Upgrading Conventional Telephone Systems into the Unified Communication System - Case Study Example

Upgrading Conventional Telephone Systems into Unified Communication System (UCS) in Mid Sized Brokerage Company Background: The of this brokerage Company is Nandan Bull Trading Company Limited, and though registered in New York City; it would have global offices throughout the world, especially in cities whose countries are trading partners of US like India, China, Japan, etc. Before taking up the aspect of upgrading conventional telephone systems, it is necessary to define and understand what a unified communication system really means. and what EPABX systems really mean in commercial terms. Some of the main advantages of EPABX are that it is simple to operate and service. It is ideal for a closed circuit telephony system serving a small unit of around 10-12 people. “The major technology trends that enterprise can look forward to in a PBX are support for open architecture-server based platform; support for open OS like Linux, inter-operability with legacy and multi vendors over open standards; VoIP support (H323, SIP) and integration of converged applications like UMS.” (Gold book: Technology options, 2003, para.2). Coming to its disadvantages, it is slow and is uneconomical and could be difficult to use in regions where barriers are present. The use of EPABX could be severally compromised when noise and lack of clarity could result in it becoming a non entity and over long distance telephony which is as expensive as unfriendly. Before taking up the aspect of upgrading conventional telephone systems, it is necessary to define and understand what a unified communication system really means. It is the integration of real-time communication services like instant messages (chat), presenting information, IP Telephony, video conferencing, speech recognition and dealing with unified systems like voicemail, e-mail, SMS, facsimile machines. Rather than being seen as a single product, unified communication system refers to a group of products and services which is aimed at achieving consistency in unifying and also in the improved user interfacing. A unified communication system can be gainfully employed in the business process integration. Thus, the main aspects of UC would be to dispense with laborious and time consuming PBX models and have an integrated, electronic state-of-the-art computer based telephony system that could address modern aspects of speed, efficiency and real time use of modern Electronic Communication Systems. What UCS seeks to achieve is in terms of dramatic cost savings, reduction in time and labor and quick and speedy telecommunication systems, not only within the enterprise but outside it. Under such systems, it is possible to communicate effortlessly and speedily with employees and vendors, situated in far off contract work sites or in distant places in different parts of the globe; where this company may have business interests. The main aspects that this study needs to concentrate are in terms of cost, time and improved speed and efficiency in telecommunication services. Introduction: UC or Unified Communication entails “Voice over Internet Protocol (VoIP) services to consumers, businesses and government organizations. VoIP technology converts voice signals into digital data packets that are then transmitted using the internet. A number of facilities are used to deliver VoIP services, with the two most popular media called the PSTN and cable infrastructures. VoIP can also be provided by satellite, power lines and wirelessly.” (Voice over internet protocol providers (VoIP) in the US-industry risk rating report: Industry definition, 2010, para.3). What are the Cost Benefits? Although apparently IP use like email, voice conferencing and internet chats seem expensive propositions, yet in the long run these systems work out to be quite economical and cost effective communication systems, there are major cost savings since it is computer based and all messages may be carried on through internet, preferably broad band services. Since IP works on global connectivity and competition, it is necessary for such companies to keep their costs low in order to attract more and more customers, not only to enhance the customer base, but also to deliver economically viable and sustainable results for consumers. Otherwise, there are real threats that the customers may migrate to a cheaper, albeit efficient system for their communication needs. Besides, under unified communication systems, there are some major cost savings. Since it is computer based; all messages are carried on through internet, preferably broadband services. Besides, rather than the costs of individual computers of networks, under a unified communication all parts are integrated together into a complete and composite whole. “Modern business communications systems integrate systems that were often manual rather than automated. By combining email, telephone communications and other communications into a single, computer-based system, businesses can reduce the number of specialist roles, such as PBX operators and mailroom personnel, which can lower personnel costs.” (Austin, 2010, para.4). Thus, there is some reduction in the number of employees and well as processes. It facilitates maximum cost savings and benefits. Besides, work efforts and time are also dramatically reduced, thus adding to existing cost benefits. There are also concerns with regard to how these benefits could be positively utilized for business. How Long Would it Take to Recover Costs? This would definitely depend upon the type of costs that are to be recovered and investments involved. Under normal circumstances, it could be said that the more the cost of investments used, the more time it would take for investments to be realized. The three companies that need to be investigated for the prospects of setting up unified communications are Cisco, Avaya and Inter-tel. Coming to Cisco, it is seen “Cisco Unified Communications brings voice, video, data, and mobile applications to help employees communicate effectively no matter where they work or what devices they use. The solution streamlines business processes, helps employees reach the right resource the first time, and increases profitability.” (Unified communications/voice solutions: Introduction, 2010, para.1). Coming to Avaya, it is believed that; through extensive and intensive studies, it is possible to gain the competitive advantages of telephony efficiencies through higher productivity with lower employees and their costs. As envisaged by Avaya, one of the foremost providers of unified communication systems in Europe; it revolutionizes the predated EPABX telephone systems and installs a greater degree of performance and productivity through the use of modern, state-of –the art communications systems. It could also be in terms of scrapping old and outdated models which creates more problems in the present context. (How should an enterprise move towards unified communications, 2009, p.2) From the above Chart, it is clear that integrated communication has a lot to offer to small and medium scale operators by way of cost savings and multifaceted uses for all round commercial benefits. Coming to Inter Tel, “The Inter-Tel Axxess Support program has been specifically created to support those businesses that wish to continue using their Inter-Tel Axxess System without incurring the costs of an immediate replacement but having the flexibility to upgrade at any time.” (Inter-Tel axxess to be discontinued, 2010, para.2). Perhaps, one of the major benefits of Inter Tel is the ability to upgrade to gain more connections, more speech options and better and wider coverage in terms of area. All the three Companies, Cisco, Avaya and Inter Tel are world leaders in the telephony telecommunication areas. However, it is evident that the technical and commercial specifications in terms of actual requirements for the company need to be the main area of focus. For instance, it being a small brokerage company, the internal communication requirements may be lesser. But, external connectivity may rank in critical importance and decisiveness. How do you Account for Technology Upgrading Costs? “Diagnostic study, process modification/control, product design, new technology, product diversification, energy conservation, reduction in rejection rate, improvement in productivity, pollution control and also related issues like vendor development, market exploration, human skill development which have direct or indirect bearing on technology upgradation programme.” (Integrated technology upgradation and management programme, 2010, para.8). The proposal in the case of the service industry should cogently introduce the specific areas of the problems, what are the remedial measures, short term and long term that needs to be taken including the quantification of cost – benefits and the estimated pay back period, etc. The use of specialized institutions and their contribution should also be delineated as far as possible. Therefore, an amalgamated proposal for investigative study as well as accomplishment phase should be submitted. “one-size-fits-all approach is not applicable for many enterprises, and it is necessary to understand how communication technologies can be embedded in business processes and seamlessly integrated to meet stakeholder expectations. Damovo believes that its hybrid approach allows it to accommodate different client needs and offer a solution with the flexibility to suit all customers.” (Damovo: Unified communications, 2009, para.1). Do you lock in one vendor or have different options that allow you to take advantage of new; yet undiscovered technologies that are on the horizon. When technology is the matter of concern, upgrade is essential whether it is for individual or for the organization. It is evident from the case itself that the organization is upgraded to a higher degree technology throwing out what is there already. The technology does not remain the same for a long time; this concept has been put forward by Moore.Moore’s law can be given as “that the number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented. Moore predicted that this trend would continue for the foreseeable future. In subsequent years, the pace slowed down a bit, but data density has doubled approximately every 18 months, and this is the current definition of Moores Law, which Moore himself has blessed. Most experts, including Moore himself, expect Moores Law to hold for at least another two decades.” (Moore’s law, 2010, para.1). The law sheds light on the fact that the technology is fast changing, and that too is the truth before the organizations and individuals. The organizations which do not go along with the pace of this technological advancement might surely be thrown out of the scene. Hence, it becomes essential for the firm to upgrade over the unified communication system which has been proven effective. As the brokerage firm is mid-sized; it is not that essential to open upon all the vendors providing the service of unified communication system and upgrading to a much better system when it is introduced in the future. The prime concern of the firm is to provide a better service to their customers and clients from the upgraded communication system at a reasonable cost. It’s neither needed to lock on to the service of one vendor for the whole life of the organization or to use only the immediately upgraded technology for ever. It is quite natural that there are yet undiscovered technologies at the horizon. It is clearly visible that, they strictly monitor the growth of industries, their quality and other aspects with the evolution of information technology. One who avoids this segment from their way can’t move towards success. Organizations need to take the advantage of these technologies as and when required. Bearing this point in mind, the organization will be open to the new one that are yet to discover and are not locked in one vendor. Any technology with a proven result of improvement for the firm’s activities is welcomed without any hesitation and that is for sure will be enhanced in the path of success. Today, it is unified communication system which has been identified as an effective way of improvement of the prevailing situation in all respects and tomorrow it may be any other technology offered by some other provider.The firm decided to change the prevailing system to provide a better service for their customers. A mid sized brokerage firm has to deal with people and not with another tangible goods. Communication is hence a core part of the development of the organization as a whole and the business in particular. To compete in the market, they must be running along with technological advancement that the industry demands. Hence, it is concluded that the firm will open to the options and if found necessary in the enhancement of progress. It needs to be the right service from the right provider at the right time. Timely decision making is also a crucial part for best results. How do you Price Such Options? Cisco Packages Avaya packages Inter tel packages $ 550,000 $ 457,000 $ 535,750 The main aspect that needs to be considered is that there is no unit pricing as such but unified communications pricing packaging would depend upon the characteristic needs of customer, budgets and kind of specialized bespoke service that is needed. By far it is seen that Avaya packages are less costly and more efficient than others Again, the ROI could also depend on a plethora of factors, external and internal and is around 8% as per average industry standards. For more efficiently run businesses like CISCO, this could also rise to 10-12% of investments. Finally, coming to the Rate of returns for the new venture, the investors could expect a reasonable rate of return around 6-8% of their investments. It needs to be mentioned that unified communication depends to large extent on external factors like the conduct of Government, role of stakeholders and the influences of internal factors like productivity, profitability, motivation and commitment of the work force which is important for achieving high rate of returns and paybacks for its product lines. Pricing in general is rating the product or service offered.When we are provided with the best thing that is essential in all respects and which duly fulfills our requirements; then the price we are giving for the particular product or service is always add on to the positive side. When business is concerned, what we spent and what we earned out of it matters.The providers of the product or service will rate it, that is the aspect expressing its qualities. The buyers of the product or service will decide whether it is rightly rated or not. As far as a brokerage firm is concerned, it is managing people in addition to the financial services offered for them. In such an industry communication is the essence .Communication must be maintained firmly with adequate responses when and where required. Trust is also very important. If the communication fails, the business will be a failure. The communication within the system and to the surroundings enhances towards the success of the brokerage firm. Since the firm is a midsized one, the adoption of technology of the high-end will be unrealistic. Such sort of a selection is merely based on the quality and will not add on to the progress of the firm. The available options by various vendors need to be carefully diagnosed in all dimensions and the suitable one should be selected. For business, the products they buy or the service they utilize are the investments done in hope of their prospects. The case explains the need of an effective communication system in the firm .Since it is a mid sized the external communication or communication with the external environment is given more emphasis; the clients may be far away. It has been proven that, with the unified communication system; they work productively and produce effective results hence decided to go forth. A Cost Benefit Analysis is done for the appropriate choice.Cost will not be the matter of consent if found reasonable for the right choice fulfilling the needs of the organization. This is because it may cut off the other unnecessary wastage of time, cost and resources of an ineffective system. This never refers that the firm should go for any option .The technology is rapidly changing. To go hand in hand with the movement of the technology and the industry, the firms need to be open rather than conserved .Then it will be quite ease for them to follow the way ahead in their growth. The firm with vendors as Avaya, Cisco and Inter Tel provides unified communication system. They can have all providers as a medium sized firm does. The firm should rate their needs that match with all vendor options. They choose the right one and the choice is not based on the price alone .Hence, it reveals the fact that in industry price is for quality. Reference List Austin, S. N. (2010). Types of business communication system. EHow. Retrieved August 3, 2010, from http://www.ehow.com/about_5611494_types-business-communication-systems.html Damovo: Unified communications. (2009). Data Monitor Research Store. Retrieved August 8, 2010, from http://www.datamonitor.com/store/Product/damovo_unified_communications?productid=25594F3A-A1E8-4FF6-9694-6A10D5BF48C3 Gold book: Technology options. (2003). Voice Data. Retrieved August 8, 2010, from http://voicendata.ciol.com/content/goldbook/goldbook03/103033012.asp How should an enterprise move towards unified communications? (2009). Avaya.Com, p.2. Retrieved August 3, 2010, from http://www.avaya.com/usa/resource/assets/whitepapers/moving%20towards%20uc%20(uc3858).pdf Integrated technology upgradation and management programme. (2010). Indiamart. Retrieved August 3, 2010, from http://exim.indiamart.com/ssi-policies/integrated-tech-upgradation.html Inter-Tel axxess to be discontinued. (2010). PSU. Retrieved August 3, 2010, from http://www.intertel-systems.co.uk/intertel-phones.aspx Moore’s law. (2010). Webopedia.Com. Retrieved August 3, 2010, from http://www.webopedia.com/TERM/M/Moores_Law.html Unified communications/voice solutions: Introduction. (2010). Cisco. Retrieved August 3, 2010, from http://www.cisco.com/en/US/netsol/ns340/ns394/ns165/networking_solutions_packages_list.html Voice over internet protocol providers (VoIP) in the US-industry risk rating report: Industry definition. (2010). Market Research.Com. Retrieved August 3, 2010, from http://www.marketresearch.com/product/display.asp?productid=2734350&SID=46138837-473274703-519412890 Read More