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AAPT Report Series - Telecommunication Trends

This Telsyte report, prepared for AAPT, has been designed to assist Australian Mid-market and large enterprise by offering advice on best practices and trends in telecom technologies.

1. Executive summary
2. Introduction
3. Enterprise voice
4. Enterprise data
5. Enterprise mobility
6. Convergence
7. Conclusions and recommendations
8. Related research

1. Executive summary 

In the current global and local economic downturn, telecommunications is playing a pivotal role as businesses seek to leverage technologies to conduct business more cost effectively and find ways to do more with less. Telecom technologies are undergoing fundamental changes and rapid innovations in three major domains: IP, mobility and convergence. Australian mid-market and larger enterprises (MLEs) are fast tracking and taking advantage of these innovations.

This Telsyte report, prepared for AAPT, has been designed to assist Australian MLEs by offering advice on best practices and trends in telecom technologies. The key findings from this study are:

  • Quality voice service and maximising ROI remain the primary reasons for Australian MLE firms to install and expand legacy enterprise networks, in comparison to a full non end-of-life IP telephony migration proposition.
  • With the emergence of Unified Communications (UC), end-users have been empowered to shape the technology to cater for both their functional needs and streamlining end-to-end processes.
  • While vendors that meet end-to-end customer needs are preferred, UC is a complex ecosystem where no one vendor is able to ‘do it all’. Therefore, decision makers need to evaluate solution based on a ‘best-of-breeds’ approach.
  • The lack of understanding of the business benefits that flow from the technology, has contributed to the slower than anticipated adoption of UC. This can largely be attributed to the failure of businesses to take on an enterprise-wide perspective.
  • Two-thirds of Australian enterprises that use data services within their organisations are planning to migrate their networks to next-generation, IP-based services by 2010.
  • Higher bandwidth requirements, scalability, convergence of voice, video and data services on a single infrastructure, and willingness to deploy IP-based business applications that offer improved business processes and increased productivity, are some of the key factors fuelling the adoption of the next-generation, IP-based services.
  • Corporate Australia’s lack of confidence in next-generation services compared to the ‘triedand-tested’ legacy technologies is impeding large scale transition to the IP-based technologies.
  • In terms of technology penetration, Ethernet dominates the data services market, with almost three-quarters of the businesses that use data services, now using Ethernet services.
  • With one in three of the workforce considered mobile, it is estimated that about half of all Australian employees are now equipped with business mobile devices – either a regular mobile phone, a smartphone and/or a mobile broadband modem.
  • While increased productivity and cost reduction remain the overall drivers of enterprise mobility activities, customer service has emerged as the second most important driver this year, supporting the rise of mobile Line Of Business (LOB) applications.
  • Integration with back-end IT systems has replaced, cost and ROI as the number-one challenge facing Australian firms, which also require a better understanding of mobile technology as they go mobile.

2. Introduction

2.1 Background
This Telsyte report, prepared for AAPT, has been designed to assist Australian mid-market and large enterprise companies by offering advice on best practices and trends in telecommunications technologies. Telsyte defines the mid-market and large enterprise as organisations with between 200-499 and 500+ employees respectively.

2.2 Scope
The topics presented in this report are grouped as follows:

  • Enterprise Voice best practice, technology and trends;
  • Enterprise Data and Wide Area Networks best practice, technology and trends;
  • Enterprise Mobility best practice, technology and trends;
  • Convergence and Unified Communications best practice, technology and trends; and
  • Conclusions and Recommendations.
     

2.3 Definitions

Enterprise Voice

  • Enterprise Communications Market: The Enterprise Communications Market consists of traditional telephony and IP Telephony (IPT) handsets, endpoints, extensions, lines, licenses and system revenue.
  • Traditional Telephony: The Traditional Telephony market consists of traditional PBX systems (TDM) and Traditional Key Telephony Systems (KTS).
  • IP Telephony: The IP Telephony market consists of Pure IP PBX systems and the IP element of an IP-Enabled system. All traditional elements of an IP-enabled system are counted in the traditional telephony market measurement and are excluded from the IP Telephony market.
  • Unified Communications (UC): Telsyte defines Unified Communications (UC) as the intelligent integration of real-time and non real-time communications with business processes based on a consistent user experience across multiple devices and media types.
     

Enterprise Data Networks

  • Legacy Technologies: Legacy technologies refer to older technologies such as Frame Relayand ATM.
  • Next-generation Technologies: Next-generation technologies include Ethernet and IP-based technologies.
     

Enterprise Mobility

  • Business User: Business mobile users are individuals who use mobile phones primarily for business purposes and have more than half of the phone bill paid for by their employer.
  • Mobile Workforce: Mobile workers are defined as employees who spend more than 20% of their time away from the office.
  • Regular Mobile Phone: This refers to all regular mobile phones used for voice communications, messaging, and may include other features such as camera, MP3 music player and Internet access, but does not offer full PDA functionality and has no computer-like Operating System. Regular mobile phones usually feature alpha-numeric (1-0) keypads. Users of regular mobile phones sign up for voice and messaging plans, and may also sign up for data and content packages.
  • Smartphone: This refers to mobile phones running a computer-like Operating System offering full PDA functionality and PC compatibility. They usually feature a large screen with QWERTY keyboard, running such applications as wireless email. Examples of PDA phones or smartphones are iPhone, BlackBerry, Palm Treo, Nokia E61, i-mate, Samsung Blackjack. Users of PDA phones or smartphones sign up for voice/messaging plans and data plans, and may also sign up for additional content packages.
  • Mobile Broadband: This refers to an external mobile broadband modem (either as a laptop PC card or USB) used to connect laptop PCs to 3G high-speed mobile Internet network. Users of data cards or USB modems do not sign up for voice plans, but do sign up for data plans.
  • Femtocell — originally known as an Access Point Base Station - is a small cellular base station, typically designed for use in residential or small business environments. It connects to the service provider’s network via broadband (such as DSL or cable); current designs typically support 5 to 100 mobile phones in a residential setting.

3. Enterprise voice

3.1 Industry Overview

The Australian enterprise telephony market has evolved from being controlled by large traditional TDM telephony vendors such as NEC and Ericsson in the early 90’s to being dominated by ‘new IP’ vendors such as Cisco and Avaya in 2003-2004. Today, as IP telephony is becoming increasingly mainstream and greenfield deployments in the mid-market and large enterprise business market are slowly disappearing, vendors are shifting their focus by offering products to cater for the largest business segment in Australia, the SME market.

Key trends:

  • TDM/Hybrid Telephony solutions are still dominating some sub-verticals, due to the perceived installability of IP based systems. These sub-verticals tend to be within Government;
  • Implementation of SIP trunking at the carrier level to support voice and thereby being able do replace ISDN services, which accounts for over 25% of fixed voice telecommunication expenditure. This is not expected to become available as a standard offering till post 2010, due to vested interests of Carriers in keeping ISDN service revenues going.
  • Migration of private data network services from legacy technologies to more advanced layer 2 and 3 services, such Ethernet and IP/MPLS services respectively;
  • Technology agnostic integration of applications like conferencing, unified messaging, email, fax, Interactive Voice Response (IVR), Automatic Call Distributor (ACD), video telephony, instant messaging, presence management and directory search capability will serve to bolster the proposition for customers to opt for best-of-breed solutions from multiple vendors;
  • The demand for IP phones strongly correlates with that of the IP-PBX market. In addition to this correlation growth, there will be a demand for adding IP phones into the existing installed base of vendors, with significantly less than a one-to-one correlation between phones and lines;
  • Price points of IP phones will continue to steadily decline due to lower hardware prices, advancements in LCD display technologies and volume production;
  • Vendors continue to endorse open Session Initiation Protocol (SIP) standards. This will ensure the interoperability of telephone and messaging equipment between vendors;
  • Replacement cycles of IP-PBXs are expected to be shorter than that of traditional PBXs;
  • Microsoft’s entry into the Unified Communications (UC) market has caused a delay in implementations of UC, as it has raised uncertainty around what is the best of breed. Corporate have adopted a “waiting to see approach” for what Microsoft has to offer, before committing to a vendor solution path; and
  • Uptake of UC is expected to be widespread by 2010 and hence drive the increased uptake of IP telephony in the process, as systems and ecosystem partners facilitate federated access and build a sustainable ecosystem.

4. Enterprise data

Until recent times, voice and data networks have co-existed in organisations. However, the industry trend is to extract maximum value from a converged environment through the use of a single, unified IP-based telecommunications network. Service providers are ramping up their network transformation plans to the next-generation technologies to cope with the increasing number of businesses seeking to shift to these next-generation services, such as Ethernet and IP/MPLS as part of their broader ICT strategy. Australia’s largest service providers, Telstra and Optus, with the launch of their next-generation networks, ‘Next IP’ and ‘Evolve IP’ respectively, have both announced that they plan to phase out their legacy networks over the next couple of years.

Migrating to these IP-based services offers opportunities to enhance and improve business processes, as well direct cost benefits in terms of cost of bandwidth. These technologies offer flexible, cost effective, higher bandwidth services with scalability, to suit growing business demands for dynamic, scalable and converged networks.

4.1. Industry overview

Migration to the next generation technologies is becoming imminent for many enterprises with the increasing use of applications that demand higher bandwidth, scalability and Quality of Service (QoS) from enterprise data networks. As mentioned earlier, these solutions provide:

  • High scalability for cost effectively addressing growing business demands;
  • Higher Bandwidth;
  • Mesh network - any-to-any connectivity and in turn cost reductions;
  • High resilience;
  • Class Of Service (COS) capabilities that enable prioritisation of traffic over the network, which allows operation of multiple applications (e.g. voice, video) on a single converged network; and
  • The ability to support SIP trunking at the carrier level to support voice

Key trends include:

  • The implementation of a single scalable Multi-Protocol Label Switching (MPLS) data network solution augmented by carrier services;
  • MPLS data networks provide the flexible and scalable data environment that is required for the move towards convergence of voice and data systems and provision of improved capabilities for the future delivery of applications;
  • An architecture, which consists of an MPLS core, a Virtual Private Network (VPN) service layer (e.g. Operational VPN, Administrative VPN and CCTV VPN), an Ethernet access layer and end-customer access points;
  • Data networks based on dynamic bandwidth allocation unless specific requirements and capabilities, require an engineered (i.e. dedicated bandwidth) network; and
  • Use of external market capability for all support functions (including maintenance) and dayto-day management. External offerings are compared with internal solutions for improvements in:
  • Value for money;
  • Ongoing innovation capability;
  • Quality of service;
  • Service levels; and
  • Risk management capability.

Benefits sought include:

  • Improved services and reliability for customers;
  • A single unified platform that lends itself to achieving cost efficiencies; and
  • Service delivery to agreed KPI’s.

4.1.1 Price trends
Telsyte research indicates the following trends in the data services pricing within the government sector:

  • Any-to-Any Data Services - government rates have declined modestly by around 2%, whereas Industry rates have declined significantly s by 16-18%; and
  • DSL Services - government prices have fallen by 8% compared to last year. The price reduction for industry, however, is nearly double that rate over the same period.

DATA SERVICES PRICE TRENDS

FIGURE 1. DATA SERVICES PRICE TRENDS, 2005-2008

 

4.2 Wide Area Networks (WAN)
 

4.2.1 Service Architecture

There is still a mix of WAN architectures being implemented by various organisations, in part due to the need to support legacy application traffic and in part due to cost of change over. While a number of organisations have implemented Virtual Private Local Area Network (LAN) Service (VPLS) cores delivered via flat Ethernet access to the sites, others have deployed MPLS networks with delivery over Frame Relay, ATM and/or BDSL.

The choice of the architecture is driven by cost-benefit trade-offs, based on business requirements and constraints such as bandwidth, geographic coverage and cost factors.

Ethernet delivery offers higher capacity, is cost effective and a highly scalable access service. Additionally, Ethernet offers more granular QoS through queuing and Virtual LANs (VLANs) as compared to Frame Relay which is limited in terms of scalability and QoS. Ethernet for WAN access is seen as an extension of the corporate LANs, which are better understood by IT staff. This results in operational management advantages, where existing LAN management skills and system can be utilised to service the WAN.

4.2.2 Ethernet-based networks

Ethernet Metropolitan Area Network (MAN) technology uses other types of transmission services (such as Frame Relay, ATM, IP, Leased Lines) to deliver backbone connectivity. The service provides a high-speed, converged voice, video and data network solution. Additionally, Ethernet VLAN services can provide a high capacity, cost effective and a highly scalable solution. Ethernet VLANs deliver many-to-many connectivity so that all offices can be connected together where the entire network will perform just like a LAN.

Standard CoS Ethernet based MAN/WAN services are typically delivered as (untagged) Layer-2 Ethernet frames. Services are presented on either 10BaseT or 100BaseT Ethernet ports as applicable.

Across the WAN, Ethernet services are typically delivered over the service provider’s IP/MPLS network. Some service providers will use ATM circuits or other technologies.

With a Standard CoS Ethernet service, no handling of 802.1p prioritisation flags will be performed by the WAN. QoS mechanisms will need to be implemented at Layer-3 through the use of router QoS, Packet Shapers or other devices.

Alternatively, Ethernet services are available with a number of premium CoS (available at a price premium). Where this type of service is used, Ethernet Layer 2 802.1p prioritisation flags are mapped to CoS-based Layer 3 services (such as a Premium CoS IP/MPLS service).

Implementing an Ethernet based MAN/WAN environment would however incur significant capital costs as opposed to the existing Frame Relay solution.

Advantages

Ethernet MAN/WAN implementation provides a number of advantages, these typically include:

  • Providing a cost effective high bandwidth, scalable and flexible platform for meeting the evolving needs of enterprises for an incremental bandwidth cost;
  • Providing a resilient platform for ensuring business continuity of mission critical applications;
  • Providing an integrated platform for future voice and data convergence;
  • Increased network performance for internal and external business processes;
  • Reducing direct IT costs through increased manageability; and
  • Scalable MAN/WAN technology.


Disadvantages

Ethernet MAN/WAN implementation also entails some disadvantages, these include:

  • Potential requirement for additional layer-3 QoS mechanisms; and
  • Management of VLANs may require additional IT skills and effort.

4.2.3 IP/MPLS Network

A Multi-Protocol Label Switching (MPLS) network solution provides the same degree of privacy and security as a Frame Relay or ATM transport service without having the same scaling problems and with a lower cost structure. MPLS provides a mechanism for creating any-to-any VPN connectivity and thereby increased resilience. The service provider defines VPN identifiers for different customers. The network labels packets as they enter the network to identify which VPN they belong to. The network distributes routing information about each VPN so that logically there is a separate routing infrastructure for each VPN. This solution eliminates the scaling problems associated with tunnelling and Layer 2 solutions.

Compared to a traditional IP network, whereby each packet’s header needs to be examined at each hop along the way, MPLS provides increased efficiency and speed of data throughput by optimising the packet-processing overhead in the network.

Advantages

IP/MPLS WAN implementation provides a number of advantages, these typically include:

  • Providing a cost effective, prioritised, scalable and flexible platform for meeting the evolving needs of enterprises for an incremental bandwidth cost;
  • Providing enhanced resilience (meshed platform) for ensuring business continuity of mission critical applications;
  • Providing an integrated platform for voice and data convergence (via CoS);
  • Increased network performance for internal and external business processes;
  • Reducing direct IT costs through increased manageability; and
  • Scalable WAN technology.

Disadvantages

A WAN implementation based on IP/MPLS offers a good trade-off between cost and performance and inherently does not suffer from any systematic disadvantages.

4.2.4 Bandwidth management

Policing and prioritisation is typically implemented utilising QoS/prioritisation schemes within routers and / or available within inline packet shaping / packet control measures such as the Packeteer Packet Shaper. The choice is entirely situational contingent. Specialised devices such as Packeteer currently do support a wider range of applications and protocols, as well as more sophisticated policy controls.

4.3 Video conferencing and collaboration

Conferencing and collaboration technologies have always been part of the ICT environment in Australian businesses. Typically, only the audio/video conferencing systems are connected to the telephony system, while collaboration tools are limited to the desktop environment. However, the technologies have broken out of silo operations and are now an important part of complementing other, more established applications and communications systems in delivering end-to-end seamless communication services.

Video conferencing has now become endpoint agnostic. End-users are now able to conference via a variety of devices such as mobile phones, telepresence units and laptops. The technological advancement has enabled conferencing between different devices with different encoding and resolution. This is made possible by having a video conversion conferencing server in the LAN, hence, the ability to convert video properties based on the end device capabilities.

There are generally four main conferencing and collaboration technology categories:

  • Audio conferencing;
  • Video conferencing;
  • Telepresence; and
  • Web collaboration.
     

Audio conferencing

The audio conferencing technologies are very common amongst Australian businesses and can be found in most meeting rooms. Typically, businesses use either dedicated systems from vendors such as Polycom or, increasingly, built-in functionality in the PBX to perform audio conferencing.

Video conferencing

Video conferencing systems are typically used in conference rooms where there are a number of participants. The technology provides voice and high-resolution video quality, but lacks interactive tools and applications. The real-time delivery requirements mean that the LAN and WAN must have QoS and sufficient bandwidth to support the system.

Telepresence

Telepresence is a high definition conferencing system that displays on either 1 or 3 LCD TV screens. Typically the bandwidth requirements of a telepresence system can range from 5Mbps to over 20Mbps. With this level of bandwidth requirements, QoS is of great importance to meet the strict latency, jitter and packet loss requirements.

Telsyte believes that the deployment of a telepresence system would typically require a significant network upgrade, which inturn would require a significant capital investment. However, taking a phased deployment approach by selectively upgrading parts of the network is beneficial in terms of reducing capital expenditure and maximising the ROI. Detailed ICT strategic planning is needed to clearly define technological goals and outcomes.

The technology was designed to simulate a personalised face-to-face meeting experience. The key benefits are:

  • Communicate between multiple locations;
  • Reduce cost of travel;
  • Reduce carbon emission; and
  • Mitigate geographical constraints.


Web Collaboration

Web collaboration technologies can be used both on a desktop/laptop and in mobile environment. It can work both with and without integration with the enterprise PBX. Generally, a collaboration platform contains the following features:

  • Application/Document viewing;
  • Application/Document sharing;
  • Presenter(s) control passing;
  • Hand raising or question submission;
  • Pointer;
  • Annotation;
  • Chat (IM); and
  • Slideshows.


Web collaboration technologies provide a platform for users from different locations and time zones to communicate and offers users the means to work closely together. Unlike telepresence and other video conferencing systems, collaboration tools do not rely heavily on the network bandwidth and QoS. However, end-users should be aware of the differences of access devices such as desktop/laptop and mobile environment to ensure compatibility.

Telsyte observes that currently, businesses are primarily using collaboration as an internal communications tool. This is especially valuable for multinational companies with many global branches. However, Telsyte has detected a trend, where businesses are also evaluating collaboration tools as a means for communicating and interacting with external customers. Using the technology as an external interface can help businesses to extend their reach to current and potential customers. Telsyte has identified the following applications where collaboration tools can be used externally:

  • Remote support services;
  • Product and technical training;
  • Sales and marketing tool;
  • Inter-company meeting and conferencing; and
  • Inter-company project cooperation.

Although there are many benefits to justify the use of collaboration tools externally, it does however add another level of complexity in comparison to internal usage. Apart from factoring in the internal ICT environment and infrastructure, businesses must also take into consideration the ICT constraints of the customers. In addition, businesses should also consider whether the system is simple enough for customers to use. Despite the additional level of complexity, Telsyte recognises that the collaboration tools available in the Australian market today are compatible with most operating systems, web browsers and email systems without significant bandwidth requirements and are fairly easy to navigate.

Unlike telepresence and other video conferencing technologies, collaboration tools can be an on-demand service. Typically, business can either purchase monthly licenses for end-users or select a pay per use arrangement. The benefits of web collaboration include:

  • Ease of use – minimal training required for the use of collaboration platforms;
  • Interoperability with current desktop environment;
  • Hosted service decreases the burden on IT staff;
  • Minimal capital expenditure needed for the use of the service;
  • Manageable costs with per minute or monthly license pricing model; and
  • Minimal commitment required regarding usage and spending.

5. Enterprise mobility

5.1 Industry Overview
Given the vastness of Australia’s geographical dispersion with major business centres scattered across the continent, the Australian workforce is one of the most mobile in the world. Telsyte’s survey results indicate that 30% of Australian employees are considered mobile – spending more than 20% of their time away from the office. Employees in SOHO and small firms (1-49 employees) are the most mobile, while workforce mobility rises with business size for companies with more than 50 employees, as shown in Figure 4.

As would be expected, the nature of a business has a large influence on its workforce mobility. Primary industry (including mining and resources), utilities and transportation, and professional services verticals display the highest levels of workforce mobility. While this substantiates Telsyte’s long held view that it is not for every business, all segments have found at least some niche applications from which they can benefit.

PROPORTION OF MOBILE EMPLOYEES BY BUSINESS SIZE

FIGURE 2. PROPORTION OF MOBILE EMPLOYEES BY BUSINESS SIZE, 2008

Key Trends:

  • Over 50% of mobile calls are made indoors;
  • Fixed to mobile call costs represents over 55% of all call charges;
  • Use of mobile data is growing at over 100% p.a.;
  • Pooling of capped plans within corporate accounts; and
  • Consolidation of the number of mobile handset types deployed within organisations.
     

5.1.1 Price Trends

There have been noticeable price reductions (10%+) for mobile-to-mobile calls in the government sector. Industry figures show similar trends, especially for calls to same organisation mobiles where prices have fallen by as much as 20%.

For mobile-to-fixed line calls, government rates have reduced by 10%, whereas industry rates have increased by 8%.

Mobile data and mobile SMS have also moved. In the government sector, mobile data prices have fallen by 55%, whereas industry prices have fallen by as much as 75%. Government rates for mobile SMS have declined modestly (by 2%), while industry prices have increase by 6%.

MOBILE SERVICES PRICE TRENDS

FIGURE 3. MOBILE SERVICES PRICE TRENDS, 2005-2008

5.2 Mobility Drivers
While internal factors such as increased productivity and efficiency and cost reduction priorities remain as the overall drivers of enterprise mobility activities in Australia, the focus on customer service delivered through mobile communications has emerged as the second most important driver in 2008.

AUSTRALIAN ENTERPRISE MOBILITY DEPLOYMENT DRIVERS

FIGURE 4. AUSTRALIAN ENTERPRISE MOBILITY DEPLOYMENT DRIVERS, 2008

As businesses mobilise beyond the basic applications (email and other horizontal tools aimed at increased productivity and reduced costs) and start to deploy “second wave” LOB applications, external factors such as extending customer reach and competitor behaviour will become primary drivers. Meanwhile, the two main inhibitors to deploying mobility are integration with existing IT systems and understanding of the full future potential of mobile technologies.

AUSTRALIAN ENTERPRISE MOBILITY DEPLOYMENT INHIBITORS

FIGURE 5. AUSTRALIAN ENTERPRISE MOBILITY DEPLOYMENT INHIBITORS, 2008

6. Convergence

Voice, data and video applications are increasingly being delivered over a single integrated network infrastructure platform based on the Internet Protocol (IP) and associated open standards. This is occurring in both the fixed and mobile environments. Figure 11, below, depicts this emerging technology trend.

CONVERGENCE TECHNOLOGY TRENDS

FIGURE 6. CONVERGENCE TECHNOLOGY TRENDS

Migration to a fully converged network has to be strategically implemented, as it is impossible to predict how quickly a specific organisation will migrate. This is because the implementation will be largely based on the provision of positive business cases.

The shift to a converged environment is happening due to the reducing cost of IP Telephony which mirrors the typical cost lifecycle of other high-volume IT components. Where the development costs are high (mainly software) and as the product lines mature, the cost of this development becomes amortised over time, the volumes of hardware shipped increase, and price decreases as volume production methods kick-in (a significant cost of desktop IP telephony is the IP phone itself). In recent tenders, GQ-AAS/Telsyte has observed price parity between IP telephony and traditional, circuit switched provision.

Recognising the trend towards convergence, most traditional suppliers of voice systems have ceased investment in R&D of traditional TDM PABX platforms in favour of multi-service integrated platforms based on IP architectures. These solutions can be integrated seamlessly into existing data network environments at incremental cost.

In voice, there is no price differential between IP and traditional circuit switched telephony, and so the functional benefits of IP telephony make it the preferred solution.

The data architecture which is likely to be offered is VPLS, which allows the data network to be viewed as one Ethernet broadcast domain.

In terms of new services, the market is heading towards a single “pipe” to an organisation that supports voice and data with QoS and IP trunking that bypasses traditional ISDN. However, service providers have been reluctant to offer such services as they will cannibalise their very profitable traditional service and equipment revenue stream. New service delivery models provide fixed price services based on a particular consumption profile.

The provision of extension-level VoIP to the desktop generally requires higher, dedicated capacity to the desktop and additional levels of redundancy, particularly with regard to power supply.

Premises considerations include:

  • Horizontal cabling to Cat 5 or better;
  • Floor switches must be capable of Power Over Ethernet (PoE);
  • Floor switches require protected power, dissipate more heat and are noisier than non PoE switches; and
  • The placement of the handset between the wall plate and the terminal has consequences for desktop support responsibility.

6.1 Drivers

6.1.1 Unified Communications

Australian businesses are at a crossroad in technological change. Available and announced technology has long shaped the behaviour of the end-user, the workforce, CIOs and IT managers. However, with the emergence of UC, the end-users have been given the opportunity to shape the technology to cater for their needs. Hence, the focus of the enterprise decision makers has moved away from:

"How can the technology change the way the organisation functions?"

towards:

"This area of the business needs improvement, how can technology complement business processes and organisational change to contribute to business objectives?”

The drivers underpinning the adoption of UC are still predominately inward focussed, as indicated in Figure 12 below. Consequently, the full benefits of UC still remain largely unexplored.

UNIFIED COMMUNICATIONS DRIVERS

FIGURE 7. UNIFIED COMMUNICATIONS DRIVERS, 2008

Telsyte defines UC as: the intelligent integration of real-time and non real-time communications with business processes based on a consistent user experience across multiple devices and media types. Generally, a UC solution consists of the following components:

  • Telephony;
  • Conferencing and collaboration;
  • Enterprise mobility;
  • LOB application integration;
  • Messaging;
  • Presence information; and
  • Federated access.

Telsyte believes that the technology is only as good as the people who use it. UC should be classified as a people/business process, rather than a technology solution. Therefore, UC does not stop after the technology has been integrated, as it also involves people integration through process re-engineering and change management. The key is to align the technology to the objectives of the business and carefully manage the change involved.

The emergence of UC has created a new ecosystem for telecommunications equipment vendors, IT suppliers, carriers, system integrators and software companies. The relationship between the IT&T community has never been closer. A similar ecosystem is also being formed within businesses when it comes to decision-making. The UC proposition has impacted on the people, IT&T, finance and internal strategies, bringing together the HR department, CIO/IT manager, CFO and CEO to make a collective decision in consultation with line-of-business managers.

There is a definite trend for Australian enterprises to develop UC technology strategies and there are reports of pilot implementations across a range of enterprises. Only a limited number of enterprises in Australia have so far achieved full integration of communication environments. This take-up should change over the next few years, subject to stabilisation of the economic climate.

As a specific example in transport sectors this will include:

  • Improvements in consumer journey planning;
  • Mixing car and public transport planning for easier Dive and Ride journey integration;
  • Spatially distributed devices with event sensors – each with a transceiver, power source and controller;
  • Increased use of sensors for monitoring, reporting and control as prices drop;
  • Adoption of more GPS functionality and Internet access; and
  • Increased availability of applications using sensors to identify and alert to environmental changes, movement detection, disaster alert and avoidance.

6.1.1.1 UC Planning and Deployment Best Practice

MLE businesses that have deployed UC typically have a narrow initial scope, such as initial trial for a particular department or job function. Businesses are taking a strategic view in planning for the wider organisation, but are taking a phased or pilot approach in deployment for single departments. This approach ensures business continuity and enables hard and soft ROIs to be measured before committing to a large capital expenditure.

Typically, email applications, such as Microsoft Outlook, become the primary UC interface for the workforce. The reason is the ubiquitous nature of this horizontal application and staff of all levels of technical competency are generally able to use an email application. Office and productivity applications e.g. Microsoft Word/Excel are also seen as candidates for integration with the PBX. The logic for this is similar to email applications.

From the evidence above, it can be seen that most Australian businesses are still concerned with unified messaging and have yet to fully deploy a UC solution. To fully realise the benefits of UC, businesses need to consider the following:

  • Mobility with integration to PBX and messaging for sections of the workforce e.g. Sales;
  • Device agnostic access to voicemail, email and instant messages;
  • Integration of appropriate LOB applications with PBX, messaging and mobility services;
  • Appropriate collaboration and conferencing functions for relevant endpoints;
  • Rich presence available and reported on all endpoints; and
  • Federation with external customers and suppliers.

6.2 Challenges and risks

A number of challenges and risks exists in deploying UC, they typically include:

  • The business requirements need to drive the technology solution implemented;
  • Full benefit realisation can only be achieved with process re-engineering being executed in parallel;
  • Increase in network complexity and management;
  • ROI analysis needs to take into consideration both direct and indirect (e.g. customer retention) benefits;
  • Significant capital outlay and an increase in OPEX in the short-term;
  • Training of IT and general employees;
  • Development and integration of LOB applications; and
  • Interoperability between multiple communication systems and platforms, both internal and external (i.e. federated access).

7. Conclusions and recommendations

7.1 IP and Unified Communications

  • If there is no specific business process re-engineering or productivity improvement initiative that can be coupled to an implementation of IP telephony. It should be implemented as part of the replacement cycle and evaluated from a cost benefit perspective.
  • If an organisation is transparently unable to justify an investment decision for IP telephony, ensure that the business case adequately captures the full benefits that UC can offer. UC is more than just a technology – UC has significant impact on the people, IT&T systems, functional departments and management processes. Therefore, the evaluation and implementation requires collaboration between the HR department, CIO/IT manager, CFO and CEO to make a decision in consultation with line-of-business managers. The planning of UC must occur at a strategic level to take into account all the stakeholder groups. This is a complicated process and decision makers should seek assistance from vendors, service providers and consultants to tackle the problem at all levels.
  • Technology is only as good as the people who use it - Users must be trained, processes need to be re-engineered and an organisational culture shift is required to fully realise the benefits of UC. Consider engaging the solution provider to deliver training as part of the solution and include training requirements in the Request for Tender and contract. An alternative is to manage independent specialists to conduct a structured training and education program for the key personnel and the general workforce.
  • UC is best implemented bottom-up in a phased or departmental approach, with an overall top-down governance framework, to ensure alignment of business needs and technology solutions. Select a few business processes that can clearly benefit from UC (e.g. sales and customer service, field service and HR) fine-tune them and scale from there. Initially, accept a narrow scope for UC deployment and focus on business areas where UC can have the highest positive business impact.

7.2 Enterprise Data Networks

  • Migrating to IP-based services offers opportunities to enhance and improve business processes, leverage economies of scope (voice, data and multi-media services) to achieve cost optimisation.
  • Take a phased approach to transforming the enterprise network to next-generation technologies, that encompasses leveraging existing assets, which and in turn lowers the Total Cost of Ownership.
  • Ethernet appears to be the technology of choice predominately for point-to-point solutions, as it offers a number of advantages over legacy technologies, but as organisation size and distribution scales IP/MPLS becomes far more superior. The most sought after of these advantages is the scalability of high-bandwidth connectivity at lower costs. Before deciding on a technology it is important to take care to understand the underlying business requirements and the associated cost benefit trade-offs that each technology offers.
  • Service provider selection processes should be rigorous. They should be based on weighted criteria which should include the experience of the provider in servicing clients in the same industry, service performance specifications, service delivery capability and provider’s network infrastructure capability.

7.3 Enterprise Mobility

  • Organisations cannot wait for multiple mobile technologies to converge, if they want to gain a competitive edge using mobility. Therefore, they should standardise within their own organisations having regard for the practices of their major customers and external partners. Standardisation must be done on all fronts, from carrier and technology choice to device and OS choice to solution choice.
  • Take advantage of hosted mobile offerings where applicable. Many mobile applications can be hosted off-site. This includes application pilots to familiarise users with mobility without overburdening internal IT resources or over investing.
  • As mobility becomes more integrated with business processes, it must be provisioned and implemented as a part of the overall corporate IT plan. As with UC, mobility solutions are best implemented bottom-up, in a phased or departmental basis, with an overall top-down governance framework.
  • Many business users are already deploying personal applications, like instant messaging and social networking, on their business mobile phones. While there is a need for centralised management of such solutions, there will also be an opportunity for businesses to piggyback these applications as the basis for enterprise converged services in the near future.

8. Related research

Australian Business Enterprise Communications Usage and Directions, 2008 End-User Survey, July 2008 (Publication Number 80488)
Australian Business Fixed Line Usage and Directions, 2008 End-User Survey, July 2008 (Publication Number 80486)
Australian Mobile and Wireless Usage and Directions, 2008 End-User Survey, June 2008 (Publication Number 80487)
Australian Telecom and Fixed Line Market, 2007 Review & 2008 – 2012 Forecast, March 2008 (Publication Number 80476)
Australian Mobile Market, 2007 Review & 2008 – 2012 Forecast, March 2008 (Publication Number 80477)
Australian Enterprise Telephony Market, 2007 Review & 2008 – 2012 Forecast, March 2008 (Publication Number 80478)


 

 

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