State IT execs betting on VoIP

In California, there might be a new killer app for VoIP: balancing the state budget.

A top-to-bottom look at spending called the California Performance Review (CPR) recommends adopting VoIP across state government as a way to save up to $6.3 million per month statewide. The review, by a panel created by Gov. Arnold Schwarzenegger, says agencies pay anywhere between $20 and $117 per month for phone.

In their effort to stretch taxpayer dollars, CPR authors are latching on to just one of the benefits of VoIP - cost - that is making the technology increasingly popular among state IT officials, many of whom are meeting this week in Providence, R.I., at the National Association of State Telecommunications Directors (NASTD) annual conference. Other benefits include support for advanced services, simplifying network architecture and backing up existing systems. A panel of members with experience implementing VoIP plan to share what they've learned.

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In California, there might be a new killer app for VoIP: balancing the state budget.

A top-to-bottom look at spending called the California Performance Review (CPR) recommends adopting VoIP across state government as a way to save up to $6.3 million per month statewide. The review, by a panel created by Gov. Arnold Schwarzenegger, says agencies pay anywhere between $20 and $117 per month for phone.

In their effort to stretch taxpayer dollars, CPR authors are latching on to just one of the benefits of VoIP - cost - that is making the technology increasingly popular among state IT officials, many of whom are meeting this week in Providence, R.I., at the National Association of State Telecommunications Directors (NASTD) annual conference. Other benefits include support for advanced services, simplifying network architecture and backing up existing systems. A panel of members with experience implementing VoIP plan to share what they've learned.

Like California, some other states report savings, but the major force behind VoIP adoption is support for particular applications that IP handles better than traditional systems, particularly call centers. For example, New Jersey's telecom services agency is offering its first VoIP service, managed IP call centers for departments whose traditional gear is worn out, says David Blackwell, telecom manager for the Office of Information Technology.

Blackwell says the first potential customers, the departments of commerce and human services, are considering linking to the state's lone Avaya S8700 VoIP media server to support small call centers by installing remote extensions of the media server in each department. Without the IP technology, each department would have to buy its own PBX and call-center software, he says.

The IP call center makes it simpler to distribute the centers across the state in a way traditional call-center gear cannot, he says. So if a center in northern New Jersey was swamped with calls, adding on a call center in the south would just be a matter of entering the IP addresses of the phones in the southern center to the list of phones associated with the northern center, he says. With a traditional PBX-based call center, adding and removing phones would be cumbersome.

Meanwhile down in Texas

Texas has put this call-center flexibility to use to establish a human services hotline program in which citizens dial 211 to get information about programs. During business hours, Cisco Call Center and eLoyalty call-center software route calls to the nearest of 25 area information centers, but after-hours, they route them to the few information centers open 24 hours per day. The state estimates an 80% savings from what the same 211 system would cost using 800 numbers.

The same equipment could be used in disasters to handle overflow calls, says Jason Shugg, telecom specialist for the Texas Health and Human Services Commission. If a hurricane in Galveston, say, caused a spike in calls at the Houston information center, every third call could be routed to another city. Or calls on hold for more than one minute could be rerouted, he says.

Similarly, if an office had to be evacuated, call agents could take their phones to another information center, plug in and continue working, he says. The network would recognize the phone's IP address.

Texas also uses VoIP to trunk traffic between state agencies across the Texas Agency Network (TEXAN) ATM backbone, says Brian Kelly, assistant director of the Texas Telecommunications Services Division. Phone calls from Austin, the capital, to three other cities avoid toll fees by using TEXAN instead of the public long-distance phone network, he says. The state says it will save enough money over 11 months to pay back VoIP equipment costs, Kelly says.

But toll bypass is not a guaranteed way to save money, says Jack Ries, project manager for Minnesota's InterTechnologies Group.

A study of VoIP to carry phone calls among state facilities over Minnesota's ATM backbone showed that cost savings, while possible, might not materialize. The cost of equipment, upgrading access lines and reassigning access codes would all eat into potential savings, he says. "There may be cost savings," he says, "but with cost savings alone, you could probably not justify the cost of the infrastructure needed to do it."

In the best case, using VoIP for intercity calls could avoid $870,000 per year in toll calls, based on the study. This includes trunking Minneapolis/St. Paul-bound calls to a public phone network gateway in the twin cities where terminating them would be free.

While the state has doubts about VoIP trunking, there is a push to convert all state call centers to IP within the next year, Ries says, if budgets allow. The attraction is the ability to distribute call agents geographically inexpensively, he says.