Why going slow on VoIP adoption can be a good move

Despite the hype surrounding VoIP and the technology’s proven benefits, some organizations are still taking baby steps toward converged networking.

One such outfit is Baptist Health Medical Center in Little Rock, Ark., which has 8,000 phones, but only 240 IP ones.

“I just can’t see us going up on one floor and saying we’re taking out all of the TDM phones and putting in IP,” says John Myers, convergence analyst at the medical center. “To go in and change everything out just to be changing it just doesn’t make sense.”

That’s even though Myers is well aware of what VoIP promises: a converged, cost-efficient infrastructure and new productivity-increasing applications. There are no shortage of early adopters, from Bank of America to Black and Decker, which laud the benefits of VoIP and unified communications.

The trends are clear: In 2007, IP PBX revenue grew 29% to US$1.6 billion and line shipments grew 32%, according to Dell’Oro Group.

Dell’Oro expects IP lines to surpass digital and analog PBX lines for the first time by year-end. By contrast, TDM PBX revenue declined 20% to about $1 billion in 2007, Dell’Oro found.

Still, Baptist Health says a measured transition to VoIP makes the most sense for it, and there are lessons to be learned from its approach.

Most of Baptist Health’s 8,000 phones are located in a 15-floor building in Little Rock, but the medical center has eight sites overall. As it moves offices or builds new facilities, it will outfit those desktops with IP phones, Myers says.

“We never made a decision to forklift everything out and replace it with IP, but as departments moved or are added or if we buy up a clinic across town — if we feel it’s a good candidate for IP that’s what we do,” he says.

Baptist Health’s slow move to VoIP began with a 15-phone trial two years ago. The medical center is predominantly a Nortel shop and it deploys the vendor’s Communications Server 1000 IP PBXes and 1140E IP phones, as well as its analog and digital PBXes and phones.

The hospital embarked on its VoIP quest in an effort to reduce cost. Myers figures the medical center can save money on expense of cabling new facilities by running voice over the IP data network instead of nailing up a separate voice network every time a department moves or is added.

“We built a brand-new hospital last year and put half of the phones in that facility as IP,” Myers says. “We were able to drop one cable, plug the phone in there and run the PC off the back of the phone. That’s the biggest thing for us.”

The 1140E phone includes a Gigabit Ethernet PC port on the back.

Myers also says the VoIP phones are easier to manage because he can monitor them from a central location with the tools he uses for the data network instead of performing onsite maintenance and troubleshooting of the medical center’s traditional PBXes.

But so far, cost savings have been hard to quantify given that only a fraction of the health center’s phones are IP. Also, the IP phones are significantly more expensive than the traditional TDM phones, he says.

The average sales price of an IP phone at the end of 2007 was between $150 and $200, according to Dell’Oro. Meanwhile, a basic TDM business phone can cost as little as $20.

“We’re just now getting started so we haven’t seen a significant cost savings,” Myers says. “Until we do a big, big project and can really get a grasp on the money that we’re saving on the front end, we’re probably not even realizing it.”

But it’s cost savings that drove Baptist Health to VoIP, not the spiffy new unified communications and collaboration applications IP telephony spawns by way of converging voice and data and video (Compare Unified Communications products). Indeed, Myers says his organization currently has no burning need to even evaluate the new unified communications offerings developed by Nortel and Microsoft under their Innovative Communications Alliance. “There’s not been any talks [internally] of using anything like that,” Myers says.

The medical center is not even running Session Initiation Protocol (SIP) in its VoIP environment. H.323, a protocol defined by the International Telecommunication Union in the mid-’90s for ISDN videoconferencing transmission and session setup, fills the bill for VoIP call signaling, Myers says.

Even though Baptist Health isn’t too far along on its VoIP journey, Myers has learned a few things worth sharing with others who are even less far along.

One caveat to implementing VoIP, the medical center has found, is making sure there’s enough network capacity. Myers recommends conducting a network audit to determine if a significant — and expensive — upgrade is necessary to support IP telephony requirements.

In addition to bandwidth, the audit should determine whether or not a network requires specialized QoS extensions or configurations. These, too, can be expensive, time-consuming or both — and if not added or configured properly, voice quality can deteriorate.

Ample bandwidth may be all that’s required, Myers notes.

“We have plenty of bandwidth in the locations where we’re running IP,” he says. “We’re running a DS-3 into a new facility so bandwidth is not really a problem. Some of the other facilities we have a [gigabit] ring that goes between four different facilities, and some of those are running IP as well.”

Myers also cautions on mixing VoIP with older analog systems. Baptist Health had one facility where the only trunking option available from the phone company was analog.

“Our VoIP phones did not work well over analog trunks,” he says. “We got a lot of echo and feedback. We ended up replacing them with traditional TDM stuff.”

Security has not been an issue, Myers says, but then again only a fraction of the medical center’s phones are IP.

And even though Baptist Health’s chief motivation for implementing VoIP is cost reduction, Myers acknowledges that ROI so far has been inconsistent.

“The phones are quite a bit more expensive so that’s always a challenge — trying to justify that,” Myers says.

At one facility, Baptist Health is waiting for some T-1 contracts to expire before transferring voice to the IP network. Even though the medical center would realize immediate savings from the elimination of those T-1s, VoIP equipment costs would push ROI out three years, he says.

Meanwhile, an MRI facility that closed down had almost instantaneous ROI because Baptist Health could deactivate an extraneous $4,000 per month gigabit link and eliminate a PBX.

“In one month, it cost half that gig pipe to put IP phones out there,” Myers says. “It just depends on the facility.”

And the success of a VoIP implementation — even the decision whether to implement VoIP — is customer or vertical market-specific in the end.

“You have to be careful in the healthcare environment,” Myers says. “We were cautious anyway because the reliability of IP phones, [but VoIP has] saved on cabling cost.”

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