What’s the most important piece of equipment in any business? No argument: the phone. As one consultant puts it: ‘For about three generations now we think we have a God-given right to a dial tone’. The mobile phone just slotted firmly into place in the same way that even small firms expect to be able to hold or transfer incoming calls and individual voicemail is now fairly basic. Through it all, we expect our telephone networks and our instruments to work all the time, every time. Which is more than most of us would dream of assuming about computer systems!
The principal interaction that businesses have with most of their customers and suppliers is on the phone. But does choosing phone systems in a smaller business actually ever get the depth of investigation, independent advice and above all the budget that this primacy of importance should-logically-command?
Very seldom, is the universal answer from those in a position to know-the phone systems trade. One reason is certainly contained in the expectations mentioned above: it seldom goes wrong and it’s simple to use. So we both take telephony for granted and assume that the technology is all much the same, varying perhaps just in scale and fancy features-and sleek design of the desk sets. Why pay more when you can get ‘a similar system’ for half the price-or even second hand?
Boringly, the answer to that one is the same as every other purchasing criterion: because you get what you pay for. Phone systems are pretty reliable and the leading brands are world names. But as soon as you start thinking beyond very basic telephony-a certain number of lines to be shared among so many extensions-it all becomes rather more complex. There is a huge range of possible special features, all of them designed to make telephony more efficient, smart, user-friendly (and caller-friendly), time saving and so on. The trouble is that you have to decide which ones are essential, useful, nice to have, etc. for now, for tomorrow and for when your business expands.
The wide variations in features on offer can of course be confusing, but in truth most brands offer much the same sets of features for what the market perceives as distinct segments. In practice this means that the small business looking for a sophisticated system will find itself looking at products targeted, at least originally, at the needs of larger corporates. This means that there will certainly be an apparent price premium as against cheap and cheerful solutions with just the basic functions.
Let’s jump straight to some rough figures. You could buy and install a state-of-the-art PBX (Private Branch Exchange) with, say, about 16 users sharing up to eight lines, digital desk sets and all of the smart call management features you could reasonably expect in a standard system for a total of less than EUR10,000. And that’s with each sophisticated desk set costing over EUR200. Now if that sounds expensive to you, just measure it against the cost of people. If each of your staff saved five or ten minutes a day by using smarter phones-or using telephony more cleverly-it wouldn’t take long to recover the extra costs, would it? In fact it is less than the gross annual cost of one employee on the minimum wage.
More productivity — less Staff
‘I know personally a busy small company that invested in a new system and increased productivity so much that it reduced its general office staff from five to two,’ says Barry Dillon, Nortel’s business manager. ‘Obviously that’s both a dramatic return and one of our customers. But anyone who asks around will find similar stories-perhaps even involving our competitors’ equipment!’ He makes the valid point on behalf of the industry that entry-level systems now incorporate the fruits of 20 years and more of technology development and also bridge the analogue/digital gap in the sense that they are capable of integrating with your computer systems to a greater or lesser degree depending on model and specification. All PBX boxes in fact incorporate a PC because it is the software that allows the myriad sophisticated call management features that add value. This also means that most elements of setting up the system and making ongoing changes can be done through easy to use on-screen menus by anyone who has the authority-from the out-of-hours voicemail messages or rules for call routing to simply adding a new user.
What exactly is entry level these days? Most trade people will be cautions about generalisations, but Pat Toland of Eircom Business Systems (TEIS that was, for many years) is happy to give the example of EUR1,500 for a two-line, six-extension system with two feature sets and voicemail as well as DECT (cordless) capability. ‘This is the Netlink system, made in Ireland by Lake Electronics, and it handles both analogue and ISDN up to eight lines and 18 extensions.’ This is a so-called ‘key system’ with no PBX core, a very common solution at the lower end of the market, however it cannot scale beyond that. But as far as the technology goes such systems have most basic modern features and are certainly good for a 5-10 year horizon. Guide pricing is about EUR2,500 installed for a 4×12 system.
Esat BT is a more recent entrant to the direct selling of business systems and its PBX channel manager Fran Donnelly concedes that it is targeting firms from about 15-20 employees upwards. It has also plunged directly into IP telephony with Avaya systems. ‘There is no question about the flexibility and sophistication that converged voice and data can give a business-and it is certainly the way the market is going. In those terms, the potential value of the investment to a business could be terrific. But it is true that for the very small firm the costs per user are still perhaps disproportionately high-although quite a few specialist businesses are going that route.’
Every business manager wants to look ahead and future proof investments. In telephony, is going for IP the way to do that? Probably not yet, our advisers suggest, for SMEs at the lower end of the scale or those that are not looking to upgrade and invest significantly across their computer networks as well. ‘It’s really a function of practicality and costs,’ says Eamonn O’Donnell of Bandwidth Telecommunications. ‘Good all-round phone systems are not an expensive investment and so long as there is a TAPI (Telephony Application Program Interface) you can link very satisfactorily with your computer systems now or at a later date. The important thing is that the system should suit your business now and for the immediate future-with minimal complications.’
IP Telephony and VoIP
It’s impossible to talk about phone systems without reference to the convergence of voice and data, which for some years now can be handled on a single unified digital network. Voice signals are converted to Internet Protocol (IP, the standard for almost all network traffic today) and Voice over IP (VoIP) is the term for the systems that manage it on a network and the tricky business of giving priority to voice traffic at all times. The complications occur because we humans are too sensitive. IP carries information in small data packets but we are not built to capture small individual packets of sound, the human ear hears in a continual stream of sound. We are sensitive to unnatural pauses and can pick up even a 50-millisecond delay. If it happens frequently we find it a disturbing, unsettling quality that would ‘do your head in’ over any length of time.
Most of the Quality of Service issues have been solved in IP telephony, there are proven systems and the costs of handsets have come down to competitive levels. But the consensus of advice is that unless you have special needs (like a mini call centre), or a green field site in both data and telephony terms, IP Telephony is not yet the kind of out-of-the-box, cost-effective solution that the vast majority of smaller firms need. Scale is another factor: although high quality vendors like Avaya, Cisco and 3Com offer integrated solutions for SMEs, the real entry point is around 30-50 employees.
10 Tips for choosing a new phone system
Go ISDN: since this is a digital service, it opens up the possibilities for all of the smart communications things you could do and means you can exploit the full potential even of entry level systems. Used for Internet or data exchange, ISDN can ‘bond’ two or more lines to give relatively fast 128kbps connections.
Look for Direct Dialling Inwards (DDI): this enables separate numbers for different people, departments or services-probably the No. 1 benefit in customer relationship terms.
Make sure you have some spare capacity: six employees-a system that can handle 8 or better 10/12 extensions. Two phone lines, capacity for four, etc.
Number of lines: two is the minimum (ISDN basic rate or just two standard) and three recommended, even for very small firms. No firm guidelines after that, since it clearly depends on the type of business, but a line per three staff is about it especially if you use fax and Internet.
Make sure your system is DECT enabled: this is the European standard for cordless phones, a most useful variation that saves wiring and gives flexibility e.g. in warehouses, older buildings, etc.
Look for a non-geographical number: so if you move or have more than one location, your number group stays the same and the value of your investment in promotion, stationery, directories etc. is preserved. (A non-geographical number comes with ISDN and DDI service.)
Look for management software: that allows easy configuration of your in-house rules-which extensions can make overseas or 1550 calls, how calls are re-directed, etc.
Have at least one standard analogue line: and look for ADSL for always-on, broadband Internet access. You have to be within about 5kms of an exchange and if you are, get your application in now if don’t want to wait any longer than you have to for this service.
Computer Telephony Integration (CTI): ensure your system has a TAPI interface which then means that even small systems can work with contact management software e.g. customer record screen pops when the calling number is identified.
Unified Messaging: all messages on your PC-voicemail as sound files with caller’s number and name if previously registered, plus of course email, fax, SMS and instant messaging. This is not the preserve of high-end systems. LAN-based software can pull in the telephony function and integrate it. Costing perhaps EUR3k for an initial 5-user licence, it may seem expensive but upgrading to an all-digital or IP telephony system would cost much more.
We acknowledge the help of all of our quoted sources, particularly Eamonn O’Donnell, in compiling this list of useful tips.
Case in point 1: A1 Waste
A1 Waste, a company that provides a comprehensive waste management service throughout the Dublin area, decided to install a new phone system when it moved to premises in Tallaght.
Kevin Kearns, A1 Waste’s finance manager says, ‘our existing phone system wasn’t working well and this was a problem because 99 per cent of our business comes from people ringing us up. Therefore a fully-functional phone system is the lifeline of our organisation and if our phones aren’t working then neither are we.
A1 Waste employed a consultant to source the new system and he recommended the Business Communications Manager (BCM) from Nortel Networks. BCM is an IP enabled platform that integrates voice and data capabilities, VoIP gateway functions and quality of service (QoS) data routing features into a single system. BCM allows A1 Waste to monitor each operator’s level of call answering and to track the number of calls it loses. More importantly, it also ensures that customers end up talking to the right person.
Kearns says, ‘the new system has made things easier for both our customers and ourselves and it’s had a huge impact on the way we conduct business. In fact, the system works so well that we no longer need a receptionist. Using BCM, we’ve been able to stream our calls much better. Previously we were maybe getting in around 1300 calls a day but were losing some of those calls. Now though, we get less phone calls, but the ones we get are more meaningful and usually lead to a sale.
Case in point 2: Precision Marketing Information (PMI)
PMI, a supplier of list information and data services to the Irish market, recently bought a new PBX system from Avaya. According to Ernie Parker, PMI’s general manager, the decision to opt for a new phone system has already paid dividends. ‘We were moving to new offices and were looking to introduce a new system that would replace our standard analogue PABX system. As the new system was one that is managed predominantly by software we thought that it would be a system that would sustain us for a long time’, Parker says.
EsatBT installed the new system for PMI and Parker is more than pleased with the results. ‘Things have become much easier for us since we moved over to the new system. We’ve been able to set up direct dial lines for our key people and it’s become simpler to manage restrictions on phone usage by other members of staff. Adding in new terminals is also relatively straightforward’. He continues, ‘part of our function here is that we write software so one of our programmers has written a piece of software that plugs-in to the system and allows us to see both which customers have been contacted and how many unnecessary phone calls are being made. Not only has this led to an increase in productivity but has also meant that we’ve been able to cut our bills by a quarter. ‘The new system has effectively given us more control over our phone lines.
‘We’ve become much more aware of what people are actually doing with the phone system which has meant that we can restrict access to phones unless it’s dependent on their role,’ adds Parker.
19/05/2003
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