Technology drivers 15. Why Cisco? 15. The network 16. Call control 18. Softswitch infrastructure 19. Contact management 20. Other IPC applications 24

Transcription

1 Cisco Powered Network IP Communications and IP Contact Centre Sales Toolkit A guide to selling managed IP Communications services to enterprises and small and medium businesses for Cisco Powered Network member companies Introduction 2 Why sell IP Communications and IP Contact Centre? Massive growth in IP telephony 7 Huge market for managed services 7 Importance of hosted call centre services 8 Cisco market positioning 11 The value proposition for IP telephony 11 Key applications for IP telephony 12 Service provider Business Why Cisco? 15 The network 16 Call control 18 Softswitch infrastructure 19 Contact management 20 Other IPC applications 24 Managed service versus do-it-yourself (DIY) 26 The opportunity for managed IP voice services 26 Why do companies out-task? 27 Choosing the right model for the customer 28 for IP Communications 31 What sort of companies are hot prospects and why? 31 Selling managed solutions 32 Who are the key decision makers to target 33 How to qualify a prospect 34 Opportunities for cross-selling 34 Key sales messages for IP Contact Centre 35 discussions for IP Communications Focus primarily on the business case, not the IT case 42 Help customers to show greater returns on smaller budgets 42 Legacy infrastructure barriers 42 Key lessons 43 How to handle a range of target sectors 44 Key markets for IP Communications 44 Mapping IP Communications to key enterprise vertical sectors 44 Killer applications Glossary of Terms 54 Disclaimer: Use of this toolkit is governed by the provisions of the Important Notices set out at

2 Introduction [1] [2] [2/54] What is IP Communications? Voice over IP (VoIP), or the transmission of voice telephone calls over a data network, has been available since the mid 1990s. Early doubts about its suitability for enterprise deployments have now been largely allayed, thanks to the increasingly widespread adoption of network architectures like MPLS. These networks offer Quality of Service (QoS) and can ensure time-sensitive traffic such as voice and video are given priority, along with security to ensure that data remains private on the shared VPN infrastructure. As this toolkit will explain, Cisco IP Communications offers much more than telephone calls. Firstly, it represents a new model for telephony, which is no longer centred around a PBX but is delivered as a range of services over a converged network infrastructure. Secondly, the network foundation of any Cisco IP Communications solution means that any number of additional services can be layered on top of it. As well as all the call control functions you would expect from a traditional enterprise telephony solution, Cisco IP Communications enables the deployment of powerful applications such as unified messaging, video telephony, and audio/video conferencing. All IP Communications services and applications can be managed or hosted by managed service providers, customer managed with connectivity delivered by the managed service provider or a combination of the two. This toolkit also gives one IP Communications application, Cisco IP Contact Centre (IPCC), a special focus due to the sheer size of the EMEA call centre market. This makes it an important target for providers of managed services. It is also important because IPCC is useful to customers who have not yet adopted IP telephony making it a highly flexible stand-alone solution that may become the trigger for introducing IP telephony and other IP services throughout an enterprise. IPCC is a strategic platform that allows customers to move beyond today s contact centre model towards a Customer Interaction Network, a distributed IP-based customer service infrastructure that consists of a continuously evolving suite of multi-channel services and Customer Relationship Management (CRM) applications. IPCC is available in three versions, IPCC Enterprise Edition which supports a large number of users, the smaller IPCC Express Edition, and IPCC Hosted Edition, designed to deliver managed services. What does this toolkit cover? This toolkit covers the key technologies behind IP Communications (IPC), including IP telephony and IP Contact Centres, and explains why IPC is such a powerful agent of change. Customers are not looking to simply replace their existing timedivision multiplexing (TDM) systems with exactly the same functionality based on IP. Instead, they are looking for new functionality that will leverage their investment in a converged IP infrastructure whilst offering them real business value through applications that improve employee productivity and customer satisfaction. This toolkit is a quick reference guide, a how-to guide and a technology and sales refresher. It explains why IP Communications is ideally suited to managed and hosted deployment, and highlights which companies are most likely to prefer this over building and managing it themselves (often referred to as a do-ityourself or DIY approach). This document will use the term managed to refer to both managed and hosted offerings unless stated otherwise.

3 Introduction [1] [2] [3/54] Although IP telephony and IP Contact Centre solutions can be delivered without an MPLS IP VPN (multi-protocol label switching IP virtual private network) infrastructure, this is their optimal platform for multi-site deployments. Providers with Cisco Powered Network designated networks are, therefore, well placed to take advantage of the huge market potential of IP Communications. The toolkit includes advice tested by Cisco sales people in the field on how to sell managed and hosted IP telephony and IPCC solutions. It also highlights the advantages of a Cisco solution over other manufacturers ( why Cisco? ). Most importantly, it covers essential facts for the sales people of companies offering managed services, including how to help customers build a business case for IP Communications, how an IP telephony or IP Contact Centre sale can generate substantial cross-selling opportunities, and how to handle to IP Communications in a market where perceptions are shifting. Capitalise on a huge opportunity IP Communications represents a huge opportunity for providers of managed services and their sales teams. Not only does it replace declining revenues from traditional voice services, it also provides the foundation for a range of enterprise-class solutions that will generate additional revenues and bring providers of managed services ever closer to a customer s core business. The Cisco Powered Network Programme This sales toolkit forms an integral part of the resources offered to members of the Cisco Powered Network programme. The programme offers the product development, market intelligence and sales tools needed to define new services, develop infrastructure and take new services to market. It enables members to accelerate successful deployment of new and enhanced managed network services like IP Communications. The programme is structured around a unique three stage life cycle model to successfully take a service to market Envision Your Service, Build and Maintain Your Service, and Market and Sell Your Service. This IP Communications sales toolkit is one of a number of powerful sales tools that support the Market and Sell Your Service stage of the life cycle. It will help you: > Identify and qualify IP Communications and IP Contact Centre opportunities > Understand the market and technology drivers > Communicate effectively with business and technical decision makers.

4 Why sell IP telephony and IP Contact Centre? [1] [2] [4/54] Today, acceptance of IP data networks as a resilient platform for voice is virtually complete. All major communications suppliers have now announced that their next generation products will be based on IP. Meanwhile in private networks, VoIP has already made significant inroads thanks to guaranteed Quality of Service and the overall cost savings achieved through convergence. Gartner Group summarised the situation in July 2003: "Companies should focus their planning effort into converged network architecture that will be the common transport layer for all business and communications applications. Investment in traditional PBX architecture should be limited to increments in capacity." Now it is no longer a question of "Why VoIP?" but "When?" and managed service providers are already beginning to see an erosion of their core business. A report entitled European Telcos Voice Support for Convergence by The Yankee Group in October 2003 shows European fixed-voice revenue for the business market declining rapidly, from 77 per cent in 2003 down to 61 per cent by VoIP no longer threatens to cannibalise service providers traditional voice business; it is set to replace it. With all this in mind, the top three reasons why IP telephony and IP Contact Centre matter to a managed service provider are: 1. Reducing churn The converged applications enabled by Cisco IP telephony can bring managed service providers much closer to a customer s business. So, too, can the application layering over the IP VPN foundation. This makes it much harder for customers to change providers than it would be for a commoditised service such as call routing. Applications such as unified messaging and IPCC, in addition to generating additional revenue streams, also reduce customer churn. According to The Yankee Group, bundling two services usually reduces customer churn by 25 per cent. Bundling a third product reduces it by an additional 13 per cent and a fourth product reduces churn by an additional six per cent. 2. Meeting customers requirements: flexibility, cost efficiency, productivity Cisco IP telephony and Cisco IP Contact Centre can improve a managed service provider s chances of closing a sale by enabling them to meet more of their enterprise customer s key requirements today. > Flexibility: through an unparalleled range of delivery options from DIY to managed and/or hosted services or a combination. > Cost efficiency: in addition to the inherent savings of a converged, IP-based solution, managed and hosted services reduce or eliminate hidden ongoing operational costs. > Productivity: applications enabled by IP Communications can change how an organisation works, leading to improved employee efficiency.

5 Why sell IP telephony and IP Contact Centre? [1] [2] [5/54] 3. Creating new revenue streams and protecting existing ones In the long term, IP Communications offers providers of managed services greater potential for new revenue generation than TDM-based services as the chart on the right indicates. Top 10 Applications Demanded by Service Providers Today Source: the Yankee Group, 2003 Type of Applications IP Communications allows managed service providers to use services such as IP telephony and IP Contact Centre to ensure that they maintain ownership of run-rate revenue streams from: telephony minutes, network connectivity and maintenance contracts. IP Centrex Conferencing Unified Communications Contact/Call Centres IP VPN A wide range of applications can be added on top of IP telephony. Converged applications that combine voice, data and other media such as video are of particular interest to enterprises because they have been shown to improve productivity significantly. Voice Mail Calling Card (Pre-paid) Mobility Voice Portal Announcements IP telephony also creates opportunities for cross-selling. It can be the catalyst that allows managed service providers to expand from wide area network (WAN) management into local area network (LAN) with offers of LAN upgrades to support QoS, security and wireless LAN features. Possibilities also include LAN management and the provision of additional services such as managed security and application hosting Per cent of Respondents

6 [6/54] As mentioned earlier, IP Communications is linked very closely with the customer s business processes. The managed service provider sales team has the important role of translating the features and benefits of an IP Communications infrastructure into advantages to their customer s business processes. Therefore, sales teams must be able to understand the customer s business processes that are based on or influenced by communication and determine how changes will benefit the customer. Effectively, they must be able to see the big picture and be able to translate this into advantages to the customer. Seeing the big picture means rising above the technology components, in order to obtain a 360-degree view of the customer s business and determine the obstacles that must be overcome. The chart on the right takes a look at the key business challenges a large retail bank may experience and possible solutions. All of these solutions are broader than just telephony but IP Communications is broader too and capable of addressing the bank s issues. It is, therefore, important to build up vertical knowledge of a sector and develop sales messages that form the basis of discussions with customers about their communications needs. It is, therefore, important that account managers never lose sight of the big picture. For example, a LAN upgrade that is essential to the deployment of IP telephony could be seen as expensive and complex by a customer. Once the customer is Example of key business challenges a retail bank faces include: Issues Customer retention. In a fiercely competitive market, the bank needs to become better at understanding its customers in order to provide them with appropriate service levels and contact channels. Reducing operating costs. The economic downturn has made this a high priority for all banks. Increasing employee productivity. Closely linked to the first two challenges, this is about giving employees the tools they need to work more effectively, no matter where they are located, with a strong emphasis on upgrading the environment in the branch network. Supporting mobility needs. Most retail finance institutions have specialists (e.g. real estate specialists) who have to travel between different branches for meetings with customers. convinced of the overall business benefits of convergence and sees IP telephony and IPCC as part of a wider convergence strategy, this will move the discussion away from IP telephony as just a dial tone refresh. Solution Improve customer retention, by giving all customerfacing staff (for example, in the contact centre or the branch) access to relevant data before they engage in a customer contact. Reduce costs, by rationalising branch data and communication networks (including telephony, ATM machines, key-code security) onto a single network, and by consolidating disparate call centre systems onto a single, more flexible and service-rich solution. Increase employee productivity, by using IPC and its underlying converged infrastructure to deliver applications and to employees, including elearning, business video and audio conferencing, unified messaging and employee mobility solutions. Support mobility needs, by allowing travelling specialists or regional managers to log themselves into the telephone system in all branch offices and be reached via their own telephone number, no matter which office they are in.

7 [1] [2] [3] [4] [5] [6] [7/54] Enterprise IP Voice Services in Europe In US Millions VoIP VPN Services 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Hosted and Managed IP Voice Services Source: Probe Group LLC ,028 1,450 1,730 3,553 5,739 IP Communications represents a substantial opportunity for providers of managed services to grow revenues and reduce costs. This section demonstrates the size of the opportunity, together with the main market drivers for IP telephony and IP Contact Centres. Massive growth in IP telephony Among industry analysts and enterprise users there is now a consensus that IP telephony will soon take over from traditional circuit-switched telephony as the dominant enterprise delivery method. In March 2004, IDC predicted that IP PBXs would grow to approximately 40 per cent of all installed PBX systems in Western Europe by Cisco s own calculations, based on a number of analysts forecasts, show that IP systems shipments will match traditional systems for the first time in A key factor is that a typical lifecycle of a PBX is seven years and many companies replaced or updated their PBXs in 1999 due to concerns over Y2K issues. Huge market for managed services Though enterprises recognise the compelling business benefits of a converged network for IP telephony and data, some have hesitated to migrate because of initial investment costs and perceived technical complexities. Those who hesitate typically cite the following investment concerns with implementing their own IP telephony solutions: > telephony is a tool, not the company's core competency > unwanted capital expenditure (CapEx) > fear of obsolescence > unpredictable operational expenditures (OpEx). Later sections of this document discuss these issues in more detail. The main point is that managed service providers have a significant opportunity to increase their revenues and address these customer concerns by offering managed and/or hosted IP telephony services. According to Probe Group LLC (VoIP Spreading in the European Enterprise, January 2004), hosted and managed VoIP service revenue made up 60 per cent of total VoIP revenues in 2002 and is expected to rise to 80 per cent by 2008 representing a Compound Annual Growth Rate (CAGR) of 153 per cent and a market size of over $5.7 billion (over 4.6 billion).

8 [1] [2] [3] [4] [5] [6] [8/54] Hosted call centre market size Call centres Call centres (000s) (000s) Agent Agent positions positions (000s) (000s) Importance of hosted call centre services The market for hosted and networked (managed) call centres is growing rapidly, and Datamonitor sees this as a key trend over the next three years. They also claim that 7.5 per cent of the agent positions in EMEA are in networked call centres, and this will rise to 8.4 per cent by They expect EMEA hosted agent positions to increase from 2.1 per cent to 8.4 per cent by The business case for IP telephony How IP telephony aligns with the new Chief Information Officer (CIO) mandate: > deliver revenue-generating applications and features Market drivers for IP telephony The list on the left is taken from a report by The Yankee Group which highlights a change in the way that the performance of an enterprise IT department is measured. A few years ago, IT departments would be fulfilling their mission if they stayed within budget and the company s IT systems were available. Today, however, CIOs must meet much higher expectations from their business colleagues such as using technology to drive productivity and cut costs. The Yankee Group has shown how IP telephony helps CIOs to respond to these apparently conflicting demands. On the next page, we look at three items on that list in more detail. North America APs North EMEA America APs APs EMEA North America APs CCs North EMEA America CCs CCs DATAMONITOR: EMEA Contact CCs Centre Markets and Technologies > reduce costs > service an increasingly mobile and distributed workforce > use technology to increase productivity > unify all communications platforms > align IT with business processes. (Taken from The Yankee Group report entitled Hosted IP telephony Offers a Path to Convergence by George Hamilton, September 2003)

9 [1] [2] [3] [4] [5] [6] [9/54] Deliver revenue-generating applications In the early days of IP telephony, cost savings were seen as the key market driver. Today, however, the situation is changing. Firstly there is a recognition that, when companies replace their traditional telephone systems with IP telephony, they are not simply replacing like with like. This is because IP telephony offers far greater capabilities than traditional systems in terms of the converged voice, data and video applications it enables. Secondly the market has evolved. IP VPNs are rapidly becoming the preferred platform for converged enterprise networks for more, see the Cisco Powered Network IP VPN Sales Toolkit (in the section on ). Reduce costs Clearly, companies are seeking to reduce their IT costs while at the same time ensuring that their investments generate business value. The majority of enterprises that are already planning to move towards IP telephony (and, consequently, a converged network environment) will be aware of the financial benefits of running one combined voice and data infrastructure rather than two separate ones. These benefits including reduced administrative and management complexity remain compelling. IP telephony also delivers some quantifiable savings over traditional telephony, such as low cost, low complexity moves, adds and changes and the possibility of zero charges for on-net calls between sites (toll bypass). However, managed service providers should not worry about cannibalising their existing revenue streams, as IP telephony, particularly hosted solutions, allows them to retain call minute, maintenance and connectivity revenues whilst generating new revenue. Service an increasingly mobile and distributed workforce Unlike its traditional counterpart, IP telephony is able to support flexible new working practices such as mobile and remote working. Employees are no longer tied to one particular physical location within the company, but can use their own extension number and services such as voice mail from any IP phone on the network (including remote VPN access). Similarly, it is not only cost effective but also very straightforward to offer both mobile and remote workers access to the same converged applications that their colleagues use at the company headquarters. This flexibility gives an enterprise much greater agility in responding to market and economic conditions, without busting the budget.

10 [1] [2] [3] [4] [5] [6] [10/54] Market drivers for IP Contact Centres The key market drivers for the introduction of IP Contact Centres include: > consolidation of disparate legacy call centres > workforce reachability and efficiency e.g. near-shore, offshore, region-based, back office > higher call success rates using more intelligent pre-routing > growth in multimedia and demand for new services > more efficient multi-channel queue handling for small and medium-sized businesses > cost efficiency, workforce efficiency and new revenue streams. Datamonitor (Contact Center Component Technologies to 2007, November 2002) has highlighted six technologies that will dominate the call centre market through to 2007: > Multimedia > IP technology > Networked call centres > Speech recognition/interactive Voice Response (IVR) > Outbound dialling > Workforce optimisation. We look at three of these drivers in more detail, to see how technology trends are linked with business objectives. Multimedia The number of contact centres with multimedia routing capabilities in EMEA is rising and will represent, according to Datamonitor estimates, 15 per cent of the total by 2008, compared to six per cent in Enterprise markets will start to offer their customers greater choice of interaction channels as part of a wider move to improve service and customer loyalty. Media such as video are enabling new business models where consumers can be brought face to face with remote specialist consultants, for example, for financial discussions or specialist product advice. This is creating entirely new markets for IP Contact Centres which are not currently covered by most analyst data. IP technology Companies are looking for greater flexibility on the part of their call centre technology (for example, more responsive capacity management and more control over call routing changes). They also want integration between the call centre and their organisation s main network to allow them to make specialist resources (for example, mortgage experts) available to take customer calls from agents when necessary. IP technology enables this reachability, flexibility and control. Networked call centres Datamonitor sees a huge opportunity for providers of managed services to move up the value chain and make more use of their own infrastructures by capitalising on these growth areas.

11 [1] [2] [3] [4] [5] [6] [11/54] Cisco market positioning Cisco has seen the following growth in IP telephony sales: > three years to ship one million IP phones > one year to ship its second million IP phones > nine months to ship its third million IP phones. Cisco IP telephony users cross all industry and government sectors, for example, large financial institutions like Abbey (the UK s largest bank focusing on private customers), Lehman Brothers (global investment banking and financial services), insurance companies such as Standard Life (UK) and Barmer (leading German health insurance provider), manufacturers such as Heinz, and healthcare trusts and hospitals such as Landspitali (Iceland s largest hospital). Cisco customer contact solutions are now experiencing a similar growth curve. Industry analysts Frost & Sullivan awarded Cisco IP Contact Centre their 2004 Market Penetration Leadership Award in recognition of its market share increase between 2001 and 2004 by deploying more than 1,700 IP Contact Centre systems and achieving a leadership position in IP contact centres and fifth position in the overall ACD market. Cisco IPCC users include companies as diverse as: 7CLtd (a UK service bureau), AlgoSystems (a major systems integrator in Greece), BKW (a German utilities group), Carphone Warehouse (Europe s largest independent mobile communications retailer), Ce-TIAM (a French health insurance provider), Diageo Plc UK (a consumer goods manufacturer), the First International Bank of Israel, IFDS (a UK financial services provider), Pan Gas (a German utilities company), Sony Netherlands (an electronic consumer goods manufacturer) and Telepassport (a German telecoms provider). IP Communications more than just telephony IP Communications allows people in business to communicate with each other in a variety of ways that help them to do their jobs more effectively. It includes: > IP telephony > unified messaging, including voice mail > Interactive Voice Response applications > video telephony > IP audio and video conferencing > customer contact solutions > security solutions > network management. The value proposition for IP Communications The previous list demonstrates the sheer breadth of applications enabled by IP Communications. These bring a range of productivity and financial benefits to customers. By integrating with the customer s business processes at many levels, they enhance an organisation s ability to serve its own customers. They also generate productivity improvements throughout the business: for example, employees personal and workgroup productivity has been shown to improve by 10 to 40 per cent as a result of introducing applications such as mobility and unified messaging. When used in conjunction with IP telephony, Cisco IP Contact Centre allows companies to establish a Customer Interaction Network. Traditional call centre environments placed many restrictions on how and where a company interacted with its customers. The Customer Interaction Network gives companies much greater flexibility in how they communicate with their customers, including the ability to make the entire organisation available to customers as required. The result is a business environment that really does put the customer first a key objective of virtually every commercial and public sector organisation today. In summary, the ability to integrate voice, data and video in new, multimedia applications offers customers genuine value on top of the telephony features that they already know it really is more than just telephony.

12 [1] [2] [3] [4] [5] [6] [12/54] Key applications for IP telephony Cisco s own expanding series of IP telephony applications includes: > Cisco IP Contact Centre an evolving suite of multi-channel services that takes contact centres to a new level, providing organisations with access to a broader range of resources and control, including an unlimited pool of agents and specialists, creating a Customer Interaction Network > Cisco Unity enterprise and SMB unified messaging, where individuals receive their , voice and fax messages via a single inbox, accessible via telephony, PC or mobile device > Cisco Personal Assistant streamlines communication by helping employees manage how and where they can be reached > Cisco MeetingPlace a rich media collaboration tool which brings the power of shared visual images to audio conferencing by sharing data, voice, video and applications with other users over the web > Cisco VT Advantage (with CallManager Version 4.0) adds video telephony to the Cisco CallManager solution so that real-time, person-to-person video sessions can be incorporated into telephone and conference calls whilst remaining as simple to use as a telephone. In addition, there is a growing range of third party applications for Cisco IP telephony that take advantage of the solution s open standards. Among the most popular are applications written in XML (extensible mark-up language) for use on Cisco IP phones. These enable Cisco IP phones to be used as a Web browser or substitute PC, and are particularly useful for displaying in areas of the workplace where PCs are not generally found, such as on the shop floor in a retail environment, in manufacturing facilities, and at airport and railway terminals. Such applications include: > Mind Enterprise IP system (M.E.IP.S) from MIND CTI a comprehensive, centralised, easy-to-use enterprise billing, accounting and network communication management solution, featuring Web tools for voice tracking and reporting across traditional and IP telephony networks. > Nevotek V/IP-Suite is a state-of-the-art property management system gateway designed specifically for Cisco CallManager. It reduces hotels operational expenses while increasing their services revenues and providing staff with innovative ways of managing room status and availability. > NICE Systems patented VoIP technology provides a full range of recording applications for Cisco IP telephony. It allows organisations to record across new communication channels whilst capturing and analysing interactions for compliance, risk management or quality management. > equality ContactStore IP from Witness Systems allows any or all calls made on Cisco CallManager to be recorded. The XML interface on the IP phone enables the distribution of particular calls to the appropriate parties, and users with security permissions can search for and replay calls using their Web browser.

13 Service provider Business [1] [2] [13/54] Managed service providers can capitalise on enterprise adoption of IP telephony by offering managed business voice services to multiple business customers over a shared infrastructure. Managed IP Communications can be divided into two main deployment models: > managed on-site, where nearly all the equipment is located on the customer s own premises, and may be owned either by the customer or by the managed service provider. The managed service provider actively manages the service via an always on connection and typically also provides WAN connectivity and PSTN breakout. > hosted services, where the majority of the call control components reside within the managed services provider s infrastructure, with customer equipment limited to phones and, in some cases, gateways. The managed service provider will nearly always manage the service and provide WAN and PSTN connectivity. Whether managed or hosted, leading managed service providers are offering a comprehensive portfolio of revenue generating services, including some or all of the following: > managed or hosted IP telephony services: providing IP subscriber and group calling features, such as paging, intercom, multi-party conferencing, hunt groups, call forwarding and call transfer on a range of CPE, including Cisco CallManager, Cisco CallManager Express, remote IP phones, and even traditional TDM PBXs with a VoIP CPE gateway. > site-to-site voice VPNs: enabling a business to use the provider's VoIP infrastructure for toll bypass between its sites/branches. This is a business voice service delivered over an IP VPN that offers private site-to-site voice connectivity. The service allows customers to interconnect existing onsite TDM or IP telephony systems. For the managed service provider, these services increase demand for VPN capacity, creating opportunities to upgrade customers from basic low-speed IP VPNs to higher value, faster ones with QoS whilst using the same core IP VPN infrastructure. > PSTN access: PSTN connectivity is typically included with the Voice VPN service, enabling the service provider to secure the customer s PSTN call minutes. Having connected all the enterprise s branches/sites together and to the PSTN over a single converged IP VPN, providers can then pass on some of the savings of the central PSTN breakout to make the service even more attractive. These savings can be gained from use of the IP network to get to the closest PSTN gateway to the destination ( forced on-net ), volume discounts through aggregating multiple businesses traffic, or savings from lower cost IP to IP interconnects to other carriers. > managed and hosted unified communications: the managed service provider delivers unified messaging services (voice mail, , fax and find me/follow me) allowing end users to decide how they choose to receive messages and calls. The solution can be deployed at the customer s premises or reside in the managed service provider s network. As a centrally provisioned service, it is easy for a provider to let a customer try the service with a few users before a full scale deployment. > enhanced IP Communications services: managed service providers can also capitalise on the emerging revenue opportunities from managing enhanced IP applications.

14 Service provider Business [1] [2] [14/54] Service providers can leverage the scale of their shared VoIP infrastructure to offer additional value-added network services such as: > managed service network-based private dial plan management with a softswitch like the PGW 2200 within the infrastructure, a managed service provider is able to manage a customer s dial plan centrally. This is considerably more efficient than configuring each PBX separately. > call barring for example, the managed service provider can, at an enterprise s request, prevent calls to international, mobile, premium rate or any other set of numbers, by extension and/or time of day. > call reporting most businesses like to monitor their telephony usage, in order to control how employees are using their phones and make educated decisions about future requirements. Businesses also need to monitor their provider s performance against service level agreements. Cisco s Business Voice Services enable providers to offer online, Web-based reporting, ensuring customers can retain full control over their outsourced services and providing them with peace of mind about the level of service they are receiving.

15 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [15/54] This section of the toolkit provides an overview of the key elements that make up Cisco IP Communications. These are: > the network > call control > the softswitch infrastructure > contact management > IPC applications. Key selling points are highlighted alongside a summary of each technology or solution. First, however, is an answer to the question: "Why Cisco?" Why Cisco? Cisco entered the IP Communications market in 1995 and has more experience in IP telephony and its enterprise applications than any other vendor. As well as this track record, here are six good reasons why managed service providers should sell Cisco IP Communications in preference to other vendors solutions: > To leverage their companies investments in Cisco technology, in particular MPLS IP VPNs, as this platform is typically the basis of every IP Communications solution. > To ensure a steady stream of opportunities in future because Cisco s IP Communications and network services portfolio is so comprehensive (including, for example, contact centre, wireless, security and storage), it gives managed service providers many opportunities for future up-sales based on integrated solutions. > To reduce customers risk Cisco IP Communications is an end-to-end solution whose individual components were designed to work together. This ensures that essential functions such as security, performance and reliability are not just present in point products but interwoven throughout the network, which reinforces their effectiveness. > To enable customers to migrate from TDM-based systems to IP at their own pace. Cisco IP telephony and Cisco IP Contact Centre solutions were designed to interoperate with traditional systems. > To leverage Cisco s world class service and support. The Cisco Advanced Services organisation has unique experience in network assessment, design and deployment, as well as ongoing support services, which can complement the capabilities of service providers. Specifically it can offer an assessment service for a company s IPT readiness and its financial justification. > Cisco Capital Financing Cisco Capital is Cisco s in-house financial services company, providing competitively priced financing to both service providers and end user customers. Leasing can be an important tool in selling IP Communications, enabling service providers and customers to reduce initial capital expenditure, improve return on investment, lower total cost of ownership, and manage cash flows. Many of Cisco s largest IP Communications sales have incorporated leasing solutions.

16 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [16/54] The network Cisco IP Communications solutions are designed for deployment over a Cisco-based MPLS IP VPN infrastructure. This section of the toolkit explains why this is the ideal scenario, the alternatives, and the benefits of the infrastructure to both the provider and their customers. MPLS any-to-any connectivity with QoS Although there are several ways to build IP VPN services, only MPLS fully satisfies all of the enterprise and SMB requirements for connectivity, resilience, security and Quality of Service, while also being easy and cost efficient to implement for the managed service provider. KEY SELLING POINTS: Because MPLS is connectionless, it is ideally suited to companies that need direct connections between many distributed sites (often known as any-to-any connectivity). In addition, MPLS is flexible and scalable, allowing managed service providers to change bandwidth or connect new sites more rapidly and easily than other solutions. Traffic engineering and Quality of Service supporting voice, video and data Quality of Service (QoS) is essential in order to run time-sensitive traffic such as voice or video over a converged network. One of MPLS s key differentiators is class of service. Class of service is a set of QoS parameters pre-selected by the managed service provider to support various types of traffic. Another advantage of MPLS is its traffic engineering capabilities. By making transmission more efficient, it reduces the cost of the network and interoperates with QoS to improve the overall level of service delivered to customers. KEY SELLING POINTS: Class of service allows managed service providers to offer differentiated IP services. The three classes below are the most common, however some providers offer as many as five different classes. Gold would guarantee latency and delivery for mission critical business applications such as packet telephony/voip traffic or real-time video. Silver would guarantee delivery and be used for more general applications that are not as sensitive to delay and jitter, such as e-commerce SNA and Oracle. Bronze could be used to support File Transfer Protocol, and other best effort applications. IPSec enabling remote VPN access One of the key issues for companies with mobile and home workers is providing them with secure and cost-effective access to their corporate network. IPSecurity (IPSec) is a VPN architecture that ensures confidentiality, integrity and authenticity of data communications across the public Internet. Based on open standards, it is easy to deploy and uses a range of tunnelling and encryption mechanisms to protect packets in transit. This makes IPSec ideal for securing remote access connections to a corporate VPN. KEY SELLING POINTS: Cisco has a comprehensive IPSec-based solution which interoperates fully with its MPLS IP VPN solutions.

17 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [17/54] The network (continued) Broadband access leveraging a pervasive technology KEY SELLING POINT: Broadband is becoming widely available, not only in hotels, libraries and other public places but also in the home. Broadband s ubiquity makes it ideal for both IPSec access and direct MPLS delivery. Remote workers can then save money by making and receiving calls over these connections using PC-based Softphones (a Cisco IP telephony application) instead of their mobile telephones. QoS engineering in the LAN opening up a new managed service provider market IP Communications deployments require QoS, and this requirement extends to the LAN as, even at high bandwidths, multiple data streams compete. Virtual LANs (VLANs) are a typical mechanism to separate voice endpoints (IP phones) from data endpoints in the LAN for both QoS and security. This means the capabilities of the LAN must be considered for each deployment and upgraded if necessary. KEY SELLING POINTS: It is important for managed service providers to ensure that the customer s LAN infrastructure is able to support converged IP Communications applications. The fact that this discussion needs to happen during the sales process also allows the managed service provider to explore the possibility of not only upgrading the customer s LAN, but also taking on its management. Typical topologies evolving at the customer s pace When selling IP Communications, managed service providers are able to assure potential customers that all elements of the solution will be compatible with their traditional telephony systems and existing applications because: 1. They can make a strong case for an end-to-end Cisco solution in the enterprise market where the majority of companies are already using Cisco IP-based technology in their data networks. 2. Cisco IP telephony solutions are designed to interoperate with TDM-based telephony systems. 3. Cisco IP Contact Centre solutions were created to co-exist with traditional TDM-based call centre systems. The key to being able to support a mixed environment is that Cisco IPCC and Cisco Customer Voice Portal 3.0 both contain built-in hooks to traditional systems. 4. IP Communications applications are designed for interoperability. Cisco IP Contact Centre supports connections to all leading CRM packages, including Oracle, PeopleSoft, SAP and Siebel. It also provides open integration points enabling custom integration, where necessary, via Cisco or third-party channel partners. Cisco Unity supports 80 per cent of all traditional PBX and the majority of those in use within EMEA. When used in conjunction with an existing voice mail system, it enables both sets of users to access exactly the same voice mail services but with the obvious advantage of being able to turn on unified messaging very easily.

18 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [18/54] Call control Cisco CallManager the enterprise class solution Cisco CallManager is the software equivalent of a PBX, providing enterprise telephony capabilities to packet telephony network devices (e.g. IP phones, media processing devices, VoIP gateways, and multimedia applications). KEY SELLING POINTS: Cisco CallManager is a scalable, distributed and highly available enterprise IP telephony call processing solution. > Scalable: multiple call processing servers can be clustered and managed as a single entity, with capacity for up to 30,000 IP phones per cluster. > Distributed: the ability to cluster Cisco call processing servers on an IP network is unique in the industry. It gives both managed service providers and their customers greater flexibility in how they deploy and manage their systems. > Available: Multiple redundancy options provide high levels of resilience. Cisco CallManager Express rich functionality for fewer users Cisco CallManager Express turns a Cisco access router into a PBX. Offering a robust set of common business features, it provides a cost-effective and feature-rich IP telephony solution for up to 100 users. KEY SELLING POINTS: Cisco CallManager Express makes deployment to a small site or branch office cost effective and very simple to deploy, administer and maintain. > Cost effective: One device (a Cisco access router) can deliver all business communications to the small office or branch, including IP telephony and voice mail as well as content networking, firewall security and enhanced VPN services. For small deployments, the same device can also provide LAN switching. > Feature rich: Cisco CallManager Express provides IP phone users with both key system and many commonly used PBX features.

19 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [19/54] Softswitch infrastructure The softswitch infrastructure that supports Cisco IP telephony solutions provides carrier-class PSTN signalling and call-control with multiple interfaces that allow full integration of TDM PBXs, IP telephony and PSTN connectivity. KEY SELLING POINTS: > Exceptional flexibility in terms of industrystandard control protocols. These include Media Gateway Control Protocol (MGCP), H.323, Session Initiation Protocol (SIP), and over 100 variants of Signalling System 7 (SS7). Service Portfolio Business Phone Services Site-to-Site Voice VPN PSTN Access Remote Network Management and Operations Voice Infrastructure Hosted Call Manager M M M M M M PGW 2200 Softswitch AS5000 MGX8000 V Unified Communications PRI/ISUP PSTN IP Contact Centre Enhanced IP Services > Full integration with Cisco IP Contact Centre the softswitch allows the intelligent routing engine (ICM) within IPCC to instruct the softswitch how to handle each call. > A central billing platform for managed service providers which reduces the administrative costs of billing and offers the ability to provide enhanced reporting, leading to improved customer service. > Intelligent call routing in the IP network, enabling the Voice VPN service features such as private multi-site dial plans, least-cost routing, PSTN and IP carrier interconnects. Customer Deployment Options Hosted CCM Onsite CCM Call Manager Express TDM PBX IP IP V IP IP M IP IP M V > A high level of versatility resulting from a managed service provider-designed, end-to-end infrastructure that offers scalability, resilience, efficient breakout to the PSTN, and the option of integrating multiple PBX and IP PBX technologies into one complete service.

20 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [20/54] Contact management The changing face of customer service towards a Customer Interaction Network TDM-based call centre systems were designed to fulfil specific business requirements. Yet for most companies with a critical customer service function those requirements have now changed. Services based on Cisco IP Contact Centre meet the key business requirements of companies today, which are: > Multi-channel capabilities consumer demand for new communications channels, such as and the Internet, mean that multi-channel capabilities are now becoming essential for most companies. > Protection of legacy investment companies have invested heavily in TDM-based call centre systems. According to IDC, $2.53 billion (over 2 billion) worldwide between 1997 and Successful migration from TDM to IP systems is, therefore, a crucial issue. > Location independence in order to improve their service to customers, companies are looking for greater flexibility in how they deploy and run their contact centres. The ability to have agents anywhere whether in a dedicated facility, in a branch office, at home, or in an off-shore location is becoming increasingly important. > Application integration and CTI (computer telephony integration) companies are also looking for much greater integration between agents and the business, in particular through links to back-office systems such as CRM applications and CTI screen pops. > Integration with the corporate telephony system a truly integrated IP telephony and IP Contact Centre solution allows companies to extend customer service capabilities across their entire organisation, thereby achieving a more cohesive and collaborative approach to customer service. This proposition, which Cisco calls a Customer Interaction Network, is unique in the industry today. The following section explains in a little more detail how the Cisco solution works and highlights the key selling points that will interest a managed service provider. Cisco IP Contact Centre Hosted Edition a strategic platform Managed service providers can position Cisco IP Contact Centre Hosted Edition as a strategic platform that enables their customers to move towards a true Customer Interaction Network. Cisco IPCC Hosted Edition was specifically designed for managed service deployments, and enables a series of integrated services that can be introduced all together or in a phased manner. Managed service providers host the contact centre infrastructure software which is shared by multiple customers within their infrastructure. This enables them to provide a service to customers with IP or TDM infrastructures, or a combination of the two. The core components of Cisco IPCC Hosted Edition reside within the managed service provider s network, with the Cisco IP phones and agents PCs at the customer s premises. The two are connected via a QoS IP network, such as a MPLS VPN. Some of the key capabilities within Cisco IPCC Hosted Edition are summarised on the next page.

21 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [21/54] Contact management (continued) Location independence Unlike TDM systems, agents do not require specialised ACD phones. This means any company employee is a potential agent and full-time agents can be deployed more effectively. Intelligent contact routing Central to the solution is an intelligent contact routing engine with a configuration dedicated to each individual customer. Through a combination of customer data, contact centre data and user-defined business rules, it routes each caller/request to the most appropriate available resource anywhere in the organisation. It also delivers context call event and customer profile data as the contact arrives, allowing the employee to provide the customer with a more personalised and efficient service. Network routing with computer telephony integration (CTI) Cisco IPCC Hosted Edition offers outstanding functionality in enterprise CTI by unifying contact centre systems from the network to the desktop, with minimal custom development or systems integration. It provides a rich data set to the desktop through advanced computer telephony connections between the system, carriers networks, ACDs, IVRs, Web and servers. Information from these diverse sources is used to trigger CTI applications such as screen pops or voice and data transfers. The Cisco solution offers pre-routing capabilities, meaning that time-consuming database lookups take place and their results are delivered to the desktop before a contact arrives, thereby improving efficiency and customer service. The system also enables co-ordinated voice and data transfer by sending the customer s profile data along with the contact. This works across mixed environments, between different sites, and throughout the life of a contact. Rich functionality Options that managed service providers can offer as part of a hosted solution include: > Web collaboration features include sharing Web pages with customers while conducting a voice or text chat conversation, helping customers complete online forms, and sharing any Windows-based desktop application via the caller s Web browser > management gives customers the option of sending an for customer support, rather than placing a telephone call > Outbound enables the hosted system to deliver blended inbound/outbound calls to agents, providing greater agent productivity. Uniquely, the Cisco option is software-based and does not require dedicated, proprietary hardware. KEY SELLING POINTS: Cisco IPCC Hosted Edition is important to managed service providers because it: > enables them to address the huge contact centre market with a solution that will significantly reduce churn among their enterprise and SMB customers > is fully integrated into the Cisco architecture so very easy and cost effective to deploy > is a proven, enterprise-class solution from a market leader with 10 years experience and more IP-based contact centres currently connected than any other vendor > allows them to leverage their investment in Cisco technology and accelerate by offering a service creation platform for multiple customers > enables managed service providers to have more opportunities to generate additional revenue through new services as Cisco adds new features to its Customer Interaction.

22 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [22/54] Contact management (continued) Cisco IPCC Hosted Edition is important to enterprise and SMB customers because it: > offers them a smooth migration path for example, a company can equip a new site with an IP-based hosted solution and integrate its four existing TDM-based sites, creating what appears to be a single site deployment. Of course, the full functionality will not be achieved until all the sites are migrated > allows them to deliver a range of rich capabilities, not just to agents but to every employee, thereby improving customer service > gives organisations with multiple branch offices or divisions a centralised infrastructure and the ability to offer services to even the most remote or smallest sites > brings enterprise-class capabilities within the reach of small and medium-sized companies > provides customers with an end-to-end solution that is both flexible and scalable, reducing risk while helping them to manage costs and plan for future developments > uniquely, allows customers to control key network resources so that they remain in command of a business-critical application (these resources include assigning agents to skill groups and defining routing based on the number called, the calling-number and caller-entered digits such as account numbers). Cisco IP Contact Centre Enterprise Edition large scale, customer managed Like Cisco IPCC Hosted Edition, Cisco IP Contact Centre Enterprise Edition provides intelligent contact routing, versatile call treatment, efficient network-to-desktop CTI, and multi-channel contact management over an IP infrastructure. It is designed for deployment on a customer s premises and for management in-house by the customer. Cisco IP Contact Centre Express Edition smaller scale, customer managed Cisco IP Contact Centre Express Edition is a single-server, integrated contact-centre-in-a-box with integrated ACD, IVR and CTI functionality. It is designed to meet the needs of enterprise departments or branch offices and small or medium-sized businesses. Cisco IPCC Express Edition supports up to 200 agents and is available in three versions Standard, Enhanced and Premium to suit organisations that require either an entry-level or more advanced solution. Cisco IPCC Express Edition is deployed on a customer s premises and managed in-house by the customer.

23 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [23/54] Contact management (continued) Cisco Customer Voice Portal full functionality, service provider managed Cisco Customer Voice Portal provides interactive voice response (IVR) and queuing capabilities within an IP environment. It harnesses the power of IP to provide an efficient and scalable way of automating customer interaction. Cisco Customer Voice Portal integrates fully with traditional and IP-based contact centres and offers a powerful self-service IVR option. It provides Web-based prompt, collect, queuing and call control services. It has options for automated speech recognition and text to speech to allow callers to converse directly with the system. This allows callers to gain answers to questions and check their account status without ever speaking to an agent if required. KEY SELLING POINTS: These are some of the main benefits of Cisco Customer Voice Portal to customers that managed service providers should emphasise during the sales process: > reduced bandwidth consumption because Cisco Customer Voice Portal servers are deployed near the PSTN interconnect, prompting, collecting and queuing services only require local bandwidth > investment protection Cisco Customer Voice Portal is able to handle calls originating from the PSTN and then forward them to a traditional ACD-based contact centre > cost savings on call routings and transfers by controlling the routing process a Cisco Customer Voice Portal architecture uses much fewer ports than most other IVR systems and this efficiency saves the customer money > innovative platform Cisco Customer Voice Portal is based on VoiceXML, the standard for defining both traditional and emerging Web-based voice services. This allows customers to develop new, tailored services to voice-enable their Web content. It also lowers agent costs and improves access to corporate. > an end-to-end contact management solution Cisco Customer Voice Portal is fully integrated with Cisco IP Contact Centre and IP telephony solutions such as Cisco CallManager, so can offer a comprehensive and consistent approach to enterprise-wide functionality and management.

24 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [24/54] Other IPC applications Cisco Unity a proven migration tool for IP telephony Cisco Unity is a powerful unified messaging application that enables users to manage voice mail, and fax messages in one inbox, using familiar productivity tools such as Microsoft Exchange and Lotus Domino. In addition to richly functional voice mail, it allows users to listen to their s over the telephone, check voice messages from the Internet and (with a supported third-party fax server) forward faxes to any local fax machine. This enables an organisation s employees to become more efficient at handling business communications regardless of the media, and more available to customers, suppliers and colleagues whilst out of the office. Cisco Unity Express provides entry-level voice mail and automated attendant services for the branch office. It can be installed within many Cisco access routers and provides cost effective voice mail capabilities for up to 100 users. It also works with CallManager Express. KEY SELLING POINTS: Originally designed to work with TDM-based PBXs, Cisco Unity provides more interfaces to the traditional voice environment than any other enterprise product. Around 80 per cent of traditional PBXs and the majority of systems used in EMEA are supported. Such compatibility allows customers to install Cisco Unity and connect it to their traditional telephony systems without deploying IP Communications or a converged network. Managed service providers can, therefore, use Cisco Unity as a Trojan horse allowing their customers to experience some of the benefits of a converged IP-based environment before they commit to adopting it throughout the organisation. Cisco Personal Assistant empowering employees Cisco Personal Assistant helps a company s employees manage their communications by providing easy-to-use administrative assistance for mobile workers. Key features include: > personal call rules a Web interface allows employees to forward and screen calls based on caller ID, time of day and meeting schedules > automatic speech recognition so that users can perform tasks, such as dialling entries in their personal address books, with simple voice commands > productivity services for Cisco IP phones employees can use Cisco IP phones to check , voice mail, personal contact and calendar from the corporate Microsoft Exchange server. KEY SELLING POINTS: Speech-enabled access to voice mail, the corporate directory and personal contacts lists from any phone makes employees more productive. Web-based interfaces to setup call handling rules help to give individuals more control over how they manage and prioritise tasks.

25 [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [25/54] Other IPC applications (continued) Cisco video telephony adding the power of visual communications Cisco video telephony brings video capabilities to the desktop. Cisco VT Advantage adds video functionality to Cisco CallManagers with either midrange or high-end Cisco IP phones. The application enables the user to see the person they are talking to on the phone on their PC s screen. All the calling functionality runs through the phone, giving users the ability to put a video call on hold, transfer it, or press a conference button to start a group meeting. KEY SELLING POINTS: Video telephony looks like becoming a killer application for some customers. At a time when many companies are cutting down on international travel for their employees, they continue to recognise the importance of face-to-face discussions in business communication. One of the biggest customer benefits of this application is that it brings video conferencing to employees desktops, instead of a dedicated facility, and makes it both cost effective and easy to use. Cisco MeetingPlace for improved collaboration Cisco MeetingPlace is a rich media collaboration tool offering Web and audio conferencing. It harnesses the power of IP to make it much easier for users to schedule or join a conference, and enables more spontaneous and effective business communications using rich media. KEY SELLING POINTS: The voice conferencing market is currently worth approximately $2.5 billion (over 2 billion) and continues to grow between 15 and 20 per cent each year. The Web conferencing market is currently valued at $500 million ( 408 million), but is growing by 40 to 50 per cent every year. Cisco MeetingPlace allows managed service providers to take advantage of this buoyant market and gives them yet another way of adding value to their overall IP Communications offer. SALES CUE: Cisco Unity voice mail and unified messaging solution provides more interfaces to the traditional voice environment than any other enterprise product.

26 Managed service versus do-it-yourself [1] [2] [3] [4] [5] [26/54] Managed IP Communications can be offered in a variety of delivery models: > as a hosted service where equipment is housed in the managed service provider s network, available to one or more companies and usually managed by the provider > a managed on-site service where call control functionality and IP phones reside on the customer s premises and are remotely managed by the managed service provider; this service is dedicated to that one customer > a DIY service where all the equipment is owned by the customer, located on their premises and managed by their internal IT/communications department > any combination of the above for example, one company might run a TDM PBX at one site, locally managed CallManager Express at another, locally managed CallManager at a third, while hosted CallManager services are delivered to IP phones at a fourth location. The DIY approach is most likely to appeal to extremely large organisations, especially those with extensive in-house IT resources and no history of outsourcing. DIY is often an appropriate choice for those organisations and it may be difficult, even impossible, to persuade them to change. The vast majority of companies, however, are good prospects for managed services. This is the reason this toolkit concentrates more on the managed and hosted IP Communications offerings. The opportunity for managed IP voice services Research by Probe Group LLC (VoIP Spreading in the European Enterprise, January 2004) shows the size of the opportunity for providers of managed services in Europe. The market for hosted and managed IP voice services is expected to grow from $81 million ( 67.2 million) in 2003 to $5.7 billion ( 4.7 billion) in Not only do these services allow managed service providers to retain customers wanting to move away from TDM PBX systems, they also allow them to offer higher-value outsourced services that are not possible with legacy TDM PBXs. These include converged voice/data network, fault monitoring and performance management services, intra- and inter-enterprise voice services, centralised PSTN access, and managed/hosted unified messaging services. SALES CUE: Remember that the hosted IP Communications service is much more than a server in a data centre; its network-designed architecture is designed for maximum redundancy, security and performance.

27 Managed service versus do-it-yourself [1] [2] [3] [4] [5] [27/54] Why do companies out-task? Companies out-task for a number of reasons. Research by Cisco s Internet Business Solutions Group (IBSG) found the following top three drivers for out-tasking IP telephony: Driver for out-tasking IP telephony Reducing operating expenses Making telecoms costs predictable and scalable Why? There are other significant benefits that companies can expect from a move to IP and managed service providers will be able to discover during the sales process which of the following benefits are most relevant to each customer: Because fewer specialist IT resources are needed, freed resources can concentrate on core business areas Because customers payments are based on a utility model of monthly per-user fees, this avoids capital expenditure liabilities that would normally be on the company s balance sheet > companies can focus on their core business while the managed service provider takes care of transporting their voice traffic > managed services can significantly reduce the total cost of ownership for companies. Reasons include a reduction in floor space required in-house, fewer specialist IT resources, reduced training requirements, and avoidance of technical obsolescence issues > greater flexibility because companies pay for what they need, with minimum capital outlay, and they can add or delete users very quickly and easily > the utility model allows services to be packaged as a bundle for example, access to shared services such as voice mail, unified messaging and IP Contact Centre giving companies a one stop shop that further reduces costs and increases corporate agility Simplifying and reducing risk in migration to IP telephony Because managed service providers are seen as trusted partners by enterprises, and their services are underpinned by SLAs which give customers peace of mind > more sophisticated applications such as Cisco IP Contact Centre become more viable for smaller companies because the deployment costs are shared between multiple customers. SALES CUE: Remember that out-tasking is a financial decision that is rarely made by technical departments. It is usually a Board-level decision (CIO, CFO).

28 Managed service versus do-it-yourself [1] [2] [3] [4] [5] [28/54] Choosing the right model for the customer What are the key advantages and disadvantages of managed versus DIY IP Communications that will make one particular model appeal to certain customers? Key advantages to the customer Hosted model > Often more cost effective, as companies share the managed service provider s equipment and software resources > Proven, carrier-class service(s) > Suits companies that do not wish to give the managed service provider access to their site > Suits companies with limited space in which to locate equipment Key disadvantages to the customer Hosted model > Perceived loss of control or security issues due to shared resources > Dependence on the service provider s timetable for deployment and integration of enhanced IP Communications productivity applications such as Unified messaging, IP Contact Centre, etc. > Potential loss of corporate agility as it takes longer to provision new services or applications > Suits companies that have already outsourced telephony (e.g. TDM Centrex users) and want to continue to do so as they move to IP telephony > Management of complexity, including co-existence of legacy and IP systems during migration > Removes issues of in-house skills shortages and costs, and technology obsolescence > Supports the company s ability to react quickly to market conditions (IT is not a constraint) > Opens up more services and applications that might not be viable in-house

29 Managed service versus do-it-yourself [1] [2] [3] [4] [5] [29/54] Key advantages to the customer Managed on-site model > Perceived benefits of dedicated service rather than shared access security, control, ownership, etc. > Management of complexity, including co-existence of legacy and IP systems during migration > Reduces need for in-house skills to provide operational support for the system Key disadvantages to the customer Managed on-site model > Potentially higher CapEx costs depending on who owns the on-site equipment. Both managed service provider and customer owned models are common > Perceived security risk of giving the managed service provider access to the company s site in order to manage the service(s) > Suits companies with space for equipment on their premises DIY model > Suits companies with large in-house IT departments that are able to cope with management of business-critical communications systems > High level of customer control over security and other critical issues DIY model > Potentially higher risk, as the company is responsible for delivering services to its users > Higher cost of ownership due to increased capital expenditure, fewer economies of scale in management and maintenance, and technical obsolescence > Reduced flexibility in adding new users or services, increasing bandwidth, or deploying new applications > Company is responsible for managing complexity, including co-existence of existing and IP systems during migration

30 Managed service versus do-it-yourself [1] [2] [3] [4] [5] [30/54] Clearly, managed service providers will be able to make a strong case for both hosted and managed IP Communications services. more, even where customers choose to self-manage the system at the early pilot or limited deployment stages, often they choose the services of a managed service provider when they later deploy the system company-wide. Managed service providers can counter the perceived disadvantages of hosted and managed models by finding out as much as possible about the customer s business, its operation, and its strategic objectives. A disadvantage to one company is often a key benefit by another: for example, a company in a very fast moving market sector may need to be agile and focused on its core business. This company may prefer a hosted model, whilst other organisations with enough space on their premises may actually prefer to house their own deployments. In summary, there is no right or wrong answer when it comes to choosing between a hosted and a managed service. The greatest advantage of the Cisco IP Communications platform is that it enables managed service providers to offer the same solution in a form that meets their customers cultural and business preferences hosted, managed or DIY.

31 for IP Communications [1] [2] [3] [4] [5] [31/54] What sort of companies are hot prospects and why? Cisco IP Communications solutions are suitable for large enterprise, mid-market and small businesses alike. Large and mid-market organisations are ideal targets for both managed on-site and hosted solutions, while hosted services often appeal to smaller companies. Managed service providers typically focus their direct sales efforts on large and mid-market opportunities, with internal telemarketing teams or third-party partners targeting smaller customers. How to spot hot prospects for Cisco IP telephony > Customers moving to green field sites > Customers whose PBX is at the end of its lease, no longer supported by the manufacturer, or requires a hardware upgrade to support new software or more capacity > Customers who have a TDM infrastructure but recognise that IP is the future > Customers with end-to-end Cisco data networks > Customers with highly mobile workforces > Companies due to upgrade an existing TDM PBX upgrades on TDM-based systems can be costly and difficult, and customers facing this process on a critical business system may be more easily persuaded to move to IP > TDM-based PBXs upgraded for Y2K are already five years old and many companies are starting to replace these > Companies that are changing shape (growing, contracting or moving premises) How to spot hot prospects for Cisco IP Contact Centre > Customers who want to introduce multimedia capabilities into their contact centre > Customers who want to virtualise their contact centre by spreading skills groups across multiple locations > Customers with a TDM contact centre environment which comprises ACDs and IVRs from several manufacturers who want to virtualise their contact centre or introduce IP capabilities but maximise the return from existing investments > Existing Cisco IP telephony customers who left their contact centres on TDM technology > Help desk opportunities where the provider can offer a solution which includes the case management software > Companies that are due to upgrade an existing call centre solution upgrades on TDM-based systems can be costly and difficult, and customers facing this process on a critical business system may be more easily persuaded to move to IP > Contact centres upgraded for Y2K are already five years old and many companies are starting to replace these > Companies that are looking to standardise on one system, following a period of mergers and acquisitions that has resulted in a mixed IT and contact centre environment > Public sector organisations that are looking to deploy a contact centre solution in order to meet e-government targets, who, therefore, need an IP-based solution in order to manage Web-based contacts > Small and medium-sized organisations who could not justify the capital investment but would benefit from the technology.

32 for IP Communications [1] [2] [3] [4] [5] [32/54] Selling managed solutions Selling managed solutions is very different from selling products. In order to be successful, managed service providers need to gain additional skills. This is largely a question of training, but there are other considerations. Gartner s list of the top 10 reasons why carrier sales people don t sell managed solutions highlights many of these barriers to success and provides useful hints, including: 1. Don t focus too much on price price is hardly ever the primary selling point with managed services. 2. In a solution sell, the key is to ask questions and listen try to understand the customer s reason for considering managed services before making a pitch. 3. A solution sale is often a team sell, so be prepared to work with colleagues to ensure that you can answer prospects questions quickly and with added value. 4. A managed solution often involves external partners, so be ready to manage these relationships. 5. Managed solutions are often sold to a high level in the organisation CIO level rather than network manager so it is important to become comfortable in this role and learn how to approach this type of sale. 6. Be prepared to demonstrate the value your organisation brings as a managed service provider. 7. With managed solutions, companies are more interested in avoiding risk than reducing costs, although cost is always a relevant criterion. Make sure you are able to sell your company s stability, capabilities, methodologies and successes in this environment. 8. Be prepared to move outside your comfort zone, as technology (i.e. factual ) is only a small part of the training you will need to make a solution sell. 9. Remember that the optimum managed solution sale is one that is not tendered, or one in which the managed service provider has assisted in writing the specifications. 10. Managed service providers must ensure that their sales compensation strategy addresses the unique nature of managed solution sales.

33 for IP Communications [1] [2] [3] [4] [5] [33/54] Who are the key decision makers to target? As a general rule, managed service providers should first target the Chief Information Officer (CIO) or Head of Information and Communications Technology (ICT). Once the CIO is convinced by the converged solutions argument, the Chief Operating Officer (COO) or a Board-level target such as the Chief Financial Officer (CFO) might be an appropriate second target. The third target will be the Chief Executive Officer (CEO). IT organisational structure The CIO or head of ICT is responsible for integrated voice and data teams The CIO or head of ICT is responsible for two separate voice and data organisations The IT department manages data (computing) while the PBXs belong to site managers or facilities managers in each individual building When approaching a company, it is important to understand whether or not the organisation is converged in terms of how computing (data) and communications (telephony, video conferencing, etc) are managed. The level of organisational convergence will indicate whether or not it will be easy to sell a converged solution to the target. It is best to start by identifying who is responsible for the telephony structure. Within an enterprise or a public sector organisation, there tend to be three types of organisational structure: Progress towards convergence Converged organisation On the way to becoming a converged organisation Laggards who have not started to become a converged organisation If the organisation is already converged, this is a good indication that it already understands the benefits of network and applications convergence and will be culturally well aligned with a proposal for IP Communications. Organisations that are on the way to convergence are more likely to look at hybrid solutions rather than pure IP telephony solutions. In this case, managed service provider account managers should deal with the CIO or Head of ICT, in order to avoid getting caught up in any internal politics between the voice and data teams. There are two possible approaches to the third category of organisation: > go straight to Board level and over a period of time to demonstrate how they would benefit from convergence and discuss the re-structuring and business process re-engineering that will need to take place to enable convergence to succeed. The important messages here are completely non-technical > target one of the site or facilities managers to deploy IP telephony on a small scale in a single building and use this as a bridgehead to develop the installation elsewhere.

34 for IP Communications [1] [2] [3] [4] [5] [34/54] How to qualify a prospect This is an area in which managed service providers are already very experienced. However, in addition to the availability of a suitable budget within the target company, one particularly critical factor is likely to be the existence (or lack) of buy-in at Board level to convergence and IP Communications. This is because any IP Communications deployment should have a significant impact on the organisation and its processes. IP Communications will replace a specialised and centralised system (the TDM PBX or call centre) with a distributed solution, offering users much greater flexibility in how they use it. Since the introduction of IP Communications is likely to offer the ability to significantly improve an organisation s working practices, Boardroom acceptance of the technology and its implications for the business is absolutely essential. Opportunities for cross-selling Cisco IP Communications creates many opportunities for cross-selling other services such as managed LANs or managed security. Cisco IP Contact Centre and Cisco Unity can both be deployed without IP telephony on the customer s site. This means they can act as Trojan horses by allowing managed service providers to introduce IP telephony within one discrete application and then to extend its use throughout the organisation. Conversely, if a customer has started to introduce IP telephony and also has a customer service function, it will then be much easier to sell that customer an IP Contact Centre solution as a natural extension of the IP environment. Cisco IP telephony and IP Contact Centre complement each other perfectly, as together they create a Customer Interaction Network. Cisco IP Communications also creates opportunities for cross-selling into other areas of a managed service provider s portfolio, moving from the core service of WAN management into services such as: > LAN upgrades for QoS many companies will need to upgrade their LAN infrastructure before deploying an IP telephony solution, in particular to ensure that they will provide Quality of Service to prioritise time-sensitive traffic such as voice or video. > LAN management having upgraded a customer s LAN infrastructure, it is a natural progression for the managed service provider to manage that infrastructure. > Wireless LAN deployment companies with a workforce mobility strategy, or those whose business involves hosting customers (e.g. the transport sector) or suppliers (e.g. the retail sector) will be open to considering a wireless LAN service. > Security strategy managed service providers should always position security in every meeting and proposal. They should also seek to understand the customer s current security policies and decision making process. This is a good differentiator for Cisco, especially where the data network is Cisco based. > Security services large or distributed organisations in particular have a growing number of open data connections through broadband links to their regional or branch offices. This gives managed service providers the opportunity to sell a service such as a managed firewall in customer premises equipment (CPE). Other potential services might include: a security assessment service to audit the LAN and identify any areas of weakness increased security at the desktop, including virus protection, delivered by tools such as Cisco Secure Agent (CSA) which offers advanced host-based intrusion prevention and protection against a wide range of attacks fully managed security services for more, please see the Cisco Powered Network Managed Security Services Sales Toolkit (in the section on Where to get more ).

35 for IP Communications [1] [2] [3] [4] [5] [35/54] Key sales messages for IP Contact Centre The contact centre market is complex. The following checklist will help managed service providers cut through the complexity in order to focus on the key messages. > Contact centres are often linked to a CRM (customer relationship management) strategy, which means that they are often the subject of Boardroom discussion. > With very few exceptions, CRM is about increasing revenue, not about decreasing cost. If a contact centre is a major component of a company s CRM strategy, its introduction should not be viewed as a cost reduction exercise. > Productivity is key. Even if complex and difficult-to-integrate, contact centre technologies such as screen pops, automated outbound diallers and multi-channel integration can significantly improve agents productivity and this equates to return on investment. > While contact centres do not have to be IP-based to take advantage of such productivity-increasing technologies, migrating with an IP Contact Centre is significantly more cost effective as it removes much of the inherent complexity, compared with interfacing to disparate voice and data infrastructures. > All investments in contact centres are about two groups of people customers and agents and companies are interested in investments that will help them to retain these people.

36 discussions for IP Communications [1] [2] [3] [4] [5] [6] [36/54] Creating a detailed and comprehensive return on investment () analysis with a customer is a hugely complex, labour-intensive and time-consuming exercise. However, it is usually worth investing the time to create a tailored analysis for high-value customers and managed service providers will find creating a small team with a range of different skills the most appropriate method to achieve this. With many customers, it will not be necessary to generate a detailed, tailored analysis. In these cases, it will be possible to make a business case using case studies and highlighting proven benefits. However, managed service providers can use some of the methodology behind modelling as a sales tool to help provide a framework for their discussions with a prospect. What is involved in a analysis? Typically, it is an attempt to determine the impact of a decision based on a customer s business, business environment and organisational structure. The recommended process is (in the following order): > What two solutions scenarios are being compared? (e.g. IP telephony versus TDM-based PBX in an enterprise environment) > What are all the potential benefits of the two solutions? > Which benefits are acceptable to the customer (i.e. they will be able to qualify the benefits)? > Which benefits are applicable to the customer s business environment (i.e. they will be able to quantify the benefits)? Managed service providers should use these four questions as the basis of a series of discussions, or working sessions, with their customers. Once those discussions have resulted in an agreed shortlist of benefits, it is possible to start doing calculations that will quantify the benefits. Using Cisco s model it is helpful to categorise business benefits according to three criteria: Red hard cash savings/revenue enhancements Amber productivity or time savings that may be converted to a cash equivalent Green real benefits that are difficult to quantify. Some customers will only be interested in hard cash savings; others will find acceptable and applicable benefits in two or three categories.

37 discussions for IP Communications [1] [2] [3] [4] [5] [6] [37/54] : focus on IP telephony Cisco has identified the key customer benefits of IP telephony according to the Red, Amber and Green categories in its model. These are: Red Benefits Single network: > Reduced cost of infrastructure, administration, maintenance, management, upgrades > Reduction in voice trunks > Reduced cabling > Increased network resilience > Near-zero cost of moves, adds and changes > IP phone can behave as a PC substitute Reduced call costs: > Reduced PSTN costs via IP toll bypass > Reduced PSTN costs for home/remote workers > Reduced PSTN costs via Web-based audio/video conferencing > Reduced voice mail access costs via Unified messaging > Reduced PSTN costs via Personal Assistant > Reduced mobile roaming costs via extension portability and Softphone Improved real estate utilisation: > Reduction of elimination of swing space > Other reductions in facilities and property CapEx > Increased desk-sharing ratios Amber Benefits > Increased employee productivity: > End users via converged applications such as: IP Contact Centre Voice recording Unified messaging Personal Assistant CTI applications: screen dial, screen pop, etc. Web-based audio/video conferencing > IT operations staff/network management > Facilities management staff The above listed Red, Amber and Green benefits are generic, in the sense that they were developed for enterprise customers whether the intended solution is being sold by Cisco, by a managed service provider, or by another channel partner. Secondly, the benefits were not developed specifically with a managed service in mind. For these reasons, managed service providers will need to ensure that they have considered every angle of each benefit, so that they can Green Benefits > Increased customer satisfaction > Increased employee retention > Increased mobility (extension portability) > Increased mobility (wireless extensions) > Increased geographic flexibility > Improved competitive positioning > Faster application deployment > Increased resilience create a positive context for discussions with their customers. When using this model, managed service providers should also remember that benefit analysis of any kind is subjective. It depends on the views and objectives of the business leaders in the customer s environment. The list above is not intended to be complete; sales people who keep an open mind may discover new benefits by talking with and listening to their customers.

38 discussions for IP Communications [1] [2] [3] [4] [5] [6] [38/54] Benefits analysis Research among Cisco customers who have created a model for IP telephony has shown that the four most important areas for yielding return on investment are: > single, converged network > reduced call costs > increased productivity > real-estate and building utilisation. This section of the toolkit looks at these four areas in a little more detail, to show how managed service providers can use them as a basis for discussions with their customers. Single network: all Cisco s customers have recognised the benefits of a single network as the starting point for all other benefits. Among the key cost reductions arising from a single network that Cisco customers have determined using its model are: > Moves, adds and changes (MACs) cost reductions between 60 and 90 per cent of the total, according to whether costs are seen as an average of all MACs, whether they are soft (administration) or hard (repatching/cabling) changes. > Maintenance staff reductions of 30 to 50 per cent, with staff being redeployed or retrained and contractors no longer being needed. > PSTN line rental 30 per cent reduction in the number of PSTN/ISDN lines to branches or retail outlets and elimination of private circuits that are only used for voice. Reduced call costs: this is another area where IP telephony customers typically see some of the largest savings. In discussions with customers, managed service providers can talk about two types of savings: inter-office calls and calls to mobile phones. > Internal office calls. Typical savings from using toll bypass are 100 per cent on internal calls, 15 per cent on external calls, and 10 per cent on international calls. > Calls to mobile phones. These can be reduced in two ways, depending on the customer s organisational structure and staff mobility patterns. Firstly, employees hot-desking in the same building or moving between different buildings can now log into their telephone extensions, so colleagues can reach them on the landline (internal call no cost) instead of their mobiles. Secondly, home workers and travelling staff can now use Cisco Softphone on their PCs in order to make outgoing calls and to take incoming calls. Some Cisco customers have seen savings of over 30 per cent due to these capabilities. Increased productivity: 50 per cent of customers who created models identified productivity benefits ranging from better utilisation of audio conferencing to using unified messaging. This covered both employees time saved and employees being able to get more done. In addition to these specific IP telephony benefits, it is possible to broaden the scope of the discussion into the productivity gains that customers can expect to see from their overall convergence strategy. For example, convergence makes it possible for a retail bank to provide its branches with access to CRM applications. Real-estate and building utilisation: 20 per cent of Cisco customers who used the model recognised benefits from improved real-estate utilisation equating to an average annual saving of 22 per cent. These benefits will only be available to certain customers for example, companies who can sub-let any unused office floor space or are able to renegotiate their lease, who own their office building and can sell it, are entering a new building or simply need the space for expansion. Managed service providers will need to discuss with their customers whether or not they are in a position to benefit from improved real-estate utilisation.

39 discussions for IP Communications [1] [2] [3] [4] [5] [6] [39/54] When developing a model for an IP Contact Centre, managed service providers should bear in mind the inherent complexity of the contact centre environment; this makes any benefits analysis equally complex. This is mainly because the model has to take into account dimensions such as stand-alone versus virtualised, CTI enabled versus no CTI, TDM versus IP, multi-channel (i.e. integrated queue) versus disparate channels, and hosted versus DIY. What this means is that some benefits are going to be more relevant than others to a customer. For example, when comparing stand-alone versus virtualised, key benefits are likely to be increased agent utilisation, built-in disaster recovery, reduced call costs (because calls are answered first time, every time), centralised call reporting (leading to reduced managed costs and potentially better agent utilisation), and lower facilities costs. This type of focus will also allow the provider to open a discussion on how customers could virtualise their TDM contact centre environments using Cisco ICN. Managed service providers will be able to identify the most relevant key benefits from discussions with their customers. To help with this process, Cisco has identified a super set of the key customer benefits of IP Contact Centre using the Red, Amber and Green categories in its model. Red Benefits Real estate and building infrastructure: > Space utilisation (central call processing, no on-site ACD at regional offices) > Reduced operational costs, reduced facilities management costs > Single IP network for data, contact centre and back-office IP telephony Desktop cost savings: > Common Ethernet wiring and wall ports to the desk for PCs, agent phones and back-office phones > PC Softphone can avoid the need for phone hardware Business continuity: > Distributed network architecture inherent redundancy > Immediate agent relocation if site down (site-independent routing) > No costly standby call centre building and ACD to maintain Amber Benefits Workforce reachability: > Agents in regional offices > Larger employee pool > Use of back-office staff > Home workers Workforce efficiency: > Multi-channel queue > Sharing staff across multiple virtual contact centres > Ease of Computer Telephony Integration > Worker mobility: site-independent agent log-in > Back-office staff increase specialist skill sets > Reduced employee churn Business efficiency: > Virtualisation of existing call centre with ICM pre-routing > Faster campaign set-up due to greater flexibility Green Benefits > Customer satisfaction > Geographic flexibility > Competitive positioning > Faster application deployment > Difficult-to-quantify productivity via converged applications > New markets addressable via new contact channels Red benefits continued over...

40 discussions for IP Communications [1] [2] [3] [4] [5] [6] [40/54] Red Benefits (continued) Reduced call costs: > Media treatment via IP, queuing at originating edge of PSTN > Forwarded or transferred calls remain on IP network > Increased Web or contact can reduce call volumes Network infrastructure: > A single contact centre infrastructure for multiple sites > Elimination of per-site voice trunks and inter-site leased lines > Distributed IVR reduces network bandwidth requirements > Efficient management/network operations due to single infrastructure Additional hosted solution benefits: > Pay per use model can be offered by the service provider > No hidden operations and maintenance costs > Network reachability using cost-effective shared infrastructure > High reliability due to proven network architecture and operations > Single provider for multiple services such as data VPN, IP telephony, security, secure server hosting, PSTN access > Service provider can offer Web-based reports to help access and tune service usage When discussing these benefits with prospects, bear in mind the breakdown of costs (according to Merchants Limited, 2003) within a typical contact centre is: > telecommunications costs 14 per cent > technology costs 16 per cent > labour costs 63 per cent. Productivity gains. With labour costs approaching two thirds of the total, productivity gains and workforce efficiency are the most important topic in any discussion about IPCC. As the above cost ratios show, contact centre equipment (both hardware and software) is a highly leveraged investment. So that if a more expensive product offers only the slightest productivity increase over a cheaper one it is easily justifiable given the labour savings it will achieve. Managed service providers must explore these sorts of productivity gains with their customers, for example, intelligent pre-routing and multi-channel queuing within the context of the customer s organisation. Other workforce efficiency gains come from: > multi-channel queuing if the same agent can handle real-time and non real-time contact it makes more efficient use of their time > sharing staff across multiple virtual contact centres makes more effective use of their time and skills > CTI provides more about the customer so that agents are better prepared for each contact > new locations can be brought online very rapidly, with new or existing staff, and agents moved quickly between locations without impacting their role.

41 discussions for IP Communications [1] [2] [3] [4] [5] [6] [41/54] Reduced call costs. There are many different aspects of call cost reductions. For example, a TDM-based call centre environment with multiple sites also requires multiple ACDs; this large expense is saved with a hosted IP-based solution. At busy periods, when a TDM-based site needs to overflow into another contact centre, the company often incurs cost from its tie lines (TDM trunks) or from routing the calls over the PSTN. On an IP network these calls are free of charge. Other reductions come from: > Call treatment at the edge of the PSTN, meaning bandwidth is not consumed until the caller is connected to the agent. > Increased Web and contact may reduce call volumes. At the same time as reducing agent numbers (saving more money), it can increase customers satisfaction because they avoid telephone queuing. Reducing staff churn. Contact centres have an average staff turnover rate of 25 per cent, so it is a high priority for them to reduce or deal with employee churn. Managed service providers should discuss with prospects that, by enabling smaller and more distributed contact centres, Cisco IPCC gives companies access to a much larger pool of employees from which to recruit. This, in turn, helps to reduce staff turnover, further helped by the fact that it is more convenient for employees when they can work closer to their homes. Real estate and building infrastructure. An IP Contact Centre requires less space than a TDM ACD due to the centralised application and absence of specialised equipment. A single IP network reduces operational costs such as cabling and facilities management, and makes desk moves very easy as agents simply log in to the IP phone or Softphone at their new desk.

42 [1] [2] [42/54] The following highlights some of the key areas that managed service providers need to address when selling IP Communications. Focus primarily on the business case, not the IT case Historically, analysis focuses on IT benefits and cost savings which are often inter-related. However, the major benefits that companies will experience as a result of deploying IP Communications affect the business as a whole rather than the IT department specifically. For example, a reduction in employee travel costs due to the introduction of IP-enabled audio and video conferencing will be more influential in helping to sell the solution than savings on network maintenance. By focusing on the business case, managed service providers will equip themselves with a much broader base of arguments that are likely to appeal to senior executives throughout an organisation. For example, in the scenario given above, the reduction in employee travel costs will not be the only benefit to arise from IP-enabled audio and video conferencing. Increased productivity from new ways of working and easy-to-use applications will also be a factor. Clearly, there is also a strong IT case for IP Communications. However, managed service providers should remember that, in addition to reducing IT costs in the medium to long term, companies may initially have to make other investments in order to deploy an IP Communications solution. In particular, many companies may have to upgrade their LAN infrastructure to support Quality of Service for converged applications. This will have a negative impact on the. Help customers to show greater returns on smaller budgets Unlike PBX manufacturers or IP Communications vendors, managed service providers are much more likely to gain the opportunity to cost out a complete managed or hosted service for a potential customer. When costing out a complete service, managed service providers can demonstrate that they are much more than a supplier of telecommunications services but also able to take considerable costs out of the customer s organisation. For example, it is often possible to show customers substantial cost savings, compared with their current situation, through the provision of an end-to-end hosted service. All the other business benefits will then follow. Legacy infrastructure barriers As discussed earlier, a key barrier in many organisations is likely to be the need to upgrade or replace the existing LAN infrastructure. However, bear in mind this type of legacy LAN environment is almost certainly going to need upgrading or replacing in the relatively near future anyway. Most organisations will accept the logic of this, even if they do not particularly enjoy being prompted to address their LAN issues at this time. Leasing may also be a useful tool in this scenario, as it makes the cost of LAN upgrades or replacements more affordable. Another potential barrier is a TDM PBX vendor who attempts to sell the customer a hybrid solution, i.e. IP functionality that runs off the existing PBX. At first glance, this can seem an attractive solution to customers as it allows them to put off a difficult decision while at the time getting more mileage out of their existing PBXs. This argument is easy to counter by reminding customers that there is nothing to be gained from trying to artificially extend the lifecycle of a technology model that is now effectively obsolete. A leasing solution may also help here, as it may be possible to arrange for Cisco Capital to buy the legacy PBX, thereby enabling the customer to avoid an accounting loss associated with scrapping its PBX.

43 [1] [2] [43/54] Key lessons > Understand the benefits of IP Communications over traditional PBXs and call centre solutions ( more than just telephony ). > Keep an open mind: one customer s killer application may not be another s, so listen to customers in order to understand each company s business needs and how they align with the IP Communications offer. > Use applications such as Cisco IP Contact Centre and Cisco Unity as Trojan horses offer them as stand-alone applications, so that customers can see the benefits of IP telephony before they deploy it, and then use this as the basis for a much broader implementation. > Engage with the customer strategically no lower than the CIO or the Head of ICT, but deal tactically with the customer s technical community during the sales process to familiarise them with the new technology before it is deployed workshops and seminars are very effective. > Make sure that the business case is strong and specific to that customer even though cost reductions alone will probably not close a sale, customers will still be looking for hard savings and a rapid return on investment of 18 to 24 months.

44 How to handle a range of target sectors [1] [2] [3] [4] [44/54] Key markets for IP Communications Cisco has identified certain sectors of the enterprise market that are particularly important targets for managed and hosted IP Communications: > financial services (retail banking, investment banking, insurance) > retail > public sector, with a particular focus on local government > travel. Mapping IP Communications to key enterprise vertical sectors Large and widely distributed organisations Nearly all of the four key vertical sectors for IP Communications have a similar organisational structure. They employ large numbers of people usually throughout a country, a region or a city and they have multiple sites. The only notable exception is the investment banking segment which tend to be located exclusively in metropolitan areas i.e. capital cities and financial centres where they may have one or more very large sites, but no national network of offices. This topology means that companies will reduce their infrastructure and telephony costs as they migrate to IP telephony by providing services to remote offices or small branches from a centralised location either their corporate headquarters or a managed service provider s data centre. Only IP phones will be required on-site in order to benefit from advanced telephony services and a range of other applications made possible by IP Communications. Routing inter-site calls of an IP VPN means companies do not have to pay PSTN charges for calls between their sites. Other cost savings include reductions in the cost of moves, adds and changes and centralised management and maintenance. Although cost reductions are important, one of the key benefits of IP telephony for these sectors is that it gives them the ability to offer employees in small and remote sites capabilities such as voice mail for the first time. For example, branch managers in retail banks will be able to access all the functionality enjoyed by their colleagues at headquarters. In summary, IP telephony benefits large, distributed organisations because: > it saves money on the communications infrastructure > intra-company calls are often free of charge > it allows them to offer smaller sites the same functionality as larger sites.

45 How to handle a range of target sectors [1] [2] [3] [4] [45/54] A mobile workforce The majority of companies in the target vertical sectors for IP Communications have a mobile workforce. This typically means that employees either: > travel frequently between different offices > work in locations without the use of a permanent desk and/or PC. Examples include: > Retail banking Specialists (e.g. mortgage advisers) who move from branch to branch. Branch employees who move to different locations within the branch (e.g. an open-plan discussion area or a private office) during a working day. > Investment banking Employees who travel frequently between different international offices. > Retail Employees such as regional managers and buyers who travel between stores. Store employees who spend most of their time on the shop floor. > Public sector local government Employees such as social workers whose work is cross-departmental and who therefore move frequently between different locations. > Public sector healthcare Specialist workers such as consultants who may run clinics or teach in different hospitals within a region. Workers such as nurses who have limited access to PCs or other corporate communications systems. > Travel airlines Senior managers who travel frequently between different international offices. Large numbers of employees pilots, cabin crews, ground staff with limited access to PCs or other corporate communications systems. IP Communications allows mobile employees to access their own extension number and services such as voice mail wherever they are working within the corporate infrastructure. It also allows employees who are not desk-based to move around within a location whether that is a branch, a retail store, an office building, a hospital, or an airport terminal and still have access to telephony services and corporate through IP phones. Retail banking (financial services) the layout of branch offices is changing and employees will increasingly meet their customers face-to-face within the branch, instead of being divided by a counter and screen. IP telephony allows an employee to work in a number of different locations within the branch without missing incoming calls or losing access to services such as voice mail. Retail employees on the shop floor can use IP phones for a range of tasks: > checking stock items and placing orders for customers without leaving the shop floor > clocking in and out at each end of their working day > automating routine administration such as holiday requests > browsing corporate or training materials during quiet times. Public sector mobile workers such as nurses can use IP phones to: > clock in and out of their shifts, making it easier for administrators to calculate salaries and reducing the time skilled employees spend on manual paperwork > access corporate directories and other Human Resources data online, keeping them better informed and saving time > access patient records or other clinical online, for example while on the wards, to verify a fact or obtain additional data that is important to patient care.

46 How to handle a range of target sectors [1] [2] [3] [4] [46/54] Travel IP Communications can be used in the air and rail travel sectors in a variety of ways: > IP telephony can be integrated with commonly used airline passenger processing systems to allow a single log-in for both data and voice services > IP telephony can provide integration between existing PBX systems to enable custom telephone services for each airport tenant (i.e. each individual company providing services at an airport) > as a critical component of a converged network, for example for a railway station, IP Communications might enable access to integrated passenger management, fare collection, security, facility management and e-learning. Improving customer service All the target vertical sectors for IP Communications have a significant customer service function that will be enhanced by Cisco IP Contact Centre. Cisco IPCC offers these sectors several benefits: > It provides the wide range of customer contact channels, including the Web, which they require. In the public sector, this requirement is often driven by the government, the European Community, or even a municipal authority. In the financial services, retail and travel sectors, it is driven by customer demand and fierce competition. > By creating a virtual contact centre, it allows companies to leverage their internal resources in new and valuable ways. For example, in retail banking, agents can now transfer a call to the customer s account holding branch if necessary, in order to resolve a problem more quickly. > The ability to capture from customers interactions with the contact centre can also be valuable. In retail, for example, analysis of this can help companies to identify opportunities for new products or promotions. > It provides essential links to back-office systems such as CRM applications so that agents can be better informed when they engage with a customer through any medium. > The powerful CTI function within Cisco IPCC and its tight integration with Cisco CallManager mean that relevant customer data can be transferred to anyone on the company s network inside or outside the contact centre itself along with the contact.

47 How to handle a range of target sectors [1] [2] [3] [4] [47/54] Killer applications IP Communications offers rich functionality to its users beyond telephony services. While it is impossible to predict which of these applications will be most important to each individual customer, some offer particularly clear benefits to specific sectors. For example: Audio and video conferencing > Retail banking (financial services): creating links between knowledge workers such as mortgage specialists, who might be at a regional office or headquarters, and customers at their local branch. > Social services (public sector/local government): setting up links between remote representatives of different agencies, to review a particular family s case with their social worker or to meet with the family. Video telephony would make it much easier to schedule meetings between different agency representatives, thereby saving time and money, enhancing the service offered to citizens and possibly saving lives. Voice recording > Financial services: in this highly regulated sector, the ability for employees such as financial advisers or fund managers to record customers instructions at the desktop is helpful (a legal requirement in some cases) and can prove invaluable in the event of a dispute. > Retail: Cisco IP telephony gives employees with IP phones the ability to record a customer s order, for example, and forward this to colleagues who will be involved in fulfilling that order. When all the staff who will be involved in fulfilling an order can hear exactly what a customer has said, there is a much greater chance that the customer will get exactly what they want.

48 [1] [2] [3] [48/54] Although IP telephony is now seen as a mainstream rather than an emerging technology, it is nevertheless a disruptive one and one that many enterprises have not yet deployed. For this reason, enterprises may have some concerns about it. The following Q&A highlights some of the concerns that Cisco hears most often from potential customers, and the view that managed service providers should take. Q. Is there really a business case for IP telephony? A. There is unquestionably a business case for IP telephony, and transparent models such as the one used by Cisco can help companies to develop their own case in some detail. However, each case depends not only on short-term cost savings but also on the longer-term value of the solution to the customer s business. This is a more subtle area that can include gains such as productivity, customer service, and organisational agility. Finally, some customers are deterred from moving to IP telephony by the up-front investment required much of this can be avoided by outsourcing the service(s), as well as by using leasing as part of the overall proposition to the customer. Q. Cisco IP phones are too expensive. A. Firstly, Cisco manufactures a wide range of IP phones that are available in the low, mid and high-end price brackets with feature sets appropriate to their pricing. Secondly, it is important to consider the cost of the overall IP telephony solution, not individual components such as the phone, as this does not give a true picture. For example, IP phones connect directly to Ethernet without needing a PBX line card and chassis, so one switch port and one set of wiring can support both a PC and an IP phone. As a general rule, it is impossible to make direct comparisons between IP telephony and PBX environments because you are never comparing like with like. Q. Is IP telephony as mature and reliable as my PBX? A. Let s deal with the issue of maturity first. By 2007, Gartner expects traditional PBX manufacturers to have ceased development (although not necessarily production) of their TDM-based PBX and contact centre systems, and to have announced their intention to discontinue support for those systems within five years. IP-based technologies are already starting to establish their dominance in the market; by 2007, Gartner expects that 60 per cent of phones will be IP. The issue of reliability is more complex, as all TDM-based PBXs are wrongly assumed to offer five 9s. In fact, only the biggest PBXs can offer per cent reliability and they need total redundancy to achieve it, which is very expensive. Another common, and related, misconception is that data networks never achieve more than 99.5 per cent availability. In fact, Cisco has been building networks that achieve five 9s for years; as with any infrastructure, it is about achieving a balance between costs and levels of redundancy. The key to the reliability of Cisco IP Communications solutions is their distributed architecture: unlike traditional telephony, the load is spread across multiple distributed devices that back each other up, instead of depending solely on one single large PBX. Finally, Cisco has developed new features in its IOS networking software to ensure that a resilient IP telephony solution can be delivered to remote offices. Survivable Remote Site Telephony (SRST) is able to dynamically and without manual configuration back-up Cisco CallManager during outage periods caused by a loss of connectivity to a customer s site. Q. Why can t I migrate to IP telephony by simply attaching IP phones and trunks to my legacy PBX? A. This approach, also called a hybrid solution or IP-enabled PBX, really delivers very limited advantages. Customers are still left with a TDM platform that has all the same issues of limited scalability, poor integration and high maintenance costs. They will also need to make the decision to replace their PBX with IP at some stage in the future. A key benefit of making that decision now is that customers are investing in their future: they

49 [1] [2] [3] [49/54] will be able to start adding new applications, services and users on to the IP-based system very quickly and cost effectively. For customers who are concerned about the accounting implications of replacing their PBX, Cisco Capital may be able to buy the PBX at its book value, thereby eliminating any accounting write-offs. Q. Isn t IP telephony less secure than a PBX? A. Security touches all network components, so should be an integral part of any company s networking strategy whether voice is run on that network or not. Cisco is the world s largest provider of security solutions for networks, with a comprehensive range of products that offer end-to-end protection against all known vulnerabilities. Cisco is a market leader in encryption, VPN, firewall and access security. Its IP telephony security technologies include anti-virus and intrusion protection software on Cisco CallManager, in addition to the security that is embedded in all its voice and data networking components. In fact by embedding security in the network and encrypting voice calls, an IP telephony deployment can be made more secure than a PBX. Q. How do I migrate from legacy PBXs, voice mail solutions and ACDs to IP telephony? A. Cisco IP Communications solutions are able to work in parallel with TDM-based PBXs and ACDs, as they support all the protocols used throughout the EMEA region including DPNSS (in the UK), Q.SIG (European standard), and ISDN primary rate interface and basic rate interfaces (PRI and BRI). They also support the key interfaces between IP PBXs and the PSTN such as SS7, H.323, SIP and MGCP. Applications such as Cisco IP Contact Centre and Cisco Unity also offer completely transparent interoperation between PBX and IP telephony systems. So tight is the integration between Cisco IPCC and TDM-based systems that no changes are required to the architecture interoperability is primarily a scripting exercise. Q. Is voice quality not as good with IP telephony? A. This was a real concern in the early days of Voice over IP, but it relates only to the transmission of VoIP using the public Internet. The Internet does not support Quality of Service, so it delivers very poor speech quality. Cisco IP telephony solutions are run over networks in which QoS policies are applied to the traffic. Voice is given the highest priority, so the quality is as good as, if not better than, voice on a traditional PBX. It is important to bear in mind that QoS is an end-to-end concept: every single network device involved in a telephone call must support QoS features in order to achieve high-quality voice. Q. Why should I buy a voice solution from Cisco; aren t they data specialists? A. The statistics speak for themselves. In October 2003, MZA found that Cisco was number one in the IP telephony market in Western Europe and number seven in the total voice market above 100 lines. In August 2003, Gartner placed Cisco as a market leader in EMEA corporate enterprise telephony, based on its completeness of vision and ability to execute. Cisco IP Communications is deployed in mission-critical environments such as 2,600 IP phones in Landspitali Hospital in Iceland and Reality Group (retailer) which has a 3,000 agent contact centre based on Cisco IPCC. Other major enterprise deployments include Abbey (a major UK retail bank), Heinz, Lloyds of London and Roche.

50 [1] [2] [3] [50/54] Q. How do you ensure data integrity in a hosted contact centre system? A. IP Contact Centre allows applications and databases to be hosted in the managed service provider s secure data centre or located at the customer s site. This is also true of the ICM routing server. These options allow for a flexible model in which customers manage and secure their own CRM data and routing scripts. Following discussions with the managed service provider, the optimal model for each customer can be deployed to ensure the appropriate levels, server and data integrity and security. Q. I don t have distributed agents, so why do I need IP Contact Centre? A. IP Contact Centre allows companies to make more continuous use of agents time by combining multiple contact media such as and voice. IPCC enables cost-effective desk moves or workforce expansion because new agents can be seated wherever there is an Ethernet port. Cost savings can be made through IVR treatment and queuing of incoming calls at the edge of the IP network, allowing them to be handled as a local call even if the final agent destination is international. IPCC also reduces time-to-market on new services and campaigns through its support for standards-based IVR applications, integration of Advanced Speech Recognition, and CTI applications that integrate CRM and other data sources. SALES CUE: It is worth bearing in mind that the market has moved on since VoIP first became available in the mid to late 1990s. The majority of enterprises now acknowledge that they will move to a converged, IP-based environment within the next few years. In addition, they have seen evidence of IP telephony being used successfully in mission-critical environments so have fewer concerns about issues such as reliability or speech quality. As a result, account managers may begin to see a change in the objections that are raised by enterprises. Specifically they may find that companies are increasingly more interested in the value that IP telephony and IP Communications can add to their business. In this regard, the Cisco portfolio brings many advantages over its competitors, as this toolkit has shown. Account managers will, therefore, find themselves talking about issues such as simplifying the customer s world and reducing opportunity times for a business. Much of that value is added by offering a hosted or managed IP Communications service. For some customers, outsourcing telephony services will seem like a radical idea and account managers may encounter objections. This toolkit explains the key benefits of hosted and managed IP Communications in its section on Managed service versus DIY.

51 [1] [2] [51/54] IP telephony Abbey Financial Services Sector Abbey, the UK s largest bank focused entirely on personal customers, has adopted a programme of corporate change and growth, with technology as one of the cornerstones of the strategy. Bill Gibbons, Director of Technology Services and Support and Gary Wass, Head of Comms Architecture and Planning, undertook a complete strategic review of the way communications networks were sourced, developed and managed across the enterprise. "The branch office scenario was typical of the kind of issues we were confronting," explains Bill Gibbons. "The branch office was based on a managed frame relay service, with ISDN for back-up, ADSL for Internet access and traditional key and lamp type analogue networks for telephony. Clearly, there was considerable scope for consolidation and simplification." The Abbey team set out to move to a converged network, capable of delivering the demanding services required to support the bank s strategic goals. "We were convinced that Voice over IP (VoIP) would deliver major cost savings," explains Gary Wass. "The new infrastructure carries around 750,000 internal phone calls each month, which would previously have routed across the public telephone network. It s easy to see the scale of the cost reductions that we can achieve in this area alone." "The new infrastructure will deliver tens of millions of pounds in cost savings," says Bill Gibbons. "To be competitive and achieve our corporate objectives, we have to be able to react swiftly to opportunities and lead the change wherever possible. The solution delivered by Cisco and BT gives us the power, the capacity and the flexibility we need to meet those challenges, now and in the long-term." Sports Soccer: Retail Sector Sports clothing retailer Sports Soccer has carved out a reputation for delivering quality goods at prices its competitors struggle to match. The company s aggressive business strategy has led to rapid expansion with over 130 stores throughout the UK, Belgium and Luxembourg. In its drive to stay ahead Sports Soccer became one of the first retailers in the UK to take advantage of the benefits of IP telephony. The company is now saving on call costs and raising store productivity by running voice, data and CCTV applications over the same IP-based network using Cisco s IP communications architecture. Sports Soccer s IT Director John Ashley says the company needed to increase in-store profitability and ensure that the corporate network was flexible enough to support new competition-beating applications. Crucial telephony requirements were to replace a non-y2k compliant PABX, to introduce remote call management capabilities and to address spiralling phone bills which exceeded 250,000 annually. With every shop requiring lines for each credit card machine, communications, fax machines and burglar alarms, around 55 per cent of the bill came from phone rental costs alone. Surrey County Council Public Sector/Local Government Surrey County Council employs over 24,000 staff and provides a number of services including social services, education, planning and transport to over one million citizens. Surrey needed to increase flexibility for staff and help them achieve their government targets of providing all their services online by The only way it could achieve its objectives was to rationalise the voice and data provision to a single network. As cash and resources were tight, Surrey opted for a fully managed service to reduce initial investment. In 2000, Surrey decided that it would replace both the telephone and computer networks across the county, to enable more flexible working arrangements for staff. They would be able to work more effectively and be easier to contact in different locations, including their own homes, through the use of roaming profiles for computers

52 [1] [2] [52/54] and virtual telephone numbers. In the past four years, selected council staff have been benefiting from flexible working practices such as hot-desking. The council chose partner Cable & Wireless from a shortlist of three companies. A key factor in the decision was that Cable & Wireless offered a fully managed service using the Cisco IP Communications integrated voice and data networking architecture. Cable & Wireless will integrate the council s voice and data networks into a single network and all calls sent over that network will be internal and, therefore, free. Surrey has estimated that it will make significant savings the lower external telephone call charges alone are expected to save the council 50,000 a year. Efficiency savings can then be re-directed to front-line services such as schools and social care. IP Contact Centre Deutsche Bahn Travel Sector Deutsche Bahn (DB) is the German state railway. It committed to invest some $35.6 billion (over 29 billion) in infrastructure and rolling stock between 2000 and But the company also needed to find ways of transforming its people and processes to match external changes and to achieve industry-leading levels of productivity, efficiency, and customer service. It turned its attention to the possibilities offered by Web technology. In just a few months, a world-leading business travel management system was implemented. Christened dagama, it is the first fruit of the partnership with Cisco. It incorporates an IP Contact Centre replacing several call centres and other administrative facilities distributed around Germany. A built-in CRM customer database is providing advanced features and functionality to help DB better serve its internal and external customers. The second dagama phase went live on 1st January 2002 with the implementation of Web-based modules covering online travel agent, online travel management, and online hotel booking. Web collaboration is an intrinsic part of the system, allowing direct connection to the call centre and remote onscreen guidance by operators to resolve problems. The dagama system is showing a projected of 500 per cent from expected annual savings of $20 million (over 16 million) in four key areas: bulk discounts, administration, transaction charges and more productive use of time.

53 Where to get further [53/54] Additional Cisco Powered Network resources, such as the IP VPN and Managed Security sales toolkits, can be downloaded from the member resources site, click here. NOTE: CCO ID and Member Resources registration required. Please click here for further. For additional on Cisco s IP Communications products and solutions for enterprise, click here. For on Cisco s service provider strategy, products and managed service solutions, click here. For on the Cisco Business Voice Solution for service providers, click here. For on Cisco Advanced Services click here For an IP telephony readiness assessment click here (CCO ID required) For on Cisco leasing options please contact your Cisco account manager.

54 Why sell IP? Where to get further [54/54] Glossary of terms ACD Automatic call distributor IPCC IP Contact Centre PBX Private branch exchange CapEx Capital expenditure CEO CFO CIO COO CPE CRM CTI ICT IPC Chief executive officer Chief financial officer Chief officer Chief operating officer Customer premises equipment Customer relationship management Computer telephony integration Information and communications technology IP Communications Cisco IP Communications refers to the growing range of converged Cisco network-based solutions that are designed to integrate data and video capabilities and IP telephony, thereby creating new ways of working and allowing companies to become more agile, flexible and efficient. IPSec IPT ISDN IVR LAN IP Security protocols for secure exchange of packets at the IP layer IP telephony the technology that allows voice communications to be transported over an IP-based data network instead of a dedicated, switched telephone network. With IP telephony, voice can share the same network infrastructure as data and video traffic, employing QoS and other techniques to ensure high-quality communications. Note: IP telephony is not the transmission of voice over the public Internet. Integrated services digital network Interactive voice response Local area network MACs Moves, adds and changes MPLS Multi protocol label switching OpEx Operational expenditure PSTN Public switched telephone network QoS SLA SMB TDM VoIP VPN WAN XML Quality of Service Return on investment Service level agreement Small and medium-sized business Time division multiplexing Voice over IP a way of carrying voice communications over an IP network that digitises the voice streams and turns them into packets of that are similar to data packets. IP telephony builds on VoIP standards to enable higher-level functionality such as contact centres and voice mail. Note: VoIP can be the transmission of voice over the public Internet. Virtual private network Wide area network Extensible mark-up language