For the past 10 years, all California executive branch agencies were restricted to using either a centrally hosted, managed Centrex TDM (Time Division Multiplexer) based system or an approved PBX (private branch exchange) voice system.  The California Department of Insurance (CDI) was the first agency to be selected by the state CIO to participate as the official pilot for voice over Internet protocol (VoIP) technology, becoming the first system-wide IP telephony deployment for California. As a result of the pilot program, CDI has successfully implemented the system, performed a number of cost analyses, and determined whether deployment of VoIP technology would be as effective for other state government agencies.

CDI regulates the largest insurance market in the U.S. with over $118 billion in direct premiums written in the state.  The objective of the Telecommunications Infrastructure Replacement Project (TIRP) was to replace the existing telecommunications (telephony) infrastructure. The current PBX system was at the end of its useful life, and the CDI needed a system that combined voice and data over the same converged network -- hence the migration toward VoIP.

In addition to the benefits gained from increasing staff productivity and service levels to insurance consumers and agents, the cost savings of the TIRP are significant.  The estimated cost savings in long distance calling within the CDI is $80,000 annually.  Cost avoidance of the lease payments on the Los Angeles call center system add up to $111,000 annually.