FRONTIERS

o o

Internet telephone technology, rapidly displacing the

traditional kind, isn't just inexpensive. It's revolutionizing
the way companies coordinate people and information,
connect with customers, and compete with one another.

Using VoIP
to Compete
by Kevin Werbach
o
^-^
o
timated 10% of intemational phone traf- These might seem like technical nu-
S INCE ALEXANDER GRAHAM BELL'S
day, businesses have bought tele-
phone services the same way they've
fic now travels over the Internet using
voice over Internet protocol, or VoIP.
ances best left to your CIO. But consider
this: Since VoIP turns voice into lntemet-
purchased electricity, janitorial func- Most telling, this year, for the first friendly data packets, it can-and will-
tions, and water for the cooler - as time, U.S. companies bought more new replace the rigid, packaged phone ser-
packaged offerings defined by an out- Internet-phone connections than con- vices that most companies still use. And
side provider. Sure, companies could ventional phone lines (see the sidebar because it will allow businesses to create
choose from a menu of configuration "How Big Is VoIP?"). their own customized phone applica-
options and service plans, hut, in the VoIP isn't just a new technology for tions, it will shift control of phone ser-
end, the phone company or vendor making old-fashioned calls cheaper. vices from providers that have histori-
called the shots. The breakup of tele- What makes it so potent is that it tums cally defined (and limited) them to the
phone monopolies such as AT&T in the speech into digital data packets that companies that use them. VoIP will
1980S changed the mix of providers, can be stored, searched, manipulated, serve as the unifying platform for such
but it left intact the century-old public- copied, combined with other data, and applications, supporting ever more cus-
switched telephone network they em- distributed to virtually any device that tomized, intelligent, and strategic uses
ploy, and it left service decisions up to connects to the Internet. Think of it, of voice communications. As some inno-
suppliers. As a result, companies have basically, as the World Wide Web for vative firms are already showing, this
been constrained - more than they the voice. IP, or Internet protocol, sim- flexibility can fundamentally affect how
know - by the legacy phone systems ply refers to the technical standards that companies use voice to compete, allow-
they've depended on. govem how digital information is en- ing them to set up and conduct business
coded. Because ofthese common stan- in ways that simply couldn't have been
That's changing fast. While the vast
dards, VoIP can interact seamlessly with done before-or that were so impractical
majority of individuals and companies
other Intemet-based data and systems. that no one would have bothered.
still rely on conventional phones, an es-

140 HARVARD BUSINESS REVIEW

 O Q. O

O o
can use an ordinary telephone con- organizations may outsource this in-
VoIP as a Platform nected to a VoIP converter box, which frastructure function to a provider or
when you call a colleague's office from plugs into an Internet connection. Or simply link together individual VoIP
yours using a traditional circuit-switched he can use an IP phone that looks like phones and other devices.)
phone, the call originates from the hard- a conventional telephone but connects In a VoIP world, a phone system isn't
ware on your desk, travels along one of directly to the Internet instead of a phone static; it's an environment for devel-
a limited number of paths on dedicated jack. Finally, he can install "softphone" oping and managing any capabilities
telephone networks, and arrives at a software on any personal computer that use voice or other IP communica-
specific location - the phone on her (and many personal digital assistants) tions. Building applications to take ad-
desk. VoIP calls, by contrast, are just bits and use a headset or microphone to vantage of all the newly accessible IP
of data on the global Internet. They are make VoIP calls. resources is where the real benefits
not tied to physical locations (such as Installing front-office devices-the arise. Adding a function like video-
the building where you work) or spe- phones, converters, or software that conferencing to a VoIP system doesn't
cific devices {such as your office or cell employees see-is the initial step in de- involve a major equipment change; it's
phone). And because VoIP uses com- veloping a VoIP platform. Next,compa- akin to installing a software package
mon standards, it can talk to any device nies must install VoIP gear to replace on your PC. More significant, it means
that uses Internet protocol. It can just as their back-office private branch ex- VoIP will be able to support new com-
easily go to an e-mail in-box on a laptop change (PBX) equipment - their con- munications functions that don't even
computer connected to a wireless net- ventional phone networks. The new exist today. Just as the initial wave of
work in a London cafe as to the phone VoIP software and hardware infra- static corporate Web sites a decade ago
on that colleague's desk. structure controls what features are gave way to dynamic, interactive, truly
Making VoIP calls need not involve available and how the VoIP devices con- business-enhancing uses of the Inter-
any visible changes for users. A caller nect with corporate IT systems. (Smaller net, VoIP wili serve as a platform for

SEPTEMBER 2005 141

FRONTIERS • U s i n g VoIP t o C o m p e t e

more strategic communications that e-mails by phone, check and schedule or taken off the clock as soon as de-
combine voice with other data-so-called appointments, create task lists, and mand changes.
"converged communications." launch calls from a contact list. They can VoIP allows LiveOps to give its agents
In thinking about VoIP's potential as also set preferences for notification the same sophisticated computer-based
a strategic tool, consider its roles in terms based on priority level or sender. For tools they would have in a traditional
of three types of capability: virtualiza- example, sheriff's deputies investigat- call center. For example, a call can be
tion, customization, and intelligence. ing a crime could tell the system to put switched from an agent to an interactive
supervisors' calls directly through voice response (IVR) system that allows
Virtualization while shunting less important calls to the customer to type in a credit card
VoIP makes it simple to take a virtual voice mail. number and audibly record ber agree-
version of one's phone to any location at Scalability and Redundancy. Tbe ment to certain terms, as required by
any time. And it makes it possible to same functionality that makes a per- regulations in some industries. The call
launch service for an unlimited num- son's phone number and associated can then be switched back to the agent
ber of phones anywhere in the world services portable also makes it simple to without ever losing the tracking, analy-
with a few mouse clicks. This combina- add phone lines wherever and when- sis, and management capabilities that
tion of portability and scalability takes ever they're needed. Every time a new allow LiveOps supervisors to evaluate
features of conventional communica- empioyee arrives at a company, or an- the call for quality assurance purposes.
tions that are fixed and expensive and other employee moves to a new office, Similarly, Amicus, a call center out-
makes them variable and cheap. It al- hooking up that person's phone service sourcer in the UK, created a network of
lows companies to build inexpensive is simply a matter of changing a setting stay-at-home parents, disabled workers,
redundancy to manage risk, and, most on a Web page. Similarly, a company and others from underutilized labor
important, it gives companies flexible with an established VoIP infrastructure markets. Using VoIP, these far-flung
communications that can easily adjust can just point and click to outfit a new customer-service agents can work from
to fluctuating demand. office anywhere in the worid with the home and still have cal! center features
full suite of corporate communications such as call tracking and personalized
Portability. With VoIP service, a busi-
capabilities - and shut It down just as computer screens that provide scripts
nessperson in the U.S. could take a VoIP
easily. and customer information. By avoiding
terminal adapter-a converter currently
about the size of a paperback-to Tokyo, One Wall Street investment bank, for the overhead of a contact center, and
plug it into a broadband connection at a example, realized after the attacks on by tapping relatively inexpensive labor,
hotel, and seamlessly receive calls at her the World Trade Center that it needed Amicus has lowered its call center costs
U.S. office phone number. (If she has greater operational resilience in the by about a third. That has brought its
VoIP software on her laptop or a por- event of a disaster. It created a backup expenses close to those of call centers
table IP phone, she could use those in- location just outside New York City, based in developing countries. Able to
stead of the adapter.) She'll have all the linking it to headquarters through VoIP. compete directly with these centers,
capabilities of her desk phone-call fea- In a disaster, all calls can be rerouted Amicus has carved out a strategic niche:
tures, directories, and security - and to the new location in minutes. With- It targets UK companies that avoid off-
callers on the other end will have no out VoIP, such rerouting would have re- shore call centers for political or regula-
idea she's answering from halfway quired days or weeks of rewiring and tory reasons.
around the world. Neither party pays re programming. VoIP made it easier to
anything extra. add true redundancy, not just in equip- Customization
Consider how the government of ment but in the continuity of business
The biggest advances in the traditional
Marin County, California, uses VoIP to operations. phone network, such as caller ID and
give its employees and officials home- Flexibility. Other businesses are be- voice mail, took decades to design and
offlce capabilities wherever they are. ing built from scratch entirely around deploy. With VoIP, new calling features,
Using a system that integrates VoIP, Vol P, because it allows them to respond or voice applications, are easy to build
voice recognition, voice synthesis, and flexibly tofluctuationsin demand across and refine. Although off-the-shelf VoIP
e-mail, they can listen to and compose time and space. LiveOps, a Silicon Val- software and hardware come with a va-
ley call center start-up, made VoIP cen- riety of features, organizations are busy
Kevin Werbacb (werbacb@wharton tral to its strategy of servicing direct- writing custom applications that can
.upetin.edu) is the founder of Supernova response television advertisements, reinforce branding, enhance customer
Group, a technoiogy analysis and con- where demand comes in bursts. It's in- service, and improve intemal commu-
sultingjirm based in Villanova, Pennsyl- efficient to maintain a full call center nications.
vania, and is an assistant professor of staff when the flow of calls is so vari- Brand Building. Fandango, an online
legal studies at the University of Pennsyl- able. So LiveOps' 5,000 agents work movie-ticket service, wanted a phone-
vania's Wharton School in Philadelphia. part-time from home and are tapped based system that differentiated it from

142 HARVARD BUSINESS REVIEW

 Using VoIP to Compete • F R O N T I E R S

Conventional Calling Versus VoIP

Conventional telephony sends voice communications over a dedicated telephone network that is separate from the Internet.

Telephone Network Switch

Phone
Jack

VoIP telephony turns speech intodigitai packets that can travel overthe Internetand interact with other data
and devices that use the Internet. Calls can move between conventional phones with VoIP converters, specialized
VoIP phones, and computers running VoIP software.

Wireles5(WiFi)
Transmitter

Computer
VoIP Running VoIP
Software
Converter
Conventional VoIP
Phone Phone

its competitor Moviefone. VoIP allowed making it an extension of the online in his new V^^nn Las Vegas luxury hotel
the company to easily experiment with brand. and casino.
and hone its customer interface. Work- Customer Service. And consider how Using the VoIP phones available in
ing with Tellme, a Silicon Valley pro- one resort has used a customized VoIP every room, guests will be able to call
vider of voice application technology, system to address changing demand and the concierge to arrange dinner reser-
Fandango tried out more than 30 op- differentiate its service: Over the past vations while browsing menus and pic-
tions for background music, prompts, ten years, the primary revenue source for tures of dining rooms on the phone's
and recorded voices before finally set- Las Vegas resorts has shifted from gam- color display. When a guest calls the
tling on a theme built around a classical bling to guest services such as enter- service staff, VoIP rings a staffer's cell
guitar piece (a fandango, appropriately tainment, dining, and recreation. Rec- phone and desk phone to assure that
enough). The system allows Fandango to ognizing this, billionaire developer the guest gets through. Staff can use
rapidly tailor and swap in new local wel- Steve Wynn installed VoIP as part of a speech commands to manage their voice
come messages and movie highlights, strategy to pamper and delight guests mail messages and calendars, access

SEPTEMBER 2005 143

FRONTIERS • U s i n g VoIP to C o m p e t e

How Big Is VoIP?

Today, all major phone service providers are incorporating customers - representing more than 10% of all homes -
voice-over-lnternet-protocol technology into theirnetworks. subscribe to VoIP offerings. Over 35 million people world-
BT, tbe dominant carrier in the United Kingdom, plans to wide have the free Skype VoIP software on their PCs.
convert its entire infrastructure to VoIP by 2009. Soon, Consumer VoIP mayget most ofthe attention, but there
even when calls originate and terminate with traditional has been a steady drumbeat of enterprise Vol P adoption.
telephone technology, they will be carried over the phone Last year, Bank of America committed to deploying 180,000
companies'VoIP networks. In 20 years, and probably much Cisco VoIP phones across its 5,800 branches and offices.
sooner, the global telephone system will run largely on In- Boeing signed a contract to provide VoIP to its 150,000
ternet technology. There will be no distinction between employees, and Ford signed a $100 million deal with tele-
VoIP and the phone network. communications carrier SBC to deploy 50,000 VoIP
VolP's simplicity and low cost are driving its rapid adop- phones. Smaller firms are embracing VoIP as well. Cisco,
tion by both consumers and businesses. The leading U.S. one ofthe largestVolP vendors, has sold more than 4 million
retail VoIP provider, Vonage, has about 600,000 customers IP phones to businesses.
and is adding about 15,000 each week. A host of start-ups Most of these initial VoIP deployments are simple ROI-
are marketing competing services, as are incumbent phone driven technology investments, akin to buying sales-force
and cable TV companies such as AT&T, Verizon, Time automation systems or human resources software. VoIP
Warner Cable, and Comcast. And the U.S. is hardly a leader cuts costs by replacing separate voice and data networks
in this field. In Japan, where broadband service is cheap (both users' and providers') with one common infrastruc-
and much more widespread than in the U.S., over 4 million ture, eliminating duplication. Thus, instead of paying
phone companies to carry their voice traffic, companies
can send much of it over the spare capacity on their own
In 2005, companies worldwide installed more new data networks. Moreover, VoIP allows providers to replace
VoIP phone lines than conventional lines. centralized, proprietary"switches"~essentially, mainframe
computers-with standards-based devices that drop in price
so
^^ New
as rapidly as PCs do.
^ ^ ^ VoIP lines
40
In large enterprises, communications is a big enough
- 30
line item that savings can add up. SunTrust Banks, for exam-
0 pie, found that their VoIP deployment saved over $5 million
1 20 annually. Although significant, such cost savings are not
^ ^ ^^--^^ New
^^r ^""^ conventional game changing-even Cisco claims only a 15% cost reduc-
10
^ ^ phone lines tion from VoIR For most companies, therefore, the initial
0 , , , , , , , impact of adopting VoIP will be modest. It will center on
2002 2003 2004 2005 2006 2007 2008
efficiency gains from replacing or consolidating legacy
PROJECTED
systems and avoiding usage-based charges from phone
Source: Avaya analysis from multiple analyst reports.
companies.

directory listings, and launch confer- Internal Communications. Fandango realized that the same emergency com-
ence calls from any phone. And calls can and Wynn Kesorts use VolP's customiz- munications capability could be built
be recorded and archived for manag- ability to improve customer service; into a VoIP infrastructure. The cus-
ers to review, part ofthe overall quality but other types of organizations are tomized system the department ulti-
assurance effort Ultimately, the system finding different ways to exploit this mately installed not only saves money
will include features similar to those tkxibility. At the U.S. Department of but provides better emergency commu-
found in advanced call centers that give Commerce, fur example, CIO Tom Pyke nications than a standard public address
priority to high-value calls, ln effect, couldn't find the budget to deploy VoIP. system. Administrators can broadcast
V^nn is using VoIP to turn the entire However, a renovation ofthe sprawling voice messages that override every
resort into a state-of-the-art contact cen- Washington, UC, headquarters build- phone in the building and also come
ter. The phone is no longer just a com- ing was in the works, including plans to through speakers in common areas.
munications channel; it's a form of cus- add a stand-alone public address system The Commerce Department's experi-
tomer service in its own right. for emergency communications. Pyke ence exemplifies VolP's ability to evolve

144 HARVARD BUSINESS REVIEW

 Using VoIP to Compete • F R O N T I E R S

sometimes in unexpected directions,

as needs change. At Commerce, it was
attractive initially because it saved
Taking a Test-Drive
money, as part of a larger capital project. Though VolP's biggest payoffs will accrue to those who deploy it strategically,
Yet it wound up doing something the there are several approaches for test-driving the technology without betting
old phone system never could have sup- the farm.
ported. The system was so well received, Follow the upgrade cycle. Many companies are deploying Vol P today because
incidentally, that its developer has sold their phone systems are becoming obsolete. Companies should therefore look at
it to many other enterprise VoIP cus- their upgrade plans as opportunities to move toward VoIP But this evaluation
tomers. This highlights another feature shouldn't be limited to a review of communications systems. Planned upgrades
ofthe technology - customers are con- to the corporate data network and computer hardware also provide an opportu-
tributing to its rapid evolution. nity to introduce VoIR Some firms will find themselves deploying the technology
first through their customer relationship management systems. Others will in-
Intelligence troduce it as a tool for supply chain management, to make it easier for supply
As these cases show, companies are al- chain partners to communicate. Others will deploy Vol Pas a feature ofthe cor-
ready using VolP's customization and porate help desk so that computer support calls can be handled more efficiently.
virtualization capabilities, although These deployments may be more tactical than strategic, but that shouldn't delay
these are among the few so far to have the initial activity.
gone beyond basic cost-saving deploy- Learn from back-door users. In the late 1970s, Wall Street analysts brought
ments. The greatest potential of VoIP in Apple II personal computers through the proverbial backdoortorun VisiCalc,
will come as companies design increas- the first spreadsheet, because it gave them an immediate productivity boost.
ingly intelligent systems to link com- Most ClOs at the time considered PCs to be toys, not suitable for real business
munications and business processes applications. Their own employees were ahead of them. A similar story played out
and improve the productivity of knowl- when Mirabilis, a tiny Israeli start-up, launched ICQ, an Internet-based instant-
edge workers. messaging client. Most users downloaded the software to chat with family and
Exactly how VoIP will evolve is un- friends, but a surprising number put it to work in business settings. AOL bought
certain, but the early outlines are clear Mirabilisini998,and tod ay there are hundreds of millions of instant-messaging
enough to allow informed speculation. users worldwide.
Communications have always been A VoIP analog to VisiCalc and ICQ is Skype, the free VoIP software. Though it's
linked to business processes. The abil- used principally by individuals looking to save on their long-distance bills, half
ity to coordinate activities across dis- of Skype users say they have used the service for business communications.
tances andfirmswas, after all, what first
Managersshouid welcome employees'experimentation with Skype and simitar
made the telegraph and telephone im-
VoIP software packages. The VoIP killer app in an organization may be one that
portant business tools more than a cen-
the CIO doesn't anticipate but that an employee devises out of personal necessity.
tury ago. With VoIP, that coordination
By observing users who bring in VoIP through the back door, often on their per-
can become much tighter. Instead of a
sonal PCs, managers may gain insights into how the company can use the tech-
phone call being a shot in the dark
nology and the cost/benefit equation for bringing VoIP through the front door.
aimed in the general direction ofthe
intended recipient-the phone on her Of course, companies shouldn't ignore the security issues that any software on
desk-every communication can be pre- the corporate network can create. The beauty of software like Skype is that it
cisely targeted on the basis of when and operates through the public Internet without requiring access behind the cor-
why it is being sent, and to whom. porate firewall, obviating many security concerns.
Create VoIP islands. VoIP deployments need not be large scale or enter-
Linking Communications and Pro-
prisewide. One ofthe most compelling opportunities for using VoIP is in new
cesses. Avaya Labs, the research arm of
branch offices or locations (although the full benefits of such outposts come
one ofthe largest VoIP vendors, is exper-
when they can tie into a companywide VoIP infrastructure). In other cases, orga-
imenting with VoIP to enhance supply
chain management. In one project, a nizations create VoIP islands that are defined by function rather than location.
simulated supply chain disruption au- Rhode Island Hospital kept its conventional phone system when it deployed the
tomatically launched a multicompany Vocera Vol P application for real-time communication among doctors and nurses.
VoIP conference call. The VoIP system The main advantage of this island strategy is that it gives companies a way to
reached participants through whatever try out VoIP without making a huge financial or business commitment. ClOs who
device they were closest to and then have presided over leading-edge VoIP deployments often point to smaller offices
automatically linked their computers to or departments that implemented early and gave them confidence that VoIP
instant messaging, streaming video, and could meet their needs.
a secure Web site with key documents.

SEPTEMBER 2005 145

F R O N T I E R S • Using Vol P to Compete

room; if so, conference John into the

How Secure Is VoIP? session.
Though VoIP can already handle
Early quality and reliability problems with VoIP have largely been overcome, routing and data management like
but security remains a real issue. As the Internet has shown, a flexible, open, this, writing the necessary rules for the
digital communications platform attracts parasites. It's only a matter of time system would be cumbersome. The
before we see voice spam on VoIP systems, aiong with viruses, worms, and major challenge now for designers,
security breaches. Any business looking at VoIP systems should carefully assess therefore, is to create simple ways to
its security needs and ensure that vendors can meet them. It should look at teach VoIP systems to do what you want
securing its VoIP infrastructure the same way it secures its intranet, e-mail sys- them to do-integrate computer-based
tem, and corporate databases. knowledge management systems and
There is no technical reason why VoIP systems can't be as good as, and prob- human intelligence. At Avaya Labs and
ably better than, conventional phone systems in these areas. Skype, for exam- Rhode Island Hospital, VoIP platforms
ple, encrypts every call end to end, providing more privacy than any tradi- are beginning to make such connec-
tional phone company. The potential security threats to VoIP are real but are tions by tapping corporate databases,
no more worrisome than the security issues that are an accepted part of using work flow and knowledge manage-
the Internet in business. Companies simply need to appreciate that VoiP makes ment software, and other resources to
their phone systems part ofthe IT infrastructure, rather than a black box they support decision making. This, in fact,
trust a phone company to secure and manage. is where VoIP vendors are focusing their
attention.

In the Avaya demo, the VoIP platform nurses describing the problem and in- Linking VoIP to Strategy
"knew" whom to contact and how, be- dicating the patient's location. What When the telegraph first appeared in
cause it linked into corporate directo- would have been an undifferentiated the mid-i8oos, savvy traders used it to
ries, databases, and supply chain man- call for help on an overhead paging sys- obtain critical information about stock
agement applications. The business tem becomes a targeted message, in- prices. Since the Philadelphia Exchange
rules that guided the VoIP decisions, formed by hospital policies, duty sched- opened an hour earlier than the New
based on factors such as roles and ap- ules, and individual roles. Moreover, York Stock Exchange, speculators used
proval processes within each organiza- the information generated-the sequence the telegraph to create artificial oppor-
tion, were fairly simple and concrete. of calls and responses-can be captured tunities for arbitrage. That helped push
By bringing together the right people and later analyzed in order to improve the major exchanges to adopt standard
efficiently, the VoIP system didn't sub- care. trading hours. Before long, the tele-
stitute for human judgment; it facili- Enhancing Knowledge-Worker Pro- graph was an essential and ubiquitous
tated it. ductivity. On a more mundane level, technology on Wall Street, in the form
Avaya's supply chain system was a re- VoIP will improve workers' productivity ofthe stock ticker, but it was no longer
search project, but some organizations by intelligently triaging calls. To take a a competitive differentiator among
are using VoIP to link communications hypothetical example, a businessperson firms.
and business processes today. At Rhode who is out ofthe office might want calls VoIP will follow the opposite trajec-
Island Hospital in Providence, for in- to be processed as follows: tory, lt will become more strategically
stance, nurses wear small wireless • If I don't pick up my office phone, significant over time. Most companies
badges made by VoIP start-up Vocera route the caller to my voice mail. will deploy VoIP atfirstin ways that give
that are clipped to their scrubs. Instead • If the caller is my boss, forward the them a return on investment but little
of having to leave a patient's bedside call to my cell phone, unless it's the strategic value. They may not be ready
for help or information, a nurse just weekend or after 8 PM. to think about the deeper potential of
pushes a button on the badge. The sys- • If the caller is an important customer, VoIP but will still install VoIP equip-
tem uses speech recognition, connected forward the call to my assistant, Diane. ment and software for practical rea-
to the hospital's directory system, to If she's not available, put the caller sons. With that infrastructure in place,
route the request to the right person or through to my voice mail, but send though, companies are in a position to
to broadcast it to team members. me an instant-message alert. develop a true VoIP platform.
The hospital is integrating its patient • If I don't pick up my voice mail in In deciding whether and how to
monitoring devices into the VoIP system an hour, forward a copy to me as an adopt VoIP, managers wili ask the usual
as well. When there's an emergency-say e-mail attachment. questions that accompany any major
a patient's heart starts beating errati- • If it's John calling, check my calendar technology investment: What's the ROI
cally-the system will send a customized to see whether I'm in a marketing model? How "future-proofed" is the ini-
voice alert to the proper doctors or team meeting in the conference tial investment, and how much recur-

146 HARVARD BUSINESS REVIEW

 Using VoIP to Compete • F R O N T I E R S

ring investment will be required? What Second, early adopters view everyone Deployment may he incremental
legacy equipment and software need to in an extended organization as a re- (see the sidebar "Taking a Test-Dtive"),
be thrown away, and what are the mi- source. As VVynn Resorts is showing, the but companies should he thinking
gration and integration challenges? Will entire organization can become a con- about where VoIP could take them. Ex-
we be locked in to the particular vendor tact center. Or, with a system that's ecutives should ask what they could do
or integrator we choose? Is the technol- slightly more sophisticated than the one if, on demand, they could bring all of
ogy reliable, scalable, and secure enough at Rhode Island Hospital, a nurse con- their employees, customers, suppliers,
for our needs? fronted with an urgent medical need and partners together in the same vir-
But managers should also ask how could scan a list of available doctors, and tual room, with shared access to every
VoIP can improve - or transform - how with the click of a mouse, speak in- modern communications and comput-
they do what they do. The most suc- stantly with the most appropriate spe- ing channel. They should take a fresh
cessful early VoIP adopters concentrate cialist, wherever he or she was located. look at their business processes to find
on two things. First, they focus on And VoIP, by linking with hospital data- points at which richer and more cus-
achieving business objectives more bases and monitoring systems, could tomizable communications could elim-
than saving money. Though cost cutting provide the doctor with a real-time view inate bottlenecks and enhance quality.
may be the deciding factor for firms in of the patient's history and vital statis- VoIP is coming. The important divid-
making the initial investment, VolP's tics during the call. ing line won't be between those who
cost savings are unlikely to provide real Businesses that push VoIP capabili- deploy it and those who do not, or even
competitive advantages. More impor- ties out to their employees, partners, and between early adopters and laggards.
tant, viewing communications purely as customers will gain efficiencies over It will be between those who see VoIP as
a cost center can do more harm than those who continue to think of commu- j ust a new way to do the same old things
good. As companies that rushed to out- nications as a scarce, centrally controlled and those who use it to rethink their
source business functions in recent years resource. And companies that harness entire businesses. ^
have found, reducing costs often has a VoIP to achieve business objectives will
cost. Saving money hy alienating cus- find it is much more than an undiffer- Reprint R0509J
tomers is not a good trade-off. entiated commodity technology. To order, see page 161.

"You must cr^te meaningful, intense,

and active Pefationships between brand and
consu
Kevin Lane Keller
E.B. O5born Professor of Marketing

To captivate your customers, connect

with experts who know how.
Let Tuck Executive Education create
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