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VoIP - Key to Convergence

Insurers' Voice over Internet Protocol plays signal the shift from multiple networks to a unified network of voice and data,delivering a new world of efficiencies and flexibility.

Using Avaya Global Services (Basking Ridge, N.J.) as an implementation partner, the carrier rebuilt its communications network with Avaya Communication Manager running on Avaya S8300 Media Servers, Avaya G700 Media Gateways and Avaya P330 Stackable Switching Systems. The second part of the initiative was to build a contact center using Avaya Interaction Center.

Implementation began in 2003, resulting in some decisions that likely would be different today - such as whether to implement a hybrid digital PBX/IP environment rather than pure IP, according to John Columbro, director of IT operations, Antares Management Solutions (Westlake, Ohio), a wholly owned subsidiary of Medical Mutual that provides all of the carrier's IT services and also markets IT products and services to other companies. "When I was considering this technology, it was less mature than it is today," Columbro says. "If I were asked to build a brand-new building today, I would be much more willing to use [San Francisco-based] Cisco," which sells pure IP solutions.

"If you have brand-new buildings, top-notch data switches, top-notch wiring and prioritization - quality of service right out of the gate - all IP is the way to go because of the savings in technical support and infrastructure costs," Columbro says. However, the limitations of the technology and Medical Mutual's own environment counseled a heterogeneous solution, and similar environments counsel other insurers to take the same path, even today.

Columbro emphasizes that if there is any legitimate concern about the viability of VoIP initiatives, it relates to the sufficiency of the existing network - and those who manage it - to support the new technology, not to the reliability of the technology itself. "If you don't have the commitment - if you don't have the resources, the right prioritization, the right components in place - you could have a bad experience with VoIP," he says.

Voice Is Unforgiving

The way MetLife's Luna explains it, while voice is not a "bandwidth hog," networks are inherently "burstable" - or subject to failure when too much is attempted to be channeled through them. And voice as a medium of communication over the network is more liable to intolerable disturbances. "You can have some delay and degradation and still be able to send and receive files, e-mail, etc.," Luna explains. "But voice is unforgiving."

Since the prime motive for the conversion was achieving premier customer service, Medical Mutual made sure it had the necessary pipes in place, as well as the network management to make sure less-critical, data-related use would not degrade voice quality. Nevertheless, the Avaya solution allowed Medical Mutual to mesh the new with the old. "Avaya tolerates both digital PBX and IP and allows us to leverage existing investments and move to IP at our leisure," the carrier's Columbro says.

That is an approach that still can make sense, even for companies starting to investigate VoIP now, according to Columbro. The options for companies today, in his view, are first, "to make your legacy last to the end of its days," and, "second, if your infrastructure can support it, do the full convergence and put nothing but an IP appliance at the end of the wire." The third option, he notes, is to "hedge and do the hybrid - have the ability to support both traditional digital PBX and IP in your systems."

Hybrid, Columbro adds, is for those who say, "I have legacy systems I need to support; my infrastructure isn't 100 percent bulletproof; and I still have servers going up and down that can collide against voice, so I'm going to have the best of both worlds."

Hybrid has worked well for Medical Mutual. The Avaya solution has yielded improvements in customer service, including a reduction in caller wait times from more than one minute to under 20 seconds, improvement in service levels from 21 percent to 94 percent, and a five-year net benefit estimated at $1,843,000.

In defense of the IP pure play, Rune Olslund, Cisco Systems' financial services market manager, notes that sooner or later some of the hybrid investment will have to be sacrificed - such as IP cards that interface with the old PBX. "Pure IP is the future, so eventually your [hybrid] investments will have to be replaced and only some of it can be salvaged," he asserts.

Olslund argues the compelling benefit of going to pure IP in terms of a simpler, centralized support model and converged applications across the enterprise. "The quickest ROI for a pure IP solution exists when PBX leases are about to expire, when old PBX or key systems have outlived their useful life, when an insurance company has multiple systems that don't integrate well and where there's a greenfield opportunity, such as a new field office," Olslund argues. "Many companies are implementing pure IP solutions one field office at a time and integrating with existing PBX and key systems in other locations via gateways."

This slow migration approach is no more complicated than the hybrid approach proposed by many PBX vendors, and it requires less investment that eventually will be replaced, Olslund insists. "At Cisco, we have even made lease buyout and equipment buyback programs available to ease the transition to pure IP," he relates.

Better Now Than Ever

Salt Lake City-based Beneficial Financial Group (approximately $600 million in annual revenue) made the transition to pure IP under circumstances similar to those of Medical Mutual - the carrier was looking to reach new levels of service (as it re-branded from Beneficial Life Insurance), and it wanted to replace an aging Aspect call center and NEC phone system. A very important difference between the two cases, however, was timing - Beneficial Financial made its decision in August 2004.

"We could have moved to a traditional PBX-type phone system four or five years ago, but we saw the IP world improving, and around 2004 we felt it had become a viable solution," says Brent Burgon, the carrier's director, technical services.

Impressed by the company's prior experience, Beneficial Financial contracted SBC DataComm (San Antonio, Texas) as its integrator and implemented a Cisco IP phone system, including the vendor's CallManager application, Unity message processing and IPCC Call Center; a Cisco LAN infrastructure; and Avaya's Verint Call Recording.

The entire project, from decision to live date, was completed in just 120 days. The project was of a preliminary nature, Burgon emphasizes. It set the foundation for the kind of functionality the carrier plans to extend to its distribution partners in the near future. Immediate benefits include the achievement of a single phone system, reduced phone line charges, caller ID, in-house conference calling functionality, unified messaging and the capability to manage fax, e-mail and voice mail through Microsoft Outlook.

Beneficial Financial Group's future plans include integration with agency phone systems, hosting agency phone systems and enhanced conferencing with agency partners with both audio and video. Burgon also sees the functionality as helping on the distribution side as the company moves to add financial adviser-type sales representatives to its traditional life insurance sales force.

Burgon says the project cost about $800,000, though he remarks that "A company that already has its LAN structure in place wouldn't have to invest as much." He credits the pressure of an unsupported phone system as the prime practical driver, but given that his IT organization's capital budget is usually only about $500,000, he credits the vision of business leadership as well. "We made the decision to get as far into the bleeding edge as we could," Burgon says. "Management was very supportive of the benefits that would come to us from a converged network."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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