1.1 Approve the proposals for the roll-out of the new telephone system as set out in this report.
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- Mitchell Lester Watts
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1 APPENDIX L Agenda Item No. 13 REPLACEMENT OF TELEPHONE SYSTEM Councillor Cartwright Leader of the Council 1.0 Purpose The purpose of this paper is to recommend the progressive roll-out of new telephone facilities and services across the Council, following the success of the recent pilot telephone project. 2.0 Recommendation: It is recommended that Cabinet: 1.1 Approve the proposals for the roll-out of the new telephone system as set out in this report. 1.2 Approve the funding proposals as set out in Paragraph 5.3 of this report. 1.3 Approve the proposed approach to procurement as set out in Paragraph 6.4 of this report. 1.4 Approve the proposed approach to integrating with mobile telephone providers as outlined in section Authorise the Director of Corporate Resources in consultation with the Cabinet Member for Corporate Issues to agree variations to the approach set out in this report that do not alter the operational or budgetary outcomes of the proposals. 3.0 Executive Summary 2.1 The telephone is the major channel of communication with our customers, accounting for over 70% of all customer contacts. The present system, and the manner in which we make use of it, has attracted much criticism, particularly because it lacks virtually any ability to measure and report on the numbers of calls and our efficiency in dealing with them. These views were confirmed in a BT consultancy review undertaken in 2002, which proposed a technology upgrade, linked to a rolling programme which seeks to improve the way the council delivers its services. 2.2 As a result of these views, officers have considered a number of options to upgrade our systems. The objective of this work was to deliver an upgraded system on a self-financing basis, which would also then deliver real long term financial savings to the Council as well as improving service delivery. Members have previously agreed proposals to fund a pilot telephone project from our e-government programme, and in principle to a phased move across from our existing telephone system if the pilot scheme proved that the new system could deliver the benefits sought. The pilot has now been completed and the results L1
2 assessed, and it has been concluded that this does present a viable and cost effective route to service improvement. 2.3 The key business objectives for the project are: Enabling the Council to deliver the current e-government strategy. Reducing the cost of telephony for the Council as a whole. Increasing the quality of service to its customer base. Providing a more efficient working environment through an integrated voice and data network. Providing the facility to analyse call data and costs. Providing key management information. Support of the Council s flexible working policy. 2.4 Members are now requested to agree the roll-out of this technology to deliver these benefits across the Council. 3.0 Supporting Information 3.1 Cabinet considered an earlier report on the proposed pilot project on 18 th February At that meeting Members approved the pilot project and granted delegated authority to acquire the pilot equipment at the conclusion of the pilot. This acquisition is to be funded by our e-government programme. 3.2 The pilot project utilised tried and tested technologies, namely: CISCO AVVID A telephony system using computer communication technology (VoIP) to merge voice and data networks thereby reducing future infrastructure costs and facilitating the future linking of our telephone and computer systems. Examples of such links would be: o o The facility to allow credit/debit card payments over the telephone. Links to show Customer Service staff caller details as soon as the telephone rings avoiding the delay while they question the customer and look the details up on the computer system. Avotus A telephone billing system providing detailed call analysis and costing information. ARCsolutions A call management system that incorporates all the functionality needed to manage a mini-call centre. 3.3 The pilot facilities were introduced within two key areas that had a large volume of calls: the Benefits Helpline service and within Housing Support for Maintenance and Tenancy Services, as well as a more limited roll-out in a few lower usage areas. During an evaluation into the pilot users concluded that from a technical and user requirements perspective the pilot had proven the benefits of the technology and that the Council should implement the new systems provided that clear financial benefits can also be established. L2
3 3.4 Whilst the pilot was being conducted an evaluation of the Business Requirements of all services areas for new telephony equipment was undertaken. This was led by Lesley Yates, - Customer Service Centre Manager. A summary of the identified business requirements is attached as Appendix 2 to this report. This concluded that there was significant demand for improved telephony facilities across the Council in order to improve customer service and operational performance. 3.5 The product evaluation process compared the functions and features offered by the proposed telephony solution with the identified business requirements. This found that all of the essential and the majority of the desirable features could be provided by the new system. A list of the features and functions provided by the new system is included as Appendix 3 to this report. 3.6 A comprehensive assessment of both project and operational risks has been carried out, a Risk Register created and a Risk Management process put in place. Project risks are felt to be low due to the experience gained in the implementation of the pilot. As to operational risks, the pilot system has been 100% reliable over the past three months. Similar systems are in use in other authorities where the service has proved to be reliable. Consequently the operational risks are considered to be comparable to the existing telephone system. 3.7 Discussions with our telephone providers indicates that the new system could provide a further benefit of direct network connection to a mobile telephone service provider which could result in significant savings on expenditure on mobile services. This has not yet been fully evaluated but it is recommended that this should be investigated further with an aim to implementing such a link once the new system is installed. This would also offer the opportunity to consolidate all our mobile telephones with one supplier. 3.8 Using the experience gained from the pilot study officers have considered how the new technology can be effectively implemented across the Council, ensuring that disruption is minimised and that the operational benefits are secured in all areas. This has concluded that the technology should be rolled out on a phased basis over a 6 month period rather than a complete switch across all services in a single exercise. This approach allows us to minimise our risk and limit our need to act on the contingencies in place. 5.0 Financial Evaluation 4.1. The technical and business evaluation was also supported by a financial evaluation of the proposed new system. This compared the revenue costs of maintaining the existing telephony system with the capital and revenue costs associated with the proposed replacement system. The results of this financial evaluation are set out in Appendix 1 to this report. The capital and revenue acquisition cost of the new system is summarised below. L3
4 Capital Costs: 4.2. The annual maintenance cost of the new system is 26,500, covering software and hardware licence costs. The cost of call charges for the whole Council using the new system will be in the order of 50,000 per annum, assuming we enter into a new tariff agreement and the total number of users and calls remains the same. This compares with estimated annual running costs of the existing system of 96,500 per annum, with a further 55,000 per annum being incurred on call charges, based on our existing tariff agreement The Head of Financial Services has been consulted as to the funding of the proposed initial costs of the project. He has confirmed that it would be possible to fund this investment from an internal loan of our reserves through the IT Investment Account, which would then be repaid from the savings secured during the life of the system. It is suggested that the loan is repaid over a 5 year period, enabling savings to be realised in Council budgets from the first year following implementation. This is summarised in the table below 4.4. The cumulative revenue financial position assuming the new system implementation commences in August is summarised below, it should be noted that a delay in implementation will increase costs this financial year as it will delay the realisation of the savings derived from the new system: 4.5. The above table illustrates that the initial investment could be recovered by the end of the third year following implementation (06/07), although funding of the capital element has been phased over the anticipated life of the equipment The above table also indicates that an annual saving of 34,318 will be achieved for the Council following implementation. However, these savings will be spread over all of the Council s services in proportion to the volume of telephone usage within each area. In order for the Council to realise these savings the Head of Financial Services will ensure that the telephone budgets across all services will be reduced in proportion to their size in formulating the budgets for 2004/ Procurement 5.1. The procurement of goods and services is generally governed by European procurement rules to ensure fair competition between Member states and by the Councils own Contract Procedure Rules to ensure probity and appropriate financial control, as well as to ensure best price is secured. The procurement proposed in connection with the new telephone systems is actually comprised of a number of different procurement contracts for the provision of goods and services rather than a single contract. Some of these contracts will be below EU and Council thresholds for further competition, although others are above these thresholds EU Procurement processes can be lengthy and would significantly delay the implementation of the proposed technology, consequently delaying the financial, operational and customer benefits that could be secured from the new systems. Full competition in accordance with the Council s procurement rules would also serve to introduce delay. Officers have therefore L4
5 been investigating whether there is scope to accelerate this process whilst still complying with EU and Council procurement requirements In addition Council officers extensively tested the likely competitive costs of different solutions in the period leading up to the selection of the pilot project system. This analysis confirmed that the selected system was likely to be the lowest cost as well as providing the optimum technical solution. This analysis can be provided to Members if required Following consultation with the Head of Legal Services the following approach to procurement is proposed in order to ensure that internal and external procurement rules are satisfied whilst also allowing for the early implementation of the proposed technology: Telephony Hardware this will be procured through catalogues of goods and services for which prices have already been established through formal EU procurement processes by other public sector bodies. This will avoid the need to undertake a full EU procurement exercise and will also satisfy Council Contract Procedure Rules; Telephony Software the required software to support effective call management and management information facilities are proprietary products which can be excluded from competition under Council Contract Procedure Rule 3.1(a). This contract will also be below EU procurement thresholds; Implementation Services the likely value of installation services is below that required for competition under both Council and EU rules. There is a requirement for 3 competitive quotations to be obtained, however approaches to potential suppliers have suggested that these cannot be obtained due to the need to integrate with NTL services during the implementation period. In such circumstances the requirement for competitive quotes can be waived under Council Contract Procedure Rule 3.1(b); Telephony Services (call tariff charges) voice telephony is excluded from EU procurement rules and therefore does not affect this procurement, although it is covered by the Council s contract procedure rules. However, the Council will need to rely on NTL telephony services during the implementation period and it would not be feasible for this to be provided by a third party. It is therefore suggested that until implementation is completed an interim contract is negotiated with NTL on the grounds that this is a proprietary service, as allowed under Council Contract Procedure Rule 3.1(a). Once implementation has been completed then it is proposed that this service be subject to full open competition In undertaking the above approach to procurement it must be recognised that this is still subject to detailed negotiations with the individual suppliers. Whilst initial negotiations have already been undertaken in order to provide the cost and implementation estimates set out in this report, it remains possible that negotiations will result in some variations to these proposals. In order to retain some flexibility in the event that such variations do arise, it is proposed that the Director of Corporate Resources in consultation with the Cabinet Member for Corporate Issues be granted delegated authority to agree such variations, provided that these do not alter the anticipated operational or budgetary outcomes of the project. L5
6 7.0 Reasons for Recommendation 6.1. The principle reasons for the recommendations set out in this report are: An assessment of business requirements for new telephony solutions has clearly identified the need to upgrade our existing telephone facilities, whilst containing this within an acceptable cost to the Council. The earlier pilot project has demonstrated that the technology is effective, reliable and provides the operational and customer benefits sought by service areas. Delegated authority has previously been granted for the acquisition of the pilot project technology following the conclusion of that pilot. A failure to roll-out similar technology to the rest of the Council will result in different standards of telephone service in different Council areas and complexities in providing support for different systems. The proposed acquisition provides significant financial benefits to the Council over the likely life of the system. The proposed acquisition will support the Council s Strategic Objectives of improving our customer focus and making services more accessible to all. The approach to procurement is proposed in order to accelerate implementation so that customer, operational and financial benefits can be delivered at the earliest opportunity. Delegated authority is sought in order to provide for some flexibility in the event of variations arising from detailed negotiations with the suppliers. 8.0 Response to Strategic Objectives 7.1 Acceptance of the proposals will make a significant contribution towards the Council s strategic objectives of improving our customer focus and making Council services more accessible. It also is a key part of our e-government programme. Contact Officer: Malcolm Oliver/Steve Watson / Background papers: Implementing e-government Telephone Contract Report cabinet MO-RoTS-fsq2 v81 greens May 2003 Cabinet L6
7 Appendix 1 AVDC TELEPHONE REPLACEMENT SYSTEM - FINANCIAL EVALUATION It is assumed that ongoing training for new users will be provided internally. L7
8 Appendix 2 Executive Summary Telephone Business Use Project The Telephone Business Use Project was set up, to run in parallel with the Pilot evaluation, to verify the business requirements for telephony in the organisation before the final decision was made regarding the replacement of the telephone system. The objective of the Telephone Business Use Project was: To determine the Business needs in regards to telephone handling. To devise a strategy for meeting these needs. To investigate the impact of the pilot system on the organisation. To provide recommendation to the Telephone Project Board on methods for improvement where pitfalls are identified. The drivers for the project include: 2005 e-government targets set by national government. Governments reform of public services. The government s emphasis on customer centricity. AVDC s own objective 8 for improving Customer care. The existing telephone system no longer meets the expectations of the public and the council for service delivery. Best value and comprehensive performance assessment. Considerations of prudent financial management and value for money. The approach to meeting the objectives of the project included agenda driven meetings with individual heads of services, general research around customer demands, needs and survey results as well as hands on presentation of the piloted equipment by AVDC. The project identified the key corporate requirements as: General, i.e: Caller ID, ring tones, access to corporate directory, high priority fault repairs and ability to execute changes quickly and efficiently. Mini-call centres, i.e: agent login, on-screen wallboard facility, wrap-up time management, agent logoff, auto-unavailable, line transfer, headset access. Mini-call centre supervisors, i.e: call tracking, supervisor monitor, call filters, in-queue messaging, supervisor intrude. Mini-call centre management reporting, i.e: Historical reporting, current activity reporting. Individual phones, i.e: holding a call, transferring a call, caller-id, conferencing a call, call waiting, limited access to voic , group pickup, hunt group capabilities. Operational issues, i.e: Corporate choice of background music, call recording, linking with MS Outlook contacts Individual speed dialling management. Call recording Call Backs L8
9 The service requirements also covered the corporate requirements of the Council with some additional needs for: Out of office messaging Call diversion No call queuing Telephone payment. Link to main council network Differentiation between internal and external calls. Display indicator of extension numbers unavailable. L9
10 Appendix 3 Telephony System Functional Assessment Matrix Author: Megan Vitoria Date: 25th June 2003 A v ai la b le Description n o w? Essential Desirable Comments L10
11 Business Requirement Hunt Group Facility Y This function was seen as necessity through all the departments 1 Historical Management Reporting Y This function was seen as a necessity to critical departments such as Benefits 2 Current Activity reporting Y This function was seen as a necessity to critical departments such as Benefits Caller Identification Y Valuable to most departments in identifying callers 3 Directory Web Access N 4 Out Office Assistance N 5 Voice Mail Y Seen as essential in specific departments 6 L11
12 Marketing Survey N Seen as a future requirement 7 Advanced reporting capability Y Very critical to business decision making 8 Group pickup functionality Y This function was seen as necessity through all the departments 9 Abandon Call Reporting Y Very critical to business decision making 10 Speed Dialling Functionality to include individual management Y 11 Link to Outlook contacts Y 12 Headset facility - to suit individual needs Y 13 Conference Calling Capability Y 14 L12
13 Integration into back-office system N Seen as a future requirement 15 Mini-call centre capabilities Y Seen as essential in specific departments 16 Ring tone identification for specific departments Y Seen as essential particularly for open plan offices 17 Priority 1 given to telephone downtime faults Y Essential across the council 18 Access to corporate telephone directory Y Essential across the council Automatic bounce-back after 30 seconds of and when put on hold Y Essential across the council L13
14 Automatic bounce-back after 30 seconds on unanswered transferred call where lines are not transferred to another officer Y Essential across the council 21 Transfer of call Y Essential across the council 22 Call Waiting Y Essential across the council 23 Mini-call centre supervisors call tracking capability Y This function was seen as a necessity to mini-call centre departments 24 Mini-call centre supervisors Clipboard facility to online updating Y This function was seen as a necessity to mini-call centre departments 25 Mini-call centre supervisors skill assignment capability Y This function was seen as a necessity to mini-call centre departments 26 Mini-call centre supervisors ability to monitor activity Y 27 Mini-call centre supervisor intrude capabilities Y 28 L14
15 Mini-call centre capability to provide cross-service handling Y 29 Mini-call centre to handle overflow calls from services Y 30 Call recording capability N This function is available, but will require more evaluation to determine relevance 31 Call Back capability Y 32 Messaging Facility Y 33 Technical Requirement L15
16 Integrates with LAN/WAN Y Available through the CISCO VoIP technology 1 Supports CISCO AVVID network Y Available through the CISCO VoIP technology 2 Support Unified Messaging Y Available through the CISCO VoIP technology 3 Support Central Billing Y Available Through AVOTUS billing system 4 Provide Call Statistics Y Available through the CISCO VoIP technology 5 Provide Value for money Y Available through the CISCO VoIP technology 6 Support CTI Interfaces or API's Y Available through the CISCO VoIP technology 7 Provide low administration Overhead Y Available through the CISCO VoIP technology 8 L16
17 Ability to quickly and simply execute changes to system - inhouse Y Available through the CISCO VoIP technology 9 Ability to maintain in-house the corporate directory Y Available through the CISCO VoIP technology Corporate music selection on hold/transfer Y Available through the CISCO VoIP technology L17
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