creating a competitive advantage with converged ... · marketplace finding 1: converged...

IBM Global Services May 2007

Creating a competitive advantage with converged communications.

2 Thebuzzaboutconverged

communications

3 Convergedcommunications:

newinsights

5 Marketplacefindingsfor

convergedcommunications

12 Summingitup:therealities,

risksandrewards

14Checklistforselectingavendor

ContentsThe buzz about converged communications

The way the business world views and uses communication systems is undergoing radical change. That buzz you hear is about converged com-munications—the integration of voice, video and data onto a single Internet Protocol (IP) network. IT and business executives in organizations of all sizes are feeling pressure to adopt this technology. Many executives may even fear that they already lag behind.

Like you, IBM believes that when there’s a buzz emerging in the marketplace, it’s worth listening to. To find out what business and IT executives think about converged communications and gain an independent view of what’s happen-ing in the marketplace, IBM sponsored anonymous research late in 2006. (Refer to Appendix A for information about how the research was conducted and who participated. This white paper contains quotations from some of the participants in this study.) When IBM reviewed the results of this research and compared them with a cross section of secondary resources, such as analyst reports on the subject, four important findings that affect customers emerged across industries:

1. Converged communications can increase business benefits and agility—or not.

2. Adoption of converged communications is typically viewed as a tactical IT

issue, not a strategic business imperative.

3. Converged communications initiatives can often be perceived as risky.

4. Incumbent vendors are often seen as the logical first point of contact.

Our most important finding is that there’s a lack of clarity in the marketplace about the true nature of how converged communications works and the real, strategic value it provides businesses. Converged communications can be a daunting engagement. This is due, in part, to the information overload that exists. But it’s also because converged communications is only recently reach-ing technological maturity, which has created an environment ripe for the proliferation of business applications.

Creating a competitive advantage with converged communications.Page �


Highlights

Convergedcommunications

providesasimpler,moreversatile

communicationsexperience.

MorethanVoIP,converged

communicationsrepresentsa

game-changingdynamicin

today’smarketplace.

To understand the full potential of converged communications, it is help-ful to think about the scope of what the term encompasses. It goes by many names and spans several areas of business. It’s sometimes called IP conver-gence, Voice over IP (VoIP), IP telephony or IP communications, to name just a few alternatives. In fact, converged communications lays the founda-tion for everything from VoIP to online collaboration to unified messaging (e-mail, voicemail and fax transmissions all routing to an e-mail inbox) to next-generation applications such as intelligent surveillance and high-definition teleconferencing. Regardless of what it’s called, what’s important is what it does: Converged communications provides a simpler, more versatile commu-nications experience capable of nurturing productivity in a rapidly changing business environment.

To further understand the potential of converged communications, please read the detailed discussion, which includes two industry case studies, in the IBM white paper, Paving the way for business innovation with integrated

business communications.1

Converged communications: new insights

Converged communications represents a game-changing dynamic in today’s mar-ketplace. Even more interesting is the breadth of change that this technology is expected to deliver. It is difficult to imagine a future in which a single customer, business or supplier won’t be touched by some piece of this technology.

Converged communications is not just about voice over the Internet. It begins with an optimized, IP-based network. The IP network architecture must be built to specifically support business application needs. And the network infrastructure must be properly developed and optimized to support the communications architecture. Together, network architecture and network infrastructure form the critical foundation for the full range of applications an organization needs to run its business. Once the foundation is in place, busi-ness applications can be attached. VoIP and digital video are two examples.

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Another is enabling mobile employees to access data remotely using a laptop, personal digital assistant (PDA) or even a cell phone. Given this network-as-foundation prerequisite, the communications infrastructure becomes an asset that helps build a distinct competitive advantage. The converged network enables employees to be more productive, enhances col-laboration among stakeholders, increases customer satisfaction, decreases IT redundancy and, ultimately, lowers the overall cost of doing business. The

converged network provides a return on investment (ROI) through increased

business productivity—not necessarily through cheaper infrastructure costs.

The reality is this: In our mobile, technology-enabled world, the communi-cations infrastructure is likely to become the virtual headquarters for the next-generation enterprise. To illustrate, consider these recent implementa-tions from IBM’s case files:

A global financial institution used IP convergence as the conduit for bring-

ing all of its units onto the same IT platform, thus improving the flexibility

of its call center operations.

A statewide credit union implemented three IP communications solutions

to deliver a high-quality, consistent member interaction through voice, fax,

e-mail and chat options.

A police department installed a converged network as the backbone of a

wireless-enabled mobile digital video surveillance program for its squad cars as

well as a global positioning system (GPS) that tracks the vehicles at all times.

A national beverage distributor uses the need to upgrade its network

with a converged implementation as a launch pad for a new wireless

warehouse infrastructure that includes radio frequency identification

(RFID) applications.

A large commercial insurer replaced its Centrex system with a converged

voice and data solution and implemented low-cost IP conferencing to con-

nect customers with employee experts.

“ Once you establish theunderlying plumbing, it’s very easy to introduce a new application at a remote location. Time to market is significantly reduced.”

— IT executive in the healthcare industry


To learn more about the detailed applications and inside story of business-related converged communications, and to see many more examples, please read the IBM white paper, Integrated business communications: a force for

business transformation.2

Marketplace findings for converged communications

As with any new technology, myths and rumors abound during the early and evolving stages of adoption. While media-driven information creates excitement surrounding the value of new technology, it is often based on “what if” and “wait until” scenarios rather than on real-world applications for business. By the time the technology media have moved on to the next “technology du jour,” chief informa-tion officers (CIOs) are left pondering whether they missed the mark on the last “next great thing.” Such has often been the case with converged communications.

IBM understands the converged communications environment perhaps better than virtually any other provider in the marketplace. IBM has been help-ing clients implement converged networks for years, as well as building and continually improving on its own in-house converged network since 2001. Currently, more than 110,000 IBM employees around the world are using half a million communication devices of choice over one unified network.

To learn more about IBM’s in-house experiences with converged communica-tions, please read the white paper, How IBM positioned for business growth

using integrated business communications.3

Marketplace finding 1: Converged communications can increase business benefits and

agility—or not

Long-term cost savings have been a major reason for businesses to invest in converged communications. Common applications such as VoIP, video-conferencing and IP-based mobile devices can dramatically reduce costs in telephony, travel and support. However, it is not just about cost savings any-more. Today, it is about business agility and organizational benefits.

Theuncertaintyofnewtechnology

andthespeedwithwhichitis

developedoftenleaveCIOsina

bind—theydon’twanttogetleft

behind,buttheydon’twanttobe

onthe“bleedingedge”either.

Convergedcommunicationscan

helpreducecostsandmakeyour

businessmoreflexible.

Highlights



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As Gartner analysis indicates: “Investments in a communication infrastructure often result in benefits to multiple areas. The deployment and use of unified communications in one area, such as personal unified communications, can enable benefits in other areas, such as workgroup unified communications. For instance, making presence information available offers benefits at the individual, workgroup and enterprise levels.”4

Traditional ROI analysis can often be difficult for converged communications deployments but frequently required by business management. Conventional analyses can fail to demonstrate savings because of the high switching costs that can be incurred in upgrading the network infrastructure. The true benefits of implementing a converged network are usually realized in less measurable ways such as increased productivity and efficiency. Be aware, however, that sometimes the benefits of converged communications are not realized. A typical illustration of this would be a company that implements a VoIP telephony solu-tion to achieve savings in long-distance costs but doesn’t make the necessary network infrastructure investments in the areas of optimization, bandwidth and quality of service. As a result, the implementation fails to meet expectations and customers report poor performance, unreliable service and general dissat-isfaction with the technology. This situation seems to occur less as companies recognize the need to approach the network with a more holistic, business-based view.

Insight 1: Organizations that map converged communications to specific business

objectives will find that the technology delivers what it promises

Beyond cost savings, the key reasons for implementing converged communica-tions are improved efficiency, collaboration and productivity. Other reasons include flexibility, simplification, easier support and disaster recovery.

“ In some cases, we have to upgrade our network anyway, so ROI is easy to justify. In other cases, like the mobile force, we have to justify in terms of added capabilities or productivity.”

— IT executive in the manufacturing industry

“ We have 600 IP devices integrated to the nurse call system. Patients can contact nurses from their beds. It’s great to have this added convenience. It’s a competitive advantage for us.”

— IT executive in the healthcare industry


For example, at educational institutions, demand for converged communica-tions is spurred by the applications that professors and students require or desire. At some universities, a converged network is viewed as a competitive advantage in attracting students and generating revenue.

Forrester Research has also reported on the extensive benefits. It states that IP communications “has evolved from a replacement technology for busi-ness telephone systems into unified communication (UC) applications that improve worker productivity and reduce business delays in reaching key decision-makers. With renewed emphasis on business benefits for acquiring UC, IT managers can further justify investments in IP communications based on savings from simplifying the management of their communication applications and the ability to connect to others quickly regardless of device or location.”5

Companies that view converged communications through a wide lens and with the perspective of strategic, long-term business applications are much more likely to create a flexible converged network that will truly support the business, strengthen competitive advantage and ultimately generate significant ROI.

Marketplace finding 2: Adoption of converged communications is typically viewed

as a tactical IT issue, not a strategic business imperative

Few businesses have mapped out a converged communications roadmap. In general, implementation is being accomplished on a piecemeal basis.

Initial growth in the converged communications marketplace has been gener-ated by tactical initiatives, such as the replacement of an aging private branch exchange (PBX) system. As of mid-2006, slightly more than half of North American enterprises were evaluating, piloting or rolling out IP telephony.6

“ We have thousands of stu-dents, and they want to use the latest stuff. Our solutions are very user driven.”

— IT executive in the education industry

“ Instead of throwing out equip-ment, we are doing converged communications slowly. There is no master plan. We add additional applications on an as-needed basis.”

— IT executive in the distribution industry


But the lack of a strategic roadmap in this area can contribute to technical complexities, convoluted timelines and ill-defined objectives. For businesses that view converged communications strategically, cost justification may be less of an issue.

Business often defines the need for converged communications in terms of high-level requirements, such as supporting a mobile salesforce, but it rarely prescribes the technology. It then charges its internal IT organization with finding a technical solution.

Historically, few decision makers have viewed converged communications as foundational—an all-encompassing, end-to-end enabler. As a result, many business executives lack a clear understanding of converged communications concepts and the related business applications. The result is that IT tends to use network upgrade cycles, moves, hardware refreshes and mergers as catalysts for exploring converged communications technologies. Justifying investment costs during these events is perceived as easier.

Insight 2: Adoption of convergence works best when business and IT executives

strategically work together to achieve business objectives

Upgrading to converged communications is often—and should be—done in a phased or piecemeal approach. However, the key is to have a roadmap that is developed with both business and IT perspectives. This allows IT to leverage existing assets while simultaneously planning for future investments and stra-tegically building the network. It also allows the business side to understand the assets available, how technology can map to business objectives and where to focus future investment decisions.

Businessexecutivesoftenperceive

convergedcommunicationsinterms

ofisolatedtechnologicalneeds

ratherthanhowitcanprovidehigh-

levelbusinessbenefits.

Highlights

ITshouldalignwithbusiness

objectivestoleveragethe

fullcapabilitiesofconverged

communications.


Forrester Research recommends considering the entire solution when upgrad-ing converged communications. “IP communications provides a platform to connect people to people across separate locations and to drive new business efficiencies. However, as a developing technology, it is important to map to your existing applications to achieve the best results.”7

From a business perspective, converged communications represents something strategically significant. This is why C-level and line-of-business executives are so crucial to the planning and decision-making processes. These executives understand the priorities of the business, its customers and its processes, and they empower IT to apply the technology to address the business priorities in ways that lead to competitive advantage.

Marketplace finding 3: Converged communications initiatives can often be perceived

as risky

The technology of converged communications is still perceived by many users, particularly business leaders, as new and unproved. Most businesses don’t want to be at the “bleeding edge” of a leading-edge technology.

A converged network is perceived as risky and vulnerable to security attacks, especially among risk-averse and security-conscious industries such as finance, banking and government. Service quality and reliability are concerns with VoIP, whereas with traditional voice technology, reliability is rarely a concern.

Then there is the issue of user resistance, which can be a significant barrier to adoption. It takes time for users to accept and become accustomed to new modes of communication. And managing converged networks is viewed as complex. New knowledge and skills are required by users as well as by those managing and supporting the converged network.

“ There is an issue about tech-nological maturity. Risk is a big issue. It won’t be on our strategic list of projects at this point. The technology is not there yet.”

— IT executive in the banking industry


Insight 3: The risks are real, but they can be mitigated through careful planning, engaging

seasoned experts and the use of best-in-class technology solutions

Indeed there are challenges in implementing a converged communications network, but the risks are not as great when a vendor is engaged that can help design and implement the right solution for your business. In fact, much of the risk can be mitigated when you partner with a vendor that has experience and long-term vision.

According to Yankee Group, “As enterprises look to deploy a unified commu-nications platform, they must thoroughly evaluate vendors in this emerging space. It is important to choose a vendor with a management solution that can meet the demands of a comprehensive platform.”8

Security issues and employee acceptance are potential risks that should be addressed during the assessment phase of the transition. While security issues tend to be unique to each organization and should be addressed as such, employee acceptance can most likely be resolved with proactive communica-tions and by designing a solution that employees will use.

Forrester Research recommends that businesses invest in end-user training prior to launching converged communications technologies. “Although UC simplifies how workers communicate, many will not adopt or change their current mode of working without clear guidelines on how to gain the most value out of the features.”9

Providing access to the information employees need is crucial. Today, orga-nizations must accommodate where, when and how their employees work. A network infrastructure that supports converged communications can help connect employees and other key stakeholders. It can help tap into their knowledge to accelerate processes that lead to innovation, thereby creating useful, productive communities based on common interests and goals. The result can be an environment where all minds are working collectively against business problems, multiplying the power of the knowledge base.

Therisksarenotasgreatwhen

youpartnerwithavendorthathas

experienceandlong-termvision.

Organizationsmustprovideaccess

totheinformationemployeesneed

andaccommodatewhere,when

andhowtheiremployeeswork.

Highlights


Marketplace finding 4: Incumbent vendors are often seen as the logical first point

of contact

Often, the number-one source for customers pursuing the converged commu-nications model is their current voice systems provider. The second source is their current data systems provider. IT managers prefer to work with existing infrastructure vendors, leveraging in-house skills whenever possible. These vendors dominate the marketplace with data and voice solutions. They may be the first point of contact when implementing converged communications, but that is because customers often don’t realize that there are viable alternatives.

Demonstrated ability to execute an enterprisewide, IP-based solution is essen-tial. Voice, data and regional specialty vendors typically provide hardware-based tactical solutions. When engaged on a network project, they don’t necessarily take a roadmap approach—a strategic big-picture view that includes the range of current and planned, vendor-neutral, heterogeneous business applications and technologies. Also, they don’t necessarily have the breadth of knowledge and depth of experience to implement a true converged communications net-work that considers the strategic nature of the business.

It is better to engage a vendor that can help provide a robust, flexible, security-enhanced network based on open standards that can fully integrate with current and planned business applications. Such a network can enable a high level of interaction among people, applications and information—virtually anytime, anywhere—using a wide range of devices and access points. Users can communicate over the same system with the device that works best for them at any given moment. A quality vendor should be able to provide an appropriate view of projects that meet the immediate needs of the business but are applicable to the long-term goals of the business and fit into budgetary and other management commitments.

Customersoftenchooseexisting

vendorswhenimplementingnew

elementsintoorupgradingtheIT

environment.

Highlights

Existingvendorsmaytakea

too-narrowapproachorlackthe

knowledgeandexperienceto

implementastrategicconverged

communicationsenvironment.

Creating a competitive advantage with converged communications.Page 1�

HighlightsInsight 4: Vendors — like IBM — that provide leading-edge, end-to-end converged

communications services offer the highest potential for long-term strategic success

Simply stated, IBM has the big picture view with the localized expertise and global breadth to help solve a wide range of business problems.

IBM takes a fundamentally different approach by embracing multivendor support, heterogeneous environments, open source, flexibility and open stan-dards. We understand that the change to a converged environment involves considerable investment in infrastructure and that leveraging existing invest-ments in physical and personnel infrastructure is crucial in the true and appropriate adoption of converged communications.

Summing it up: the realities, risks and rewards

Reality check:

• The journey toward converged communications begins with a compre-

hensive approach to the network infrastructure as an enabler of business

innovation and with a roadmap for a strategically designed network that

can be expanded or enhanced over time. Excellent supporting architecture is

the key to deriving full advantage from the inherently optimized nature of a

converged network.

• A converged communications network is the foundation to which virtually

all business applications will be attached. Such an infrastructure is, there-

fore, a value-added asset rather than a liability.

• Converged communications is not just about VoIP. There are virtually

limitless technologies (business applications) involving converged communi-

cations. It boils down to one simple concept: it’s all just data over a network,

so the most important factor is how that data—whether it’s voice or video— is

managed and delivered over the network.

IBMhasthebigpictureviewof

convergedcommunications.

Theconvergedcommunications

networkinfrastructureisavalue-

addedasset—notaliability.


Highlights• Huge risks are not necessary. When implemented strategically over time,

converged communications can negate much of the risk and uncertainty.

• Long-term vision is key. There is a lot of flexibility in how converged

communications technologies are applied. The key to success is more in

the “how” of the architecture, design and implementation of a strategic

solution that addresses the specific needs of your business. It is less about

the “what” of specific technologies or hardware platforms supporting

converged communications.

Risks you may face if converged communications is approached tactically rather

than strategically

• Wasting time, resources, capital and energy on immature or inappropri-

ate solutions (according to Gartner, enterprises will waste US$100 billion

through 2011 buying the wrong networking technologies and services10)

• Implementing incomplete, nonscalable or misaligned converged communica-

tions solutions

• Choosing a technology that is not selected as an industry standard and will

not be supported in the future

• Experiencing ROI for converged communications that is less than expected

or not in line with vendor statements and industry experts

Rewards for doing converged communications right

• Whether your organization is large or small, converged communications can

lead to competitive advantage. Some of those benefits can include:

• Mobile, flexible, innovative ways to work together with key stakeholders

• Increased employee productivity

• Improved customer service and collaborative relationships with

business partners

• Decreased IT redundancy and a lower cost of doing business

• Business leadership, innovation and a competitive advantage.

Strategicallyimplementing

convergedcommunications

mitigatesmuchoftheriskand

uncertainty—andcanlead

tocompetitiveadvantagefor

organizationsofallsizes.


Highlights• Converged communications can yield far-reaching benefits by enabling your

organization to create innovative approaches to the way the business is run.

• When converged communications is architected strategically, truly robust

competitive advantages, succinct processes and business application efficien-

cies can be realized.

• IP converged networks offer businesses the flexibility to solve business prob-

lems from entirely new vantage points and with previously unavailable

technological applications.

Checklist for selecting a vendor

Regardless of which vendor you select to help your business transition to con-verged communications, it can be helpful to look for one with these capabilities:

• Extensive converged networking experience

• A comprehensive approach to networking—not one that is solely tactical

• A consultative approach that brings together multiple lines of business to

engage your organization in a lifecycle methodology that begins with under-

standing your business and assessing your current network infrastructure

• The ability to go beyond consultation and assessment to plan, design and

implement a converged communications network that addresses the short-

and long-term needs of your business

• The ability to integrate your existing and nonstandard environments with

modern business applications according to a long-term strategic vision of

your organization, thereby creating a converged communications network

that enables business innovation

• One or more tools to help quantify the ROI and business benefits of con-

verged communications for your company

• The ability to implement converged communications across your company,

regardless of size, industry, business needs or geography

• The ability to work across multivendor environments and integrate hetero-

geneous hardware and software components.

Lookforavendorwith

extensiveexperiencein

convergednetworking,one

thattakesacomprehensive,

nottactical,approach.


For more information

To learn more about converged communications and about the solutions and expertise offered by IBM, please contact your IBM representative or IBM Business Partner or visit:

ibm.com/services/us/index.wss/offerfamily/gn/a1000397#ipc3

http://ibm.com/services/us/index.wss/offerfamily/gn/a1000397#ipc3

Appendix A

The IP Convergence (IPC) Buyer Behavior Research was undertaken to help enlighten IBM’s strategic understanding of customer perceptions in the general IPC market. This study included interviews with 72 IT and line-of-business executives and managers across U.S. and Canadian industries, each considered a purchase decision maker or influencer for IPC-related purchases. Participants were prescreened for at least a basic awareness and understand-ing of the IPC marketplace, vendors and technologies. This was a blind study conducted by RONIN Corporation, a third-party professional services vendor. Focus groups took place in September 2006, and IBM was not cited as the sponsor of the research. Participants may or may not have been current or former IBM clients.

©CopyrightIBMCorporation2007

IBMGlobalServicesRoute100Somers,NY10589U.S.A.

ProducedintheUnitedStatesofAmerica05-07AllRightsReserved

IBMandtheIBMlogoaretrademarksorregisteredtrademarksofInternationalBusinessMachinesCorporationintheUnitedStates,othercountries,orboth.

Othercompany,productandservicenamesmaybetrademarksorservicemarksofothers.

ReferencesinthispublicationtoIBMproductsandservicesdonotimplythatIBMintendstomakethemavailableinallcountriesinwhichIBMoperates.

1 Paving the way for business innovation with inte-grated business communications.IBMGlobalServices,January2007.http://www.ibm.com/services/us/its/pdf/wp-gsw00534-usen.pdf

2 Killmeier,Reiner,andRalfJungclaus.Integrated business communications: a force for business transformation.IBMGlobalServices,January2007.http://www.ibm.com/services/us/its/pdf/wp-gsw00431-usen.pdf

3 How IBM positioned for business growth using integrated business communications.IBMGlobalServices,January2007.http://www.ibm.com/services/us/gn/pdf/ibm-ibc-wp.pdf

4 Elliot,Bern,andSteveCramoysan.Discovering the Value of Unified Communications.Gartner,Inc.,February12,2007.

5,6,7Herrell,Elizabeth,withSimonYatesandChristineE.Atwood.Unified Communications Merges With IP Telephony In 2007.Forrester,February2,2007.

8 Alvarez,Vanessa,andGeorgeHamilton.A Guide to Managing Enterprise Unified Communications.YankeeGroup,January2007.

9 Herrell,Elizabeth.Unified Communications: What You Need To Know.Forrester,November9,2006.

10 Plummer,DarylC.,et.al.Gartner’s Top Predictions for IT Organizations and Users, 2007 and Beyond.Gartner,Inc.,December1,2006.

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