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IP Telephony - Latest Developments in Hight Tech Convergence Offer Increased Savings and Productivity Gains

What's New in Technology

May 2003

IP Telephony - Latest Developments in Hight Tech Convergence Offer Increased Savings and Productivity Gains

Good, reliable communications are the lifeblood of any enterprise. Most recently, Internet Protocol-Based telephony--or IP telephony as it is more commonly known--is being positioned as the answer for businesses that wish to improve communication performance and boost productivity. Internet Protocol, or IP, is the name of the language used by most data networks to transmit information. Simply stated, IP telephony is an integrated voice/data system that puts voice communications and data on one big broadband connection eliminating reliance on different suppliers for diverse telecommunications and Internet services.

If you are currently evaluating your business’ communications needs to better address today’s business demands, read on. Here’s some general information to help you understand this emerging technology and its possible cost and productivity implications.

How IP Telephony Works

Traditionally, telephone networks have used circuit switching to connect a telephone caller with the other party’s line. IP telephony uses packet switching, the methodology used by data networks to send and retrieve data, rather than circuits to convey voice or data messages. Packet switching works by “chopping” data into small packets for transmittal. The packets are re-assembled into the original data format at the receiver’s end. Because it minimizes the time needed to maintain connections and reduces the overall load on a network, packet switching is very efficient.

Helping Businesses Work Better

Voice over Internet Protocol -- or VoIP --has been around for some five year or so. If you make long-distance calls, you’ve probably used it –whether you realized it or not, because it is used by many traditional telephone carriers. However in today’s telephony industry, voice communications are just one part of the story.

Businesses need reliable and flexible voice and data convergence —they need products that make the most effective use of important communications applications like conferencing and messaging, and they want to derive maximum advantage from advancements in cutting-edge voice and data collaboration. This is where IP telephony delivers the goods by:

  • Consolidating the voice/data network infrastructure to provide significant operating efficiencies and –in most instances--cost savings;

  • Allowing easier moves, additions and changes;

  • Replacing off-site lines provided by telephone companies with a wide area network to serve inter-office voice communications;

  • Allowing easier integration of voice communications for call centers;

  • Providing users with new options across a range of devices –not only phones but also PCs, personal digital assistants (PDAs) and mobile phones;

  • Allowing users to select their preferences for email, instant messaging or voice communications; and

  • Enhancing productivity by allowing employees on the road to use laptops or PDAs to access the telephony capabilities (email, customer databases, etc.) located on their PCs back at the office.

Information Resources

IP is still an emerging technology and there are many issues and circumstances to assess. It is well worth hiring an experienced consultant with expertise in voice and data to map out your IP telephony strategy and help you migrate your systems in a cost-effective way. Investing in professional advice from an IP telephony expert can help you avoid costly pitfalls. Keep in mind as you move forward:

  • Your existing infrastructure may not support a cutting edge convergence system. Old LAN cabling may be inadequate for IP telephony voice applications

  • Open standards are crucial. Choose equipment that is inter-operable and supports an open architecture environment. It is important to verify that your vendor’s system actually meets these key criteria.

  • Voice quality is key. Voice is the most critical application—customers will not tolerate problems with voice clarity. Make sure the company you work with is as experienced in voice applications as in data.

Although IP telephony is a hot topic, many business owners have yet to understand its full implications for their business enterprises. Most industry experts urge executives to evaluate IP telephony not only as a streamlined solution to the various communications needs of their business, but also for its ability to deliver a tangible competitive edge in today’s fast paced business world.

If you would like to know more, there are some excellent online resources to help you get up to speed. For general educational information on IP telephony plus information on products and vendors, try http://www.iptel.org. In addition, some of the IP telephony industry leaders including Cisco Systems (http://www.cisco.com) and Avaya (http://www.avaya.com) also offer some helpful information including white papers on various issues.

These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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