Government IT Managers Share the Facts on VoIP

In the last few years, competitively priced, production-ready Voice over Internet Protocol (VoIP) products have captured the interest of local governments, including managers in Nevada County, Calif.; Stanislaus County, Calif.; and Durango, Colo. Here’s how the respective managers of these municipalities evaluated their existing technology and the available options, and then cut through the hype surrounding VoIP to realize significant savings and efficiency.

Talking Points

In Nevada County, the aging private branch exchange phone system was causing headaches for Bill Miller, desktop services manager. The county had dropped its expensive maintenance contract on the PBX. Consequently, when Miller needed a part for the telephone switches, he had to go to the “junkyard” to find it. On top of that, only one other technician on his staff understood the PBX system.

Miller knew it was time for a change. After doing some research, he decided to implement a VoIP solution. There were a few initial glitches, but after changing some of the settings that affect the handshake and timing between lines, he says the system “ran beautifully.”

Now, several years after Miller’s team completed the VoIP implementation, Nevada county citizens reap the financial benefits. Using VoIP technology halved the cost of wiring closets and slashed the cost of hardware maintenance, power, air conditioning and square footage in the data center.

Miller also added VoIP monitoring and remote management. By tracking call patterns to see where the county was spending the most money on long-distance service, he was able to install network switches to keep VoIP calls within the intranet and avoid charges incurred when calls use the public switched telephone network.

“We have VoIP in almost all our sites,” Miller says. “It’s a solid system, more solid than our legacy system was.”

A Business Approach

As a careful steward of taxpayers’ money, Stanislaus County CIO John Emerson applies a business approach to all technology installations. He emphasizes that the county’s decision to implement VoIP technology was part of its overall strategy.

Stanislaus County laid out a plan to implement VoIP in stages and to replace the old PBX system over the lifetime of the project. The county recently began a VoIP pilot in two departments with 40 phones. After 90 days, it will evaluate the program before beginning a larger-scale implementation. At press time, the pilot program was being integrated with the legacy system and operating smoothly. Emerson anticipates completing the VoIP pilot project in approximately two years.

In Durango, Colo., analog PBX systems at City Hall and the police department were maxed out, and charges for the old system were set to increase significantly when the contract expired in December 2005. So a team was created to investigate alternatives. It included Eric Pierson, the city’s IS manager; Karen Herman, Durango’s purchasing agent; and a local professor who helped several universities with VoIP implementations.

The team determined that replacing the old system at 13 city locations with VoIP running on fiber or wireless networks would cost about $335,000, including equipment, installation and training, and would result in a net savings of $150,000 over five years. It also would add Caller ID, four-digit dialing citywide and expanded voice mail capabilities.

City officials were convinced of VoIP’s financial benefits, but were concerned that phone service would be disrupted every time the network went down. However, Herman explained that because voice and data run separately on a converged network, the VoIP system would not be affected if the data side went down.

In June 2004, Durango’s city council approved the measure.

“We went through the migration process for about six weeks, and I would rate it at eight out of 10,” Herman says. “We did one building at a time, taking care of the little bugs.”

Talk About Benefits

Since Nevada County switched to VoIP in 2001, the technology has resulted in about $1.5 million in savings on long-distance and hardware costs, says Miller, who adds that the system has already paid for itself.

The move to VoIP will also reap savings for Stanislaus County, enabling it to eliminate more than 1,500 phone lines. But return on investment isn’t measured only by the balance sheet, Emerson points out. It’s also measured by service improvements to the county’s citizens.

“VoIP provides us with the ability to do things we couldn’t before,” he says. “And there are improvements in our business processes.”

Durango also anticipates savings on phone lines. “Before, our average bill for just the copper lines was about $7,000 a month,” Herman reports. “That will be reduced to between $2,500 and $3,000.”

The system also will provide increased ease of management. With all 13 city locations’ phone and voice-mail systems on the network, the staff will be able to administer the system from any PC on the city’s network.

But the best reason to consider VoIP, says Jeff Snyder, a VoIP chief analyst at Gartner, a research firm in Stamford, Conn., may be long-term system viability. Availability of traditional PBX/KTS (Private Branch Exchange/Key Telephone Switch) voice systems is declining. While sales of pure IP-PBX systems reached $818 million in 2004 and are expected to hit $1.04 billion in 2005, says Gartner, sales of traditional systems will drop from $1.5 billion last year to an estimated $979 million this year.

Proceed With Caution

Last June, IT research firm Forrester of Cambridge, Mass., rated VoIP one of the top 10 new technologies for state and local government. However, security and regulation issues still exist.

“Security Considerations for Voice Over IP Systems,” a January 2005 report from the National Institute of Standards and Technology (NIS T), raised concerns in government quarters.

However, D. Richard Kuhn, one of the report’s authors, explained that the document was not meant to stop VoIP implementations, but to help agencies to secure these installations.

One point the NIST report made clear was that because VoIP requires a higher quality of service than data does, security measures such as conventional firewalls are not adequate.

A lack of standardization complicates matters further. “Current VoIP systems use either a proprietary protocol, or one of two standards: H.323 and the Session Initiation Protocol (SIP),” according to the report. Although SIP seems to be gaining in popularity, neither of these protocols has become dominant in the market yet, the report states, adding that it often makes sense to incorporate components that can support both protocols. The report also advises being very cautious when integrating wireless VoIP products.

“Designing, deploying and securely operating a VoIP network is a complex effort that requires careful preparation,” the NIST report states. “There is no easy one-size-fits-all solution.”

Herman, Miller and Emerson agree.

“You need to know what your specifications are, what your timeframe is for doing this and then make sure that you are working with a reputable company,” says Durango’s Herman.

Another critical component is infrastructure, according to Nevada County’s Miller, who adds, “I can’t emphasize it enough.”

“Everything has got to have business approval,” concludes Emerson of Stanislaus County. “With VoIP, there appears to be a business case.”