VoIP rollout could make or break a CIO’s career

26 Oct 2004

Over two-thirds of the 2,000 largest companies in the world will have started deployment of voice-over nternet protocol (VoIP) to the desktop by 2006, citing cost reduction and flexibility as key motivators, according to a survey conducted by Deloitte.

According to the report, the overwhelming driver for VoIP amongst respondents is cost reduction. 84pc of companies polled regarded cost reduction as a key driver. Beyond cost, VoIP has the potential to transform enterprises’ call centres, offshoring operations and telecommuting tools. The survey finds 79pc of early VoIP adopters are either ‘mostly’ or highly ‘satisfied’ with the technology to date.

While 26pc of survey participants have already deployed desktop VoIP, only one-third of these companies have offered it to all employees.

“The initial performance of desktop VoIP was generally poor, with voice quality significantly inferior to that from existing analogue systems,” said David O’Flanagan, a local partner in Deloitte. “However, the offering has improved markedly with the falling price of VoIP equipment, rising call quality, improving functionality and the growing experience of service providers.”

“Organisations must balance the implications of VoIP on costs, alongside its impact on organisational efficiency and performance. It is an important new technology, which has the potential to deliver cost and efficiency benefits to companies that deploy it wisely. But it must be applied sensitively, since its disruption potential is still substantial.”

The Deloitte report argues that the deployment of a VoIP in the years ahead will prove vital to the career progression of CEOs, COOs, CFOs and CIOs.

For CIOs, Deloitte believes that VoIP is a major issue that can make or break a CIO’s career. Deployment would improve control and efficiency and allow closer integration with other business applications. However, it would also drive up usage on a data network and create more work for the IT department. “The CIO must deliver a VoIP deployment that delivers a strong net benefit to the enterprise,” Deloitte warned.

For CEOs a successful deployment of VoIP could improve the organisation’s total competitiveness, lowering the cost base and improving productivity. Conversely, a flawed deployment can paralyse the organisation, bringing both voice and data communications to a grinding halt. “The CFO must ensure the VoIP business case is balanced to reflect the full costs and benefits,” says Deloitte.

For the CFO, enterprise-wide VoIP deployment can significantly reduce the cost of voice communication and improve cost control, making voice usage and administration costs more predictable and easier to forecast. A strategic implementation can also improve the top line by making staff more productive. “The CFO must ensure the VoIP business case is balanced to reflect the full costs and benefits,” the report argued.

And for a firm’s COO, Deloitte believes a well-deployed VoIP system can streamline processes in every department from sales to customer support. “It can also improve efficiency across the enterprise by enabling greater integration between information systems and voice-based applications. However, most organisations cannot afford to have their voice systems fail. The COO must guarantee continuity,” the Deloitte report urged.

“VoIP may eventually become a standard communication technology that does not require a moment’s thought,” added O’Flanagan. “But today, it still requires careful consideration. Decision-makers need to bear in mind the telephone’s standing as one of the most critical business tools. Both clients and employees are far less tolerant of a malfunctioning phone system than they are of IT breakdowns. VoIP requires new systems, new equipment and new skills – all of which require investment, deployment and training.”

By John Kennedy