Darren Grile of Anderson Municipal Light & Power slashed telecom spending while enhancing calling features with Voice over IP.

Talk of the Town

Municipal utility deploys VoIP to enhance call features while reducing monthly phone bills.

When an automated meter-reading project came in under budget, the city of Anderson, Ind., had the seed money to fund a new Voice over IP system to support more than 20 municipal buildings. That much-needed investment immediately paid off by generating quick savings.

Anderson spent $667,000 on a Cisco Systems VoIP system that provides a wealth of features, including unified messaging, presence and video conferencing, says Darren Grile, network supervisor for city-owned Anderson Municipal Light & Power. The city was able to go forward with the VoIP ­rollout because the IT department demonstrated that the project would immediately reduce Anderson's monthly phone bills.

Equipment Obsolescence

Before the rollout, notes Grile, Anderson had relied on Centrex service for 12 years, at a cost to the city of about $11,000 a month; today, the monthly phone bill runs in the $3,000 range -- a savings of more than $90,000 a year. At that rate, if Anderson keeps its new phone system for 12 years, the estimated long-term savings will approach $500,000. "It's a long-range savings project," the supervisor says.

The deployment was initially a hard sell, says Bruce Boerner, Anderson Municipal Light & Power superintendent, "because it's difficult to spend money in these economic times. But we were going to have to spend some money sometime soon because we had such old technology."

$30
Average monthly cost per Centrex line, which equates to $3,000 to support 100 phone lines

A new fiber optic network (Anderson recently finished deploying fiber to all of its municipal buildings), coupled with IT staff expertise, made the VoIP project feasible. "We were doing the fiber optic network for several other projects, like automatic meter reading, but we had this VoIP project in the back of our heads," Grile says. "There was several years' worth of forethought to get us to this point."

Anderson IT staff evaluated solutions from four manufacturers, but ultimately chose Cisco for its VoIP hardware because of what it heard from users about the products' reliability and dependability.

Do the Math

The AT&T Centrex system that Anderson used before the switch to VoIP included voicemail but did not have other modern features such as Caller ID or call forwarding. In addition to the high monthly bills, there were the costs for adds, moves and changes, and for customization of features.

Today, rather than paying Centrex charges, the municipality relies on T-1 lines to bring dial tone to the VoIP network. "The cost to do T-1 lines is significantly less than the Centrex cost," Grile says. "Also, if you wanted to move a phone from one office to another, you were hit with a sizable fee" under the old system. Now, the user just unplugs a phone and moves it.

Andrew Short, the CDW·G technical lead on the Anderson VoIP deployment, says Centrex users typically experience substantial savings when they switch to VoIP systems.

"Anytime you walk into a situation where someone is paying month-over-month charges on all those Centrex lines, it's a situation where it is really easy to prove the ROI of a VoIP system," he says.

$500
Typical monthly cost for a single digital PRI line

Grile anticipates that in "just a little bit over four years," the city will have recouped the capital expense of purchasing the Cisco hardware and software, adding that some of that expense "was because we had to pay penalties to the phone company for breaking a contract with them."

A Good Call

Last fall Anderson began deploying the VoIP system in four phases. The final phase was completed this summer when IT rolled out the VoIP system in the city's police and fire departments. Before installing the gear in these departments, Grile added back-up power generators to provide extra reliability.

Grile chose a staged rollout because the city managed the installation internally. "Getting everybody up to speed has been a challenge," he says. "There are so many details with a project like this, and I think doing it in smaller steps like we have done has kept us from running into a catastrophe."

Users appreciate the new features, especially caller ID, presence and improved call-center features. The Cisco system also offers weather information and the ability to send citywide emergency alerts.

"Simple things like transferring calls are much easier -- it's idiot proof," Boerner says. "I can get our local weather so I can know if a storm is coming in right on my telephone."

He adds: "Comparing the old phone system to the new one is like comparing a bottle rocket to the space shuttle."

What's more, the electric utility has improved customer service by doing a better job answering hundreds of calls per day from residents who have questions about their bills.

"The way it was set up on the old Centrex system, we had nine people answering phones in a row. Heaven help the first person in the row," Grile says. "We had a lot of missed phone calls, especially during the busy time of the month."

Now calls are distributed in a circular pattern. "It's a much better balance and less frustrating for the people answering the calls."

The only drawback to the VoIP rollout for users has been getting used to the high-definition sound on the IP phones, which pick up more background noise. "We are so accustomed to the voice quality of a standard phone that anything different sounds a little weird. But once you get used to the high-definition sound, it's really nice," Grile says.

Key Components

The new VoIP system in Anderson, Ind., comprises:

Chris Bucher
Sep 22 2010