Insurance Networking News talked to Donald Light, senior analyst at Boston-based Celent Communications Inc., about implementing a converged voice and data system.What is the projected ROI on installing an IP-based voice and data system?
There are two kinds of savings that can be realized due to a converged network: network support operational savings and the more broad operational savings. When you put voice and data on a single network, you get rid of the second network. There are a lot of support and maintenance costs that are stripped out when you put everything on one network. The savings on toll and long distance charges can be substantial, depending on your business model. Those savings are real and by themselves could provide a payback-anywhere from two to four years.
How do you calculate the costs of installing a converged data network?
There are certainly standard costs. One is: When you put voice and data on the same network, you have to make sure you have enough capacity and enough redundancy to deliver voice in the quality people are accustomed to. If you wait three-tenths of a second for some data to be transmitted, it doesn't matter. If you're waiting on the phone to hear someone talk for that extra three-tenths of a second, it can ruin your day.
Is the converged data industry mature enough to gauge its performance against the claims made for it several years ago?
I think so. As far as VoIP and the technology itself, it's probably in the maturing growth phase. Regardless of industry, VoIP is probably well up the sharp part of the growth curve, but the plateau is somewhere in sight over the next two to four years. In terms of experience of companies that have implemented VoIP, regardless of industry, there's a reasonable set of data and proof points out there. In terms of insurance, there are relatively fewer proof points out there, because the industry as a whole has been slower.
How should insurers proceed in terms of fear that a merged data system could fail?
One fear people have concerns when you have voice and data on one network and the network goes down. Are some people reluctant to implement because of this? Yes. Should they be? I'd say: If you put all your eggs in one basket, watch that basket. You have only one network to protect, not two. Are there security risks? Are there failure risks? Sure. Can you build in sufficient network security and redundancy and even fail-safe fall-overs to a more conventional phone system? Depending on what kind of belt-and-suspenders approach a company wants to take, those are all available. It's not a question of whether we can eliminate risk but more a question of whether we can manage it.
Are there any other barriers to adoption of VoIP?
Some big, big companies-Bank of America, Boeing and Ford-are performing installations of hundreds of thousands of handsets. That's going to provide some comfort.
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