Cleaning up with convergence

The convergence of data and telecoms has been a slow process, but there are opportunities if you know where to look, says Nick Booth.

In the IT industry, convergence is generally taken to mean the merging of two distinct sectors of communications: telecoms and data networking.

Unfortunately, the phrase has been hijacked by every other sector of the industry in which two different disciplines seem to be evolving to the same point.

So these days it is possible for an ambitious Cisco-certified engineer to attend a seminar on 'Convergence: Opportunities and Threats' and end up listening to someone banging on about printers, faxes and photocopiers.

The funny thing is that many of the lessons they learned would still be relevant because, when any disciplines merge, the effect on the relevant channels is similar.

Still, to most people the term convergence means the coming together of telecoms and datacoms. And within that broad subset, what they usually have in mind is putting voice over the data network. While this is not the only convergence game in town, it is certainly the one in which all the big money is supposed to be made. Unfortunately, that is not happening.

Don't believe the predictions ... yet

The first lesson of convergence is that you should discount practically everything that is predicted. Analysts have been making some confident predictions for the market opportunities that will arise in the next few years as voice communications becomes a subset of the datacoms industry, but this has been predicted since the early 1990s.

These predictions will come true eventually, but only the foolhardy would bet on it in the current economic climate. Only when communications convergence presents a cast-iron case for cost-cutting, with solid reliability and quality of service, will IT buyers be convinced that they can take the risk.

"There is still a perception that anything that combines voice and data is fraught with problems," said Bob Jones, managing director of Equiinet and a veteran of the data and telecoms industries.

"Most companies can only envisage the mixture of voice, which is still their lifeblood, with data. The level of reliability you can expect from datacoms would be unacceptable in the delivery of voice calls. Subjecting a firm's phone system to that would be a total nightmare."

There are significant challenges on the channel front as well. There is a shortage of resellers which could live up to the title of 'converged reseller', to such an extent that the distributor that coined the phrase, EquIP, seems to have quietly dropped it. Meanwhile, Equinox, which used to describe itself as a "converged services provider", has dropped the C-word from its job description.

As usual, vendors are desperately trying to talk up the idea of convergence. It seems they will say anything to anyone to get them into the market. Obviously, most people who get into convergence do so with one skill, and worry that they cannot pick up the other one quickly enough.

Voice dealers, who make good mark-ups selling hardware, are worried that, by the time they have picked up enough knowledge of IP, the market will have moved on. Meanwhile, datacoms people, used to three per cent margins on hardware, are fretting over the mysteries of traditional PBXs.

Two convergence tribes

Nowadays vendors such as Lucent, 3Com and Cisco find that their channels can be divided into two nervous camps: data resellers and voice dealers. Which group is better equipped to deal with the complexities of convergence?

Privately, the vendors tell them they both have the advantage. Data resellers and integrators that come to their recruitment drives are told they are used to a much faster-moving business environment - the IT industry evolves at lightning speed compared with telecoms - and greater complexity. If you can handle networking, picking up voice skills will be a breeze, vendors say.

Meanwhile, communications dealers are told that, as voice experts, they hold the whip hand. They are the ones people go to when they want complete reliability, because phone systems simply cannot be allowed to crash as often as data systems tend to. Vendors claim that this shows which application is business-critical, and which type of reseller should be trusted with convergence.

That is all very well, according to Jones, but for many companies email is more important than phones. "If email goes down for any company, in the high-tech sector especially, it is a disaster, whereas voice calls we can live without for a while," he said. "And where the early adopters go, everyone will follow in a few years' time."

So what is the truth? Are these channel managers being disingenuous? Or is it the case that no-one really knows what's going on?

It is understandable if vendors' channel managers are getting confused, because convergence is going on at so many different levels. And some of the terminology is unhelpful.

Computer telephony integration, for example, has fooled many people into thinking it is the last word on convergence, when in fact it represents one tiny strand: linking databases to telephone switches.

Meanwhile, there are several fronts on which voice and data networks are being merged, all of them progressing with varying degrees of success.

Paul Rowe, manager of succession enterprise marketing at Nortel Networks, has his own explanation for why convergence is taking so long to materialise.

"Convergence in the wide area network has been slow because customers are renegotiating a better network tariff rate with service providers to route voice between sites," he explained.

As voice calls have got cheaper, the business argument for putting them over the data network, with the potential for disaster that brings, is reduced.

Meanwhile, convergence in the local area network (Lan) has moved with glacial slowness because of the higher cost of IP phones compared with the handsets we use now.

Furthermore, the majority of installed Lans are not ready for voice over IP. They lack the intelligence required to prioritise voice traffic, so cannot give the quality of service required. So forget about any return on your investment.

Fortunately, there are some opportunities. "Plug-and-play IP phones work for certain customers, like convention centres where phones are continually moved around the premises," said Rowe.

"But not in a classic office site where phones normally stay on desks even though users might move around. They can now use voice features such as Pin codes and web management to cut down on the add, move and changes costs."

Some convergence successes

However, at least one area of convergence is moving. The pace of the desktop market is comparatively lively, with IP telephony applications, such as the screen-popping of customer details on the PC when a call arrives on the call centre agent's phone, coming along nicely, although we already had this on analogue phone systems with Computer Telephony Integration.

Other applications are coming onto the market, such as phone set-up and administration using a PC; sending voicemails to an email client; unified messaging; and running a software phone on a PC for portable access to the internet. The list goes on. Whether companies will think they cannot do without these applications in the current financial climate is another matter.

Meanwhile, there is one aspect of convergence that is selling well, possibly as a result of all the uncertainty and paranoia about at the moment: call recording. For example, there are some sectors, such as financial services and the stock markets, where all voice communications must be recorded.

It is getting that way for all sectors, so any business that involves some form of trading, even if it is only giving out advice, will be legally obliged to record all calls. The companies involved now digitise calls and store them on hard disks, rather than tape.

It is likely that voice will always be the preferred medium for long-distance trading between people, because trading is based on trust and far more information can be conveyed using the nuances of the human voice.

Now that voice is digitised and stored as data it can be subject to the same management and analytical tools used to analyse office systems.

Technology has now been created that can scan recorded voice calls and look for patterns. Voice calls can be examined in the same way that data analysis tools are used to identify patterns in sales figures on a database.

By analysing calls, it is possible to identify areas where call-centre staff can be trained, not only to make them more productive, but to help them find their work more fulfilling. This has the added benefit of cutting administration costs.

Nick McLean, director of business applications at digital recording and analysis provider Eyretel, maintained that companies should record all of their calls.

They are, after all, transactions, and firms should have a complete record of them. "Calls can be pinpointed to analyse why sales are lost," he said.

Events have created massive demand for call-recording systems. This is a new opportunity, and one in which strategic advice is needed. Installation is less important than training and after-sales services, which makes this a high-margin sale.

For all its revenue-improving and cost-cutting potential, it remains an attractive proposition for customers. But perceptions must be managed.

"The latest generation of recorders are network appliances. They sit on the network and record to disk, rather than involving the user in masses of clunky tape. Archiving and retrieval is a lot easier, and they don't have to manage a tape library," said John Bell, business development manager for communications distributor Dacon.

Dave Stoddart, a contact centre consultant at Catalyst IT Partners, explained: "Keyword spotting and speech pattern analysis are built into the new systems so that calls can be identified and routed if necessary." These are fantastic features, but the benefits are hard to realise.

"In an ideal world, it would all seamlessly integrate," said Stoddart.

However, it does not, and this is where resellers will earn their fees, making the technology fulfil its potential.

Chris Brill, managing director of AudioSoft, agreed. "Companies can spend as much as they like on technology and customer relationship management software but, ultimately, commerce is a people business," he insisted. "The quality and skills of the front-line troops taking the calls is what matters."

The rapid growth in call centres is generating demand for voice recorders. There are now more than 350,000 call-centre staff in the UK, and this figure is expected to rise to 500,000 by the end of 2002.

A study carried out this year by NOP Research found that a five per cent increase in customer retention resulted in a 50 per cent increase in revenue. So there is a market for convergence that can be addressed now.

EDUCATING END-USERS

• Explain the technology in terms of commercial benefits
• Itemise the key benefits into clear groups: lower maintenance costs; lower telephony costs; additional call-management features (such as voicemail, call routing and 'follow-me' messaging) ; additional customer relationship management features, such as integration with MS Outlook
• Outline typical return on investment
• Advise on technical requirements and compatibility issues
• Provide real-life case studies.

CHANGE THE RECORD

Mike Murley, managing director of dealer Thales Contact Solutions, has a tip for getting into the call-recording market. "Don't fall into the common trap of treating recording as just another peripheral sale," he said. "That mindset needs changing. There is a growing demand for recording. The revenue is higher and it is more rewarding to sell."

Don't think of recording as a secondary sale. It can be the primary sale, a door opener and a way of winning new customers, rather than selling them PBXs and other core products.

Look beyond the traditional markets of public safety, call centres and financial services. They are already well catered for. Look instead at SMEs such as taxi firms, travel agents, betting shops and hotels: anywhere where people are doing business over the telephone.

There are also organisations such as pharmaceuticals and food companies facing a growing volume of troublesome or malicious calls.

CONTACTS

AudioSoft (01285) 883 800
www.audiosoft.com

Catalyst IT (020) 7836 3123
www.catalyst-it.com

Crane Telecommunications
< A HREF=HTTP://www.cranetel.com target=_blank>www.cranetel.com

Dacon (01442) 233 222
www.dacon.co.uk

Equiinet
www.equiinet.com

Eyretel(0870) 600 0626
www.eyretel.com

Nortel Networks (01628) 432 646
www.nortelnetworks.com