S.T.C. Inc. Telecommunications


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S.T.C. Inc. Telecommunications

Improvement and Cost Cutting Effort













Outline

·     Introduction to IPT ( IP Telephony)


·     Trends in IP Telephony


·     Cost Savings Model

·     Cost Saving Description

·     Cost Savings Chart

·     Cost saving Comparison

·     Annual Estimated Savings


·     IPT Structure and Vendor

·     Infrastructure

·     IP Phones

·     Call Manager

·     Voice Applications

·     Graphic depiction


·     Migration and coexistence


·     Conclusion




S.T.C. Inc. Telecommunications Improvement and Cost Cutting Effort


Introduction
This is the initial feasibility study for the upgrade of the S.T.C. Inc. (Small Technical Company Incorporated) network in conjunction with the office move. The purpose of the study is to evaluate the upgrade to be done on the telecommunications system recommending the most cost effective solutions on the market today. After this report a project will be started to implement the recommended solution. The deliverable for this paper will be an implement able cost effective telecommunication solution. S.T.C. Inc. will acquire the hardware necessary to support and run the new system and programming changes will be performed by outside vendors. Internet Telephony Service Providers (ITSP) may use a single infrastructure for providing both, Internet access and Internet telephony. Only data-oriented switches could be deployed for switching data as well as packetized voice. Multiplexing data and voice could also result in better bandwidth utilization than in today's over-engineered voice-or-nothing links. (www.iptel.org), 2004. The business benefits of this type of infrastructure are increased productivity, grater business flexibility and reduced operational costs. (www.cisco.com),2004

Trends in IP Telephony
IP telephony is the technology for transmitting voice communications over a network using IP open standards and it uses a single network for the transmission of data, voice and video. There are currently many devices which use similar technologies to accomplish this tasks. Companies in today’s economy are looking for ways to reduce the cost of doing business and IP telephony provide this opportunity. IP telephony will continue to see tremendous activity and make incredible gains in the enterprise space. Until the service providers work their way through all that excess inventory, and are once again ready to research new technology, you can rest assured that next-generation telephony will be busy gaining traction in the enterprise market.(www.tcnet.com,2004)

Cost Savings Model
Analog and digital based phone systems that use a different set of communication protocols but similar cables to connect to a POP (Point Of Presence) are a very familiar site. These are present not only in home setting, but also in large industrial and office application.
These applications in a very large scale are very expensive not only to maintain but also for the reoccurring cost associated with the monthly usage and fees charged to the customer by the service provider.

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A good example of these cost is Long Distance charges.
The most significant benefit of IPT and driver of its evolution is money-saving and easy implementation of innovative services (www.iptel.org/info/), 2004 and the following model was created using this premise. The table illustrate the actual cost of conventional telephony based on company history and the savings for phone to phone installation. The rates used in the calculation are the standards for both industries. Costs charged by IPT operators.(~ 7 cents per minute to the U.S. in August 98) and Cost charged by conventional operators (~ 25 cents per minute to the U.S. in August 98). (www.iptel.org/info/), 2004

           S.T.C. IP to Conventional Telephony Comparison           
     Port Cost Installed     *Minute Usage     **Port #     Cost/Min      Cabling cost     L.D. Cost     Totals
                                         
Conventional      $ 350.00      92500     100      $ 0.25       $35,000.00       $23,125.00       $58,125.00
IP      $ 350.00      92500     0      $ 0.07      $ 0.00       $6,475.00       $6,475.00
                             Savings      $16,650.00       $51,650.00
                                   
Equipment Cost is Calculated at 0 since all the equipment is to be purchase new before the move
* Minute usage is the monthly average for 100 users.               
** No ports are needed because IPT uses the same port as data           

     The cost saving is substantial not only in the reoccurring cost category ( $ 16,650.00) but also in installation ( $ 35,00.00), these two combined will save the S.T.C. a total of $ 51,650.00. For the first year the estimated savings will be of $ 135,825.00 and $ 77,700.00 for every subsequent year.
IPT Infrastructure and Vendor
     The vendor chosen for this implementation was Cisco Systems due to the experience the company has in the field with this kind of applications. The benefits of introducing Cisco's IP telephony infrastructure include a rapid deployment and more coherent support for a consistent set of desktop services and new applications - which fulfill many of the requirements for enabling increasingly flexible working patterns.(www.newsroom.cisco.com), 2004
     The Cisco IPT solution is shown with a graph in Figure 1 and has four primary components:
·     Infrastructure: that includes public telephone network gateways analog phone support, and digital signal processor.
·     IP Phones: IP phones combine the functions of a traditional telephone with Ethernet connections.
·     Call Manager: This software-based call processing agent extends enterprise telephony features and functions to IP phones.
·     Voice Applications: Voice applications, such as the one for S.T.C. Inc., are physically independent from the call processing and voice processing infrastructure. (www.cisco.com),2004





Fig. 1

This graph shows a Single cost-effective multi-service network that includes the IP telephony and related hardware, this is more detailed than the four steps described on the previous paragraph and depict the actual hardware needed in more details. This creates a Customer interaction network. The customer interaction network is a combination of strategy and architecture that empowers the efficient and effective customer communications across an enterprise-wide, globally capable, highly available, distributed network that can deliver any application to any resource in any medium anywhere (www.cisco.com), 2004. It offers superior flexibility by enabling our company to draw from a broader range of resources to service customers, including access to an unlimited pool of agents and multiple channels of communication, including customer self-help tools. This creates a perfect platform for a ground floor implementation that can be upgraded for years to come with minimum hardware cost, therefore making this even more palatable to investor and officers of the company looking for ways to improve the bottom line.

Migration and Co-existence
     Deploying IP voice telephony in an existing site requires a clear migration path from legacy equipment to the new IP based system, therefore this is the best time to focus on the end to end process of migration to ensure a smooth transition from analog (PBX) technology.
The legacy system can be kept in operation until the IPT system is fully functional and tested because is very complicated to retire legacy voice equipment, and a bad migration could severely impact the business. For this reason five important areas must be considered while planning a system switch over. (www.cisco.com/go/interoperability/),2004
1.     The pace, order and approach to deployment
2.     IP infrastructure readiness
3.     Feature transparency and interoperability between the IP system and the analog system.
4.     Movement of data from legacy components to IP components
5.     Business processes and training associated with support of an IP-based communication system.
The vendor chosen should provide a range of tools and services to assist S.T.C. Inc. with the new system deployment. S.T.C. Inc. should be able to move forward more quickly and with reduced risk, eliminating, at the time of the move, the reliance of the legacy technology and accelerating the full implementation of the IPT gaining all the benefits without the risk of a full blown migration and the problems of switching live systems without loosing connectivity or worst valuable data. This is another reason why the best time to implement a new solution is now, during the move, only allowance that needs to be made is a timely move to allow for both system to be live and while performing a simple network swing the migration will be completed.

Conclusion
     The days of the analog PBX are numbered, even the best analog systems are nearing the end of their life cycles, with a very large percentage of manufacturer discontinuing product line in favor of IP telephony replacements. Switching from the PBX to a voice-enable data system network is not straight forward as calling up a supplier. (Anderson, Kailem, October 2004) Even with the complication in the migration from analog to IPT, the savings are so overwhelming that even without a seamless transition the upgrade make sense. With yearly saving of up to $ 77,700.00 a year and savings of $ 135,825.00 for the first year, the upgrade make a good business decision. Added to this the elimination of risks, because of the limited migration needed due to the location change the IP telephony switch just make good business sense, and it provides a great return on the investment.
S.T.C. Inc. with the deployment of a IP Telephony Communication system will realize a measurable ROI, as proven in other customer deployment by the same vendor. S.T.C. Inc. can also save money by the reduce equipment cost and maintenance on average the cost is reduced by 40% compared to a traditional or legacy PBX system. (www.cisco.com/en/us/netsol/ns340), 2004 Network administration cost are also reduced by improving the productivity of the network staff, by combining the Voice team in one single coherent and more efficient work group. For all the reasons above and the future upgrade capabilities the choice of a Voice Over IP solution should be considered and chosen.



REFERENCES

Galitzine, Greg , The Leading Trends in IP Telephony. Retrieved on October 11, 2004 from
http://www.tmcnet.com/it/0302/0302sf.htm

What is Internet Telephony. Retrieved on October 18, 2004 from
http://www.iptel.org/info/

Bluck, Emma, Nestlé Makes Cisco IP Telephony a Standard for its Global Voice Infrastructure. Retrieved on October 18, 2004 from
http://newsroom.cisco.com/dlls/2004/prod_021604.html

Cisco IP Telephony Solutions. Retrieved on October 18, 2004 from
http://www.cisco.com/en/US/netsol/ns340

Andrson, Keilem, Avoid the pitfalls. Retrieved on October 6, 2004 from
www.comnews.com



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