Call Forward
Cost also was the primary reason Johnson Inc. (more than U.S. $600 million in annual premium), a St. John's, Newfoundland-based personal and group home, auto, and travel insurer, decided to switch to IP telephony. "We wanted to get back some of the communication costs," says Glen Ryan, the carrier's coordinator of technical communications. "We have 43 office locations across Canada, and to keep things flowing on a daily basis was very expensive." Because Johnson Inc. had the existing infrastructure to support Cisco's VoIP product, in April 2003 Ryan tapped Cisco's CallManager for internal communications, and IP Cisco Express and Cisco Unity for the company's contact centers.
Initially, Johnson Inc. implemented the technology at six regional offices. To deploy the solution, the insurer first had to remove rented telephone equipment from Telco (Kfar Netter, Israel) and install a whole new network at each branch location, for which it contracted Aliant (Saint John, New Brunswick). "We decided that trying to merge any old technology with new technology would only cause more of a hindrance," explains Ryan. "Since we were renting, it was just easier to spend on the equipment to get more of a return on investment." Aliant also installed Cisco's solution for Johnson Inc. The entire initiative took two years to complete.
Johnson Inc. already has experienced a significant savings. "Before, our communication costs were around $2.4 million [CAN, approximately U.S. $2 million] annually, and right now we are running at about $1.6 million [U.S. $1.37 million]," according to Ryan. But Johnson Inc. also has recognized the customer service benefits offered by VoIP. Currently, it is working to tie Cisco's contact center features into the carrier's e-business strategy. "We have a 24-hour call center service that allows live chat with representatives," says Ryan. "We want to make sure we are offering the best customer service we can."
Stay on the Line
As Johnson Inc. is discovering, VoIP's benefits extend beyond cost savings. The technology enabled Northbrook, Ill.-based Allstate ($156 billion in assets) to service its customers at a critical time -- after Hurricane Katrina ravaged the Gulf Coast, including several Allstate facilities. With many offices and customers affected by Hurricane Katrina, Allstate was able to immediately transfer call center activity to other locations around the country. "Our business is about putting people's lives back together," says Catherine Brune, CIO for Allstate. "Because of VoIP, we were there for our customers when many of our competitors couldn't be."
But like many other companies, Allstate first looked at VoIP as a cost-savings play. "It has become much more than I think we ever envisioned it," notes Brune. "It is truly an enabler of a new business process and business continuity."
Allstate began exploring VoIP in 2000 and by 2003 decided the technology had matured enough to make the investment. Because Allstate already was using Avaya for telecommunications, the carrier's executives decided to deploy Avaya's Communication Manager in a customer-facing call center in Northern Ireland. "In the U.S., we struggled with how we could build a business case, holistically across the enterprise," explains Clay Roberts, enterprise architect for Allstate. "We figured if we could deploy this properly internationally, we could deploy this properly in the U.S."
Since the IT department had been testing VoIP products internally for several years, implementation went fairly smoothly, according to Roberts. By the end of 2004, Allstate built a business case on the benefits it gained from VoIP in Northern Ireland and decided to roll out the technology on a year-to-year basis. Since then, Allstate has implemented IP telecommunications throughout 20 Allstate service and call centers. "Now, we are in the process of rolling out IP telephony to a majority of contact centers," relates Roberts, who adds that the initiative is scheduled to continue over the next few years.
A Fresh Start
The same advanced VoIP functionality that appeals to established carriers like Allstate also can help start-up insurers provide high-level customer service. And since start-ups don't have legacy systems to deal with, many -- such as Calabasas, Calif.-based Insurance Neighborhood, which was incubated by Indianapolis-based WellPoint ($41.8 billion in total assets) -- are leapfrogging into VoIP. "Since our consumer promise is convenience of the Internet and the service of the local agent, we need to have a local network from Day 1," says Alan Katz, president and CEO of Insurance Neighborhood, who notes that the carrier deployed ShoreTel's (Sunnyvale, Calif.) VoIP solution because of the scalability and expandability of the system's features.
And carriers such as New York-based Integro Insurance Brokers ($300 million private placement) realize that converged communications can provide a competitive advantage right out of the gate. "The telephone is critical in our business," says Craig Lowenthal, CIO for Integro. "VoIP offers a combination of products and services for our employees to be accessible to our clients." The company, which started up in May 2005, chose Nortel's CS1000 platform for telephone switches, Call Pilot for voicemail, MCS 5100 multimedia server for audio and video conferencing, and the IP 2007 Phone -- VoIP phones that can be integrated with each employee's computer. "With this technology, our brokers can collaborate with each other as if they were all local," says Lowenthal. Currently Integro is live with VoIP in nine offices. It is in the process of implementing VoIP in five more offices and extending its features.
Of course, start-ups aren't the only organizations with an opportunity to build a VoIP network from the ground up. As part of an effort to migrate to a new core system, Safeway Insurance (Westmont, Ill.; $15.7 billion in total assets), which first began investigating VoIP in 2001, recently adopted the technology. "We didn't feel comfortable with the technology until recently, where we found ourselves in a unique position," says Mike Leather, network services manager for the insurer. "We were moving one of our offices and decided to investigate VoIP to replace one of our legacy systems." Safeway's legacy telecom system from Tadiran (Port Washington, N.Y.), located in the carrier's Monroe, Calif., office, "was an expensive system because we needed to call someone in to implement any changes," explains Leather.
In June 2005, Leather decided to implement ShoreTel's VoIP solution in the Monroe office. "Although we looked at a couple other vendors, it pretty much came down to ease of maintenance and the ability to manage the system ourselves," he says. The ShoreTel system, which runs on Safeway's Microsoft (Redmond, Wash.) Windows 2003 servers, is a distributed, scalable solution layered on the IP network. Along with ShoreTel's system, the carrier elected to implement Power-over-Ethernet (PoE) switches, which allow technicians to run just one Ethernet cable to the access point for supplying both power and data. Implementation took two days.
Leather relates that Safeway chose to purchase the system with every available feature, including call center forwarding and digital messaging. "In the future, we plan to exploit more features of VoIP, like screen pops, to provide better customer assistance," he explains, adding that the insurer is in the process of rolling out the system to nine more of its offices, a project that should be completed by May. "This is a great investment for Safeway," says Leather. "Overall, the cost of maintenance on the legacy system alone was going to be more than deploying this system."
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