuqua found was that Global Crossing was paying too much and getting too little in return for a muddle of disparate collaboration technologies, such as standalone audioconferencing, Web conferencing, videoconferencing, and telephony, that could be simplified by relying instead on a unified communications platform like Microsoft's OCS.

It wasn't just the cost that was troubling. Since the tools didn't have common IP features like presence awareness, employees often didn't know the best way to reach colleagues when trying to fix a problem, or even whom to call, and both customer service and worker productivity suffered. When a service order was delayed because of parts not coming in from a supplier, customers were sometimes left for days without sufficient explanation because employees didn't know whom to call.

When a company is looking at these kinds of big process improvements, it can be a good time to bring UC in, says consultant Nick Lippis, because there tends to be a large budget attached to it, and "you can add something like UC software because it adds more value to an investment you're already making."

Fuqua thinks that for UC to pay off, it must be integrated into the business applications people use every day, which at Global Crossing includes Microsoft Outlook and an application that tracks order workflows. Now, when employees log on to the order workflow app, each step shows the name of an employee who can answer questions about it, with an icon showing whether the employee is available for a chat. Largely through the use of this app internally, Fuqua estimates Global Crossing can fix problems, such as a mistake when changing a network design specification, 15% to 25% faster.

By midyear, Global Crossing will give customers a similar view into who's available to solve a problem. Using OCS's presence capabilities, a portal will let customers with service problems log in to see contact information about whom to call and a presence function that tells the customer which contacts are at their desks.

Global Crossing also is testing what it calls M-Bots, or mobile bots. When engineers or salespeople want a piece of pertinent information like recent sales to a customer or the status of a trouble ticket, they can use Office Communicator Mobile on a smartphone to message to a chat bot, which responds with a list of options on what kind of information to return. However, Fuqua recommends mobile UC apps be as simple as possible because of the limited power of mobile devices.

When Old Systems Break

Few companies come to UC with broad business goals like Global Crossing did. Instead, most end up the way intellectual property law firm Brinks Hofer Gilson & Lione did--with an 18-year-old PBX that became increasingly costly to fix and house. What's different about Brinks Hofer is in how it has embraced UC since moving to VoIP, and in where the Chicago firm's headed by developing applications that combine UC into software used for everyday operations.

Brinks Hofer began by rolling out an Avaya Communications Manager IP PBX in 2005. Brinks Hofer CIO Rod Sagarsee spent eight months researching VoIP systems, opting for Avaya based on redundancy, disaster recovery, and features like extension to cellular, where an office phone and cell phone might ring simultaneously. Brinks Hofer's experiences hint at a dichotomy in the UC marketplace: IBM and Microsoft come at it mainly from message and presence enablement, while the conventional networking and communications vendors--Avaya, Cisco, Nortel, and others--come from the angle of IP telephony.

VoIP's the staring point for many UC efforts, and Brinks Hofer faced the same initial problem any IP telephony needs to overcome: making sure quality of service is sufficient for latency-sensitive voice and video traffic. Within its first six months, the firm's president, while traveling in Japan, was thrilled to take a live late-night call to his office number. Every CIO knows such executive moments are critical to the continued support of a project.

6 Key Vendors


1. Avaya
Its UC products have telephony at their core.

2. Cisco
Having led the IP telephony drive, it's trying to add UC onto networks.

3. IBM
Lotus Sametime is growing quickly beyond chat and presence.

4. Microsoft
Office Communications Server keys off usability.

5. Nortel
Products integrate well worth partners'. Bankruptcy will give CIOs pause.

6. Siemens
Its OpenScape suite is standards-based and promises scalability.

Brinks Hofer no longer bills clients for the connection cost of many long-distance and conference calls, and it's saving $18,000 monthly, or about 75%, on long-distance costs, as the firm even routes calls from one office through another office to clients local to that office.

Once VoIP proved itself, Sagarsee found it easier to get executive support to include IP voice, Web, and videoconferencing. From there, OCS's presence capabilities seemed a natural next step. Avaya's Communications Manager and softphones serve as the backbone of IP communications, but the firm uses Microsoft for Web conferencing and other features, in part because a growing number of Brinks Hofer clients also are using OCS and they may someday integrate systems in some way. However, interoperability among vendor products remains difficult, despite industry standards such as SIP for audio and SMPL for messaging. Sagarsee says Brinks Hofer, in testing before rolling out to employees, had difficulty optimizing flow between the Avaya phone system and Microsoft OCS servers.

The next leap for Brinks Hofer is application development, where UC holds the most long-term potential. For example, Brinks Hofer soon will begin requiring lawyers and other employees to check out paper files whenever they need them for work. It will do so by combining the workflow capabilities in the firm's new accounting and docketing systems with OCS, using SharePoint to display the data on who's using which files. So instead of a lawyer sending a firm-wide e-mail asking who has a paper file checked out, the lawyer can not only see who has it, but presence will tell if that person is in and whether she's reachable by IM or phone.

The firm also is working with IT services company Onward Technologies to develop an online directory that incorporates presence and click-to-call, so colleagues could see if a co-worker is in before calling. The next step would be to combine UC with other workflow apps under development so that, for example, if there's a question on a bill, someone in accounting can trigger a call to the primary lawyer billing that client.

Feature-By-Feature Adoption

Midwestern regional insurance company Celina Insurance didn't even have e-mail in 1998, but by 2001 it had presence-based Web chat via IBM Lotus Sametime for independent insurance agents to communicate with Celina's underwriters. Celina is on the leading edge in exposing internal communications tools to partners while still taking a feature-by-feature approach to adopting UC.

Today, Celina gives its independent agents not just a company directory, but also a presence capability showing which underwriters or other Celina representatives are working. For a small insurance company with about 500 agents, it's a differentiator from competitors, which mostly have automated phone systems for agents. "Agents hate that," says Celina CTO Rob Schoenfelt. "Press a button, press a button, press a button. With us, you see who's there and you get a human being. Agents say, 'Well, that's Ken, and I can see Ken, and call him.'"

Schoenfelt's philosophy: reach a human, not push a button

Celina's experience also shows the power of presence and chat to cut down on voice calls. The company put $300 VoIP phones on each desk and installed a Mitel 3300 IP PBX mostly to cut its long-distance bill, but its installation of Sametime instant messaging reduced phone call volume by 40% on its own. "I can't even remember the last time I've received internal voice mail," says Schoenfelt.

Celina plans to add click-to-call to its Sametime deployment sometime soon, so agents and employees with IP phones will no longer have to even dial numbers to reach one another. Even so, Schoenfelt expects people will continue to send instant messages before they make calls. Chat has become second nature at Celina.

Presence has, however, led to some odd behavior on occasion, as employees learn some new social norms. Schoenfelt says he has received messages that say so and so isn't at his desk, and it's 8:30 a.m., and he was supposed to be here by 8. Presence's encroachment on privacy can be unnerving, but it's manageable. Schoenfelt discusses it with a sense of mildly bemused annoyance.

As with any new technology, keeping employees in the loop about how to use UC is critical. Global Crossing set up training sessions, sent tips to employees, and created a chat called "Ask Amanda" with a dedicated IT support employee.

Data To Phones

Cooke Aquaculture, which raises salmon and cod in the Northeastern United States and in Canada, hasn't installed even some fairly basic UC features on its IP phone system, such as voice conferencing. Yet it's ahead of the curve in application development, using its IP phone system for delivery of real-time weather forecasts to fishery managers.

In 2006, Cooke replaced an analog Centrex service from its telecom provider with Cisco IP phones for its 1,500 employees. Cost savings came from reducing long-distance bills and hosting voice mail internally, says Cooke IT manager Warren Giesbrechd.

But the biggest advantage now comes from building custom phone applications, such as those that bring weather and market conditions straight to employee phones. Data on water temperature and wind speeds at fisheries in Newfoundland and New Brunswick used to come via a daily e-mail. Now the company's collecting that data every 30 minutes, relaying it via a Cisco wireless bridge and then Cisco CallManager to IP phones used by fishery managers and other executives. Another application tracks salmon market prices and sends updates to salespeople every Tuesday and Thursday, again pushing XML data through Cisco CallManager to phones.

Cooke's next steps are to invest in MeetingPlace Express audioconferencing and then Cisco Unified Personal Communicator, which is software analogous to Microsoft's Office Communicator UC client. The company spends about $30,000 with telecom carriers for voice conferencing, and adding the IP audioconferencing will replace that with a smaller software maintenance fee. The Cisco UPC client will open additional collaboration options such as presence and videoconferencing, Giesbrechd says.

But all that's not going to happen for a year or two. For now, Cooke has bigger fish to fry: consolidating and virtualizing its data centers. "The case is there, but it's just a matter of timing as far as budgeting and priorities go," says Giesbrechd.

While the biggest potential for UC will come with embedding communications into everyday operations and using phones as a data-delivery platform, that's not easy to do today. Global Crossing had to rearchitect its systems into a service-oriented architecture, and it has worked directly with Microsoft developers to get its applications running. Cooke Aquaculture leaned heavily on a Cisco reseller, Bulletproof Solutions, for its data-to-phone effort. One Cooke developer has learned a few tricks about creating apps for Cisco's UC platform but would need outside expertise to do projects of the scale and complexity of Global Crossing's.

Cisco says it's making it easier to develop on top of its UC products-- some of those products use REST and SOAP frameworks for integration, while Cisco's WebEx platform now has open APIs. Microsoft introduced new APIs in the latest version of OCS. However, many customers lack in-house skills, and the skills employees used in telephony management don't translate easily to UC.

Intel is using Microsoft OCS to handle ad hoc meetings. Yet while Intel makes good use of some OCS features out of the box, it's only considering custom development with the latest release of OCS, this month. "The core plumbing now exists" for providing PC-based communications that employees can customize, says Gregory Bryant, a former IT manager who's now VP of Intel's business client group and general manager of the vendor's digital office platform. Now that Microsoft and others are making it easier to develop around unified communications, look for third-party application developers to build it into their products.

That's what oil and gas services company Schlumberger hopes to do, with its highly specialized Petrel software, which oil and gas companies use to analyze simulations in the early stages of developing new wells. Schlumberger would like to integrate UC features into Petrel, so team members could use presence information, conferencing, and click-to-call to connect more easily. With major oil company customers such as Royal Dutch Shell rolling out UC, there's likely demand.

But the Petrel-UC combo is stuck in proof-of-concept mode. The newest version of Petrel runs on 64-bit Windows Vista, but there's no 64-bit version of OCS just yet. Integration with UC probably won't be available until the next release of Petrel--if at all.

That said, IT service and software providers are seeing a growing interest in combining UC with enterprise apps. Building messaging into workflows, so messages trigger automatically when an action's needed, is largely an untapped opportunity for all but the most sophisticated UC users. For example, IT services company Engage built apps called ConnectCare, CliniCare, and ClientCare that have features aimed at letting health care providers do tasks such as automatically notify nursing supervisors via phone or chat if a nurse isn't there for a shift or patient appointment.

In this economy, UC's growth hinges on its hard cash savings. Still, companies shouldn't write off productivity gains, especially when staying nimble is as important as ever and as companies are forced to compete with fewer resources. Even if investments in UC go piece by piece, businesses could cut costs in the downturn and stand to benefit from productivity gains once growth picks up.

Imapct Assessment: Unified Communications

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