Question of Convergence

When does a move to voice over IP make sense for government organizations?

by / November 10, 2004
"Voice over IP technology is here to stay," said Kevin Palmer, CIO of the Francis Howell School District in St. Charles, Mo.

Palmer is far from alone in reaching that conclusion. The Government Systems Unit of Cisco Systems is replacing traditional telephone lines at the rate of about 6,000 a day, according to Ed Carney, the unit's vice president and general manager.

In place of that telephone infrastructure, Cisco and other vendors are installing technology that converts voice to ones and zeroes and transmits it over standard data networks.

In an era when communications increasingly rely on Internet protocol (IP) technology, some say the move away from traditional telephone systems is inevitable. "The question isn't so much, 'Do I want to move over to voice over IP?'" said Brian Buffington, SBC's executive director of managed services. "It's more a matter of, 'The world is moving to IP, and when I need to upgrade my voice capability, how will I utilize my IP network infrastructure?'"

For many public CIOs, cost is a major reason to consider migrating to voice over Internet protocol (VoIP) technology. While VoIP isn't the cheaper option in every situation, converging data and voice on one network often reduces capital costs and ongoing expense.

VoIP tends to make good financial sense when an organization is equipping a new facility or replacing an old telecommunications system, said Irwin Lazar, senior analyst with the Burton Group in Midvale, Utah. He compared the cost of a new system based on traditional private branch exchange (PBX) technology with one based on VoIP. "You'll usually find the IP system is significantly cheaper, both on upfront costs and ongoing maintenance costs," he said.

That's because VoIP takes advantage of the same IP-based local or wide area network the organization uses to carry data. "If you've already gone through the pain of building a highly reliable, robust data network, it's relatively trivial to add voice on top of that," Lazar said. "You can also reduce the amount of equipment you need." Rather than install a PBX at every site, agencies can route voice communications through data servers, which can reside anywhere.

"The administrative expense is much lower," said SBC's Buffington, whose company integrates VoIP systems with hardware from a variety of vendors, and also offers hosted VoIP services. "You don't need a seasoned telecom professional to manage your system, because it's much easier," he said.

One Set of Resources
VoIP has generated a high level of interest among public-sector decision-makers, according to a survey by Gartner. But interest hasn't translated into large-scale deployments just yet -- the Commerce Department is the only sizeable federal agency with a widespread VoIP deployment, according to a report in Washington Technology.

Communications provider Qwest noted a growing interest in VoIP at the local, state and federal levels. "VoIP plays a large role in the government sector due to how it will change the way agencies communicate among themselves, with their suppliers and their citizens," said Tom McGrath, vice president of government and education solutions for the company. He also noted that the government sector can expect to see savings from lower line charges, and fewer PBX and key systems that need support.

According to Carney, Cisco sees a growing desire to use VoIP at the state and federal levels, primarily because a converged voice and data network is more cost-effective than multiple networks. Often state and federal agencies also have satellite offices that can take advantage of cost savings from using VoIP to bypass toll charges when communicating with geographically dispersed locations.

Separate teams aren't needed to manage telephone and data infrastructures either, Carney said. "You have one set of resources that have the skill sets to accommodate all of those applications." And you can administer some of your smaller sites remotely, he added.

Since configuring a VoIP system is largely a software matter, an organization can add, delete and move users from office to office at virtually no cost. "You don't have to pay the phone company or value-added reseller to add or change an extension," said Buffington.

Changes to the VoIP system in Campbell County, Ky.'s government offices were relatively simple. "We've been able to do them ourselves," said Andy Kuykendall, the county's IT director. "We don't have to worry about waiting for somebody from Cincinnati Bell to show up."

A government that implements VoIP may save money on telephone usage as well. Calls among offices that operate on the same data infrastructure don't incur charges from a telephone carrier. And although most VoIP systems today are built as "islands," some organizations interconnect their systems to save on local or long distance charges, the Burton Group's Lazar said. "One government agency that makes a lot of calls to another could route those calls over the data network without ever having to enter the public network."

Calls from a VoIP phone to locations outside the data network -- say, to constituents or vendors -- still incur toll charges. Agencies that make a lot of those calls might consider a solution like SBC's PremierSERV Hosted IP Communications Service, which routes communications over the telephone carrier's private packet network, Buffington said. "They're kind of sharing an extended LAN, and they make calls using our hosted service to other parties."

Find Me/Follow Me
Along with savings, VoIP also offers a platform for applications not available on a traditional telephone system. These include find me/follow me services, call management services, voice and video conferencing services, call screening services and remote access services, Buffington said.

Users on a VoIP system, for example, can manage their phone calls via a Web browser. "If you happen to be traveling, you can change how your phone calls are routed anywhere you can connect to the Internet," said Lazar. "You can go in through a Web browser and change where calls are forwarded, or have different phone numbers ring simultaneously."

Most VoIP systems also support the use of a "soft phone," Lazar said. "When you take your laptop and travel to a different city, you connect back to the corporate network over a high-speed Internet connection in a hotel, and you can make phone calls from your computer."

For some government customers, a particularly interesting application is the ability to merge voicemail and e-mail, said Cisco's Carney. Using the Cisco Unity application, the hearing-impaired can have voice messages translated into e-mail. "Or if you are sight-impaired, you can listen to your e-mail."

Capable Network?
When a government agency implements VoIP, one of its first steps is to determine whether the existing data infrastructure can handle the extra traffic. "If your network is fairly old, if it's not all that reliable, you're going to find a significant upfront investment requirement," cautioned Lazar. Often organizations make the transition piece by piece, first converting to VoIP in places where they can best afford it or where they need to upgrade anyway. "You typically don't see an argument for going to an office of 2,000 people, ripping out the current phone system and putting in a VoIP system," he said.

Assuming the data infrastructure is up to snuff, major equipment purchases in a VoIP implementation include the VoIP equivalent of PBXs and IP phones. Customers may buy the equipment and install it themselves, but many outsource the job to a phone company, equipment vendor or third party. "I tend to think that in voice, given that it's not the easiest thing in the world to implement, you want to bring in people who have done it before, who know what the pitfalls are going to be," said Lazar.

An integrator works with the customer to determine which network configuration will prove most effective and give the best return on investment. "We'll sit down with the customers and look at their existing infrastructure, their usage patterns, the state of their LAN and WAN infrastructure, their access to capital -- do they want to make it a capital expense or do they want to sign up for a service? And then we'll craft the right solution for them," Buffington said.

Although VoIP systems have improved since their early days, nearly all agencies beginning implementation must do some tinkering to boost performance, Lazar said. The most common issue is hearing an echo when a VoIP call passes onto the public, circuit-switched telephone network. "That's one we've seen almost everyone spend a little time upfront getting rid of," he said.

After running their VoIP system for a few weeks, officials at the Francis Howell School District decided to invest in a piece of hardware called an echo canceler, which conditions the packets to eliminate phase issues, district CIO Palmer said. "It improved our quality 99 percent," he said.

School District Saves
The Francis Howell School District's communications infrastructure covers four high schools, five middle schools, 10 elementary schools, three early childhood centers, an administration building, and three buildings for maintenance and support. Approximately 2,200 teachers and staff serve 26,000 students in prekindergarten through 12th grade.

The district moved to VoIP after determining in 2002 that it was time to replace both its data and voice networks, Palmer said, and it made better economic sense to implement one new network than two. Converging voice and data on one infrastructure saved the district $350,000 in implementation costs, he said. SBC DataComm integrated the system for the district in 2003, using Cisco equipment and software. The price tag was $674,000.

The T1 lines the district already leased offered sufficient capacity to handle the converged voice and data, and the VoIP system allowed the district to eliminate many standard telephone lines running into its facilities. "With our distributed PBX system, we had POTS [plain old telephone service] lines going into every building," Palmer said, adding that with the VoIP system, the district went from 400 lines to 150 or 160.

The VoIP system cut telecommunications expenses by $70,000 per year, Palmer said, and allowed the district to cost-effectively increase the number of telephones in its buildings from 300 to 1,600, with a phone in each classroom. Teachers can now call parents and others when needed, rather than waiting in line to use phones in a school's main office.

The district soon plans to test an intercom application, which it could add to its VoIP system by simply installing external speakers. A traditional intercom system would have required a second wiring infrastructure, Palmer said. "That one application saves us, for a medium-sized building, around $20,000."

Palmer said he is interested in a time clock application, which would allow hourly employees to clock in and out using any of the 1,600 phones on the VoIP system.

"We'd [also] like to integrate our voicemail, e-mail and faxes, and have one communications conduit that somebody would look at to see all messages coming into their building, area or department," he said, and the district is considering wireless IP phones for security purposes.

From Nine to One
In Campbell County, home to 88,000 residents in northern Kentucky, the government explored VoIP when it came time to replace its old telephone systems. "We had about nine or 10 different phone systems out there," said county IT director Kuykendall. "They were not interconnected. Some of [the phones] were so old they were starting to fail."

County government employees didn't have access to modern communications services such as voicemail and the ability to transfer calls. "In some departments where they had a business line, they had a 'princess phone' -- you know, they had the 'Wal-Mart special' rather than a phone built for business functions," Kuykendall said.

When the county decided to upgrade its telephone systems, potential return on investment was the biggest reason for choosing VoIP. Converging voice and data allowed the county to remove most of the 122 business lines running into its facilities. "Just going to voice over IP and looking to get rid of all those business lines, we ended up saving, with a little bit of maintenance too, about $100,000 a year," Kuykendall said.

Campbell County chose Global Business Solutions to integrate the system, using technology from 3Com. In 2003, it deployed the technology in stages.

To accommodate the system, which serves 140 users in 11 locations, county officials boosted the bandwidth on the data connections running into its buildings. The county worked a deal with Time Warner to provide point-to-point T1 lines, the cost of which was cheaper than what the county was paying for the frame relay connection it used previously, Kuykendall said. It also had to upgrade its data network, a job already on the county's to-do list. "The voice over IP gave us a good excuse to do some things we needed to do anyway," he said.

Campbell County bought three IP telephone switches and installed them in the courthouse, detention center and police department. It also bought new phones for each employee's desk.

The county completed implementation in November 2003, the total price for which was between $167,000 and $170,000. "We expect full return on investment in 18 months," Kuykendall said.

While users explore the new system's features, the county is doing additional upgrades to its data network, planning to test some newer-model IP phones and considering additional applications -- including wireless access to the phone system, Kuykendall said.

Case by Case
As Houston considers its VoIP strategy, cost is a major focus as well. "I got interested in the voice over Internet protocol project primarily because of the cost savings potential that exists when you converge voice and data networks," said Richard Lewis, the city's CIO and director of its Department of Information Technology. "All your internal calls can travel over a data network you already own, and you can substantially reduce your telephone lines,"

In May 2003, the Houston City Council approved a contract with systems integrator Getronics to conduct a three-phased VoIP implementation using Cisco technology. The contract was worth $22 million, but the Council released funding only for phase one -- a $527,000 assessment of the city's voice and data networks.

The assessment revealed the data network was badly outdated. The infrastructure included 218 routers and 789 switches. "Ninety percent of those devices were beyond the manufacturer's support life," Lewis said. That discovery prompted the city to revise its plans.

"We've decided, at least for the time being, to focus on the data network upgrade and only consider VoIP deployments where either we have a new facility where we have to make a voice investment, or we have a PBX that needs to be replaced," Lewis said.

Following that policy, the city implemented VoIP when the Houston Police Department moved its special operations command center to a new location.

Two other PBXs in city facilities are reaching the ends of their lives, and sometime before June 2005, the city will consider replacing them -- possibly with a VoIP system, Lewis said.

Before starting the current project, Houston implemented VoIP in its public library system, with about 600 phones. This was a proof-of-concept initiative. It did not demonstrate cost savings. "Until we invest in a call manager, I can't reduce the circuits that could be eliminated in the library," Lewis said.

Houston's government infrastructure includes more than 140 facilities, 22,000 phones and 11,000 telephone circuits covering about 600 square miles. Under the original VoIP plan, Lewis expected to consider, on a case-by-case basis, the deployment cost versus savings, and make a decision based on whether there was sufficient reduction of circuits as a return on the deployment cost.

"We can do the same thing, as we have PBXs that need to be replaced," Lewis said, adding that whether to replace the legacy technology or start a new VoIP deployment from the ground up is kind of the difference between a forklift and a greenfields approach to a migration. "I just haven't had to answer that question yet, because I'm not ready."
Merrill Douglas Contributing Writer