convergys corporation (nyse:cvg), a member of the s&p 500 and

CONVERGED NETWORKS

What It Means For Contact Centers

August 2001

C O N V E R G E D N E T W O R K S W h a t I t M e a n s f o r C o n t a c t C e n t e r s

© 2001 C O N V E R G Y S C O R P O R A T I O N 1 w w w . c o n v e r g y s . c o m

A B S T R A C T

Since the deployment of the first computer terminals into companies, enterprises have invested, builtand managed two separate networks. The first was the traditional analog voice network that startedwith Alexander Graham Bell. The second was the data processing network. This latter network usuallyhandled accounting, financial or keypunched customer order entry and inventory information.Overlapping investments were made to support these infrastructures, but, since the networks had twoindependent business needs, this situation did not present a real business problem.

Since the mid-1990s, however, customer and internal employee communication has moved to newerelectronic forms such as e-mail, web-based e-commerce, chat-room, voice over Internet Protocol (VoIP)and video. In some cases, enterprises now have much more communication, both internal andexternal, using these new forms of electronic commerce than they did with older, traditional voice.

The challenge facing enterprises today is bringing voice and data networks together in order to (1)effectively use technology to deliver superior customer service in a multi-channel sales and serviceinquiry environment and (2) cost-effectively manage these multi-channel network communicationstructures. The dollars invested to support concurrent infrastructures are significant and the impact oncustomer care programs is important to business moving forward. Bringing voice and data networkstogether into one converged network has a significant effect on system building and system andretirement planning of telephone and cable infrastructure builders, especially those with e-businessinitiatives and customer contact centers.

This paper discusses the benefits and challenges of merging data and voice networks and the impact ofan interactive, multichannel customer contact solution. It also addresses how Convergys hasapproached these challenges for its internal needs, as well as deployment for client call center needs.

K E Y C O N T R I B U T O R S

Tom Antunes, Vice President, Industry SolutionsDan Dineen, Vice President, Network ServicesBill Rieke, Director, Industry SolutionsBill Botsford, Product Manager, Integrated Contact Center



T A B L E O F C O N T E N T S

Abstract ....................................................................................................... 1Key Contributors ....................................................................................... 1Table of Contents ...................................................................................... 2Introduction ............................................................................................... 3Convergence At Two Levels ................................................................... 3Trends in Customer Contact................................................................... 4‘Web-Enabled’ vs. Voice and Data Convergence .............................. 5Contact Center Components ................................................................. 6Contact Center Service Portfolio........................................................... 9The Converged Network ....................................................................... 11Desktop Options ..................................................................................... 13Benefits...................................................................................................... 14Challenges to Convergence ................................................................. 16Role of Standards .................................................................................... 20Regulatory Environment....................................................................... 23Migration Strategies .............................................................................. 23How Convergys Addresses Converged Networks ............................... 25 An Interview with Dan Dineen, Vice President Network Services, Convergys Corp.

Conclusion and Contact Information................................................. 30



I N T R O D U C T I O N

Organizations are beginning to evaluate their options in merging their voice and data networks,determining what efficiencies can be realized, and what enhanced services can be provided. Themajority of these efforts has centered on Internet protocol-based (IP) communication systems as thishas become the standard. The following discussion provides an overview of the benefits of networkconvergence and looks at many of the issues, such as standards and the regulatory environment, stillunder development. The perspective of this discussion is the enterprise that currently relies onseparate voice and data networks for internal and customer interactions such as sales, billing, inboundand outbound calling, customer relationship management and reporting.

This investigation is particularly relevant for organizations that rely on their data and voice networks toprovide world-class customer and employee care. These companies already have significantinvestments in voice and data networks and are beginning to see the benefits of integrating web-basedcontact to maximize each customer contact. Keeping current customers and attracting new ones awayfrom competitors is paramount in today’s competitive environment. Bringing together voice and datanetworks into a converged media-rich network within the enterprise will be a significant step towardmaking the most of every customer contact.

The prospect of converging data networks with voice networks into a single IP network has ignited theimagination of the carriers, system developers, integrators and even the home PC user. According toComputer Telephony magazine, more than 800 vendors are working to provide the technology,hardware and software that will bring about the transformation of traditional circuit-switched networksinto packet-switched networks. The possibilities (and claims made by many of the vendors) seemlimitless. Although some of the claims seem to be made to get attention, such as free long distancephone calls, the true potential is much greater and worthy of further investigation.

The technology to merge voice and data networks is in various stages of readiness for carrier-classservice. In spite of that, certain types of organizations can benefit from being "early adopters,"including organizations that provide customer and employee care. Carriers will also benefit fromemerging technologies as discussed below. However, our purpose here is to examine the significanceof merged networks from the enterprise perspective.

C O N V E R G E N C E A T T W O L E V E L S

Network convergence is proceeding at two levels within the enterprise.

• Virtual: In many cases, existing sales and service inquiries, which can be either voice, data, orboth, can be combined through multichannel contact center gateways. These gateways allowthe marriage of legacy voice systems and IP access technology without the need to migrate allcomponents in the contact center data network into one physically combined network. Thisvirtual converged network supports most of the business needs, at least on a short-to-medium-term basis. This approach faces longer-term limitations with respect to capacity and ongoingoperational costs.

• Physical: This is the true, single set of network infrastructures for both voice and data.



Companies are looking at network convergence to maximize their investments in informationtechnology while providing world-class, seamless and integrated services internally, as well as to theircustomers. Organizations are continuously looking for solutions that will help them maintain theircompetitive edge. Companies are becoming more focused on and organized around customers andless on products. The difference between success and failure in today’s marketplaces will becomedependent upon how effectively and consistently companies share customer relationship intelligenceinternally.

Efforts to merge data and voice networks at both levels, virtual and physical, are occurring in parallel.Organizations can realize the benefits of merging data and voice networks even before allinfrastructure elements are in place. Enterprises could begin by assessing their portfolio of all thecustomer service channels and technologies, and prioritizing areas for evolution to new, IP-enabledservice paradigms.

Meanwhile, carriers (including phone companies, long distance carriers, wireless providers, cablecompanies, ISPs and startup ITSPs (internet telephony service providers)) are realizing that there is amarket to provide converged services to enterprises. By offering these services, they can also makemore efficient use of their networks. By adding more value-added features, they can be assured ofattracting more subscribers and generating incremental revenue. Carriers also realize that in today’saggressive marketplace, there is a struggle (via advancements in technology, mergers and acquisitions,and efforts to obtain favorable regulation) going on to be the provider of choice for telephone,television, broadband Internet access and wireless communication. Carriers who can bundle the rightproducts and bring them to market efficiently will likely be the long-term winners. Carriers are alreadycarrying some of their long-haul voice traffic over IP networks. This trend will undoubtedly continue.

Later sections of this discussion describe the structure of a completely integrated enterprise-levelsystem and the benefits it provides. Also described are the challenges facing building such a system, aswell as strategies for migrating toward a fully IP-based network. Offerings from some of the majornetworking and PBX vendors are examined. Finally, some conclusions are drawn based on thisdiscussion.

T R E N D S I N C U S T O M E R C O N T A C T

Aside from network efficiencies (discussed later), the primary benefit to the enterprise of a convergednetwork is the bringing together of customer contact methods and procedures via multichannelcontact center integration with powerful customer relationship management (CRM) solutions.Bringing these together in an overall e-business strategy means that no matter how customers, vendorsand suppliers choose to communicate with the enterprise, the enterprise can accept and respondregardless of the form that communication takes.

Customers want to be able to interact with companies when, where and how technology allows them todo so. Multiple early majority technology adopters, such as financial institutions, high technologymanufacturers and communication providers are moving toward providing general information as wellas customer account information through their telephony and web servers. Further, they similarlywant to enable elaborate transaction processing via these same servers. The need to provide the meansfor customers to contact the enterprise directly and immediately is another ultimate goal. As morecustomers look to the Internet for information and ways to transact with the enterprise; enterprises



must be ready to provide self-help on their websites. Enterprises must also provide the means forthe customer to contact the company from that website.

According to Forrester Research (Figure 1), agrowing proportion of customer-initiated contactwill come in the form of e-mail and web-based calls(text chat, call-through1, and call back2).

Contact Channel EvolutionThe trend toward ‘online’ communication is especially true for the type of consumer that high-techcompanies want to attract. These consumers have the income and inclination to buy high-tech gear such as cell phones, satellite TV and broadband Internet access. They are morelikely to make purchases and conduct business over the Internet. This group is also likely to accessfinancial accounts and use the web to communicate with the companies with whom they do business.Keeping this profitable group of customers happy should be a goal of the enterprise.

‘ W E B - E N A B L E D ’ V S . V O I C E A N D D A T A C O N V E R G E N C E

Many enterprises have already ‘web-enabled’ their communication capabilities, especially those withweb-based business models and initiatives. Web-enabling means that the enterprise has added thecapability to interact with customers, suppliers and partners via the web by building on currentinvestments in voice-centric call centers, while addressing the requirements of e-commerce. It mightbe helpful to consider these new services in the context of the evolution of customer care (Figure 2).

For example, in traditional "call centers,"separate groups of agents occupy seatsdedicated to answering incomingtelephone calls, while other agentsreceive and answer e-mail or requestsfrom the web site. This architecture islimited in that only incoming PSTNtelephone calls interface with currentvoice networks and any customerrelationship management (CRM)capabilities. Separate switching platformsand desktop systems are required tohandle other channels ofcommunication. No value is added interms of routing all calls (independent ofchannel) based on agent qualifications

1 Call-through is an Internet VoIP call initiated when the customer clicks on a button on the web site. Thecustomer uses his or her multimedia PC to speak with a live customer care agent.2 Web site visitors can request that a customer care agent call them back at a number they enter in a field on thesite.

Figure 1: Customer contact trends

Figure 2: Customer Contact Center Evolution



and other business rules. Separate channels require separate management, staffing and reportingmechanisms for tracking and reporting agent performance. This architecture does not facilitateuniform archiving of customer contacts. Details of the different contact types must be stored in andretrieved from different systems; meanwhile, an agent answering a PSTN call may not have access toinformation the customer just entered on the web site.

In a fully merged network (either virtual or physical), all incoming calls, including voice calls from thePSTN or voice calls through an ISP, e-mail, text messaging and faxes can be routed to the best agent,based on agent skills and availability. The agent in these new multimedia “contact centers” can be atthe home office, a branch office or even mobile. Resources located anywhere can contribute to buildingcustomer relationships. A fully merged network is also based on open-standard, multivendor-supported hardware and operating systems, thus enabling integrated customer-centric systems to bedeployed to as many participants as necessary, if not the entire enterprise.

In addition to using multimedia channels to provide ubiquitous access to contact centers, acquiringand analyzing the history of a customer’s inquiries can now enable inquiries to be routed based on apredictive model of the caller’s behavior. Enabling multichannel contact support with full CRMcapabilities is at the core of the value created by converging voice and data networks at the enterprise.CRM provides the customer intelligence at all customer contact points to maximize every contact.CRM should provide a consolidated view of the customer to ensure that each agent has completeknowledge of every interaction across all channels of communication, including telephone, e-mail, textchat, web VoIP, fax and page.

By enabling the enterprise to track and communicate all aspects of customer relationships throughoutthe enterprise, rapid, consistent and knowledgeable service can be provided. This creates value for boththe enterprise and the customer. Many providers of CRM solutions have partnered withplatform/hardware manufacturers to ensure compatibility and scalability. These CRM solutionsgenerally provide computer telephony integration (CTI) to support leading PBX, IVR and predictivedialing technologies.

Along with investment in CTI, investments in CRM are seeing tremendous growth. According to theMETA Group, the global market for CRM solutions is projected to grow by 50 percent annually,increasing from more than $13 billion in 2000 to $67 billion in 2004. Analytical CRM software,consulting and systems integration services will be the fastest-growing segments through 2004, withan average annual growth rate of 82 percent.

C O N T A C T C E N T E R C O M P O N E N T S

Current business practices fragment contacts around separate business functions (marketing, sales,fulfillment, customer inquiry) at separate contact points (sales department, call center, web-enabledagents) through separate contact channels (telephone, e-mail, client/server applications, chat and VoIPstations). The communication revolution brought about by the Internet will forever change how theenterprise communicates with customers. Instead of using separate contact points and channels, eachwith its own personality, customers will be able to interact with the enterprise through any device(phone, PC, PDA, etc.) and later move to any other channel (phone, cell or web) while having aconsistent experience throughout the enterprise.



Because of the convergence of its data and voice networks, the contact center has become the focal pointand distribution center of all customer, supplier, and partner contacts. The intelligent contact centerinterprets information (name, e-mail address, dialed number, ANI, account number, etc.) from theincoming call (e-mail, fax, web VoIP call, web site transaction, etc.) and handles the call in the mostappropriate way based upon the marketing needs of the enterprise and the specific relationship with thatcustomer. Having customer intelligence available to the agent in real-time (even before taking the call)makes the process of getting information easier for the customer and more efficient for the enterprise.

Many contact center functions will be enhanced by the convergence of voice and data networks, whileentirely new capabilities will be enabled. Again, convergence can be either virtual or physical. Beloware some highlights of the features and benefits of aconverged contact center.

Contact Routing and DistributionIntelligent contact management begins at the first pointof contact. Distribution of customer inquiries is themost significant feature of these new, integrated contactcenters. Getting the call (e-mail, chat request, fax, website VoIP call, etc.) to the best agent the first time iscritical to providing world-class service. Previously, onlytelephone calls had to be distributed to agents. Now, notonly must calls and voice mail be distributed, but e-mail,text chat, call back and call-through (web VoIP) callsmust be routed to the best agent, whether that agent islocated at the home office, a branch office or an at-homeworkstation.

Call distribution should be based on a multimedia-handling model that makes skill and availability-baseddistribution easy to design and manage. Managing thedistribution of these calls has evolved using linearprogramming and queuing theory algorithms over thepast two decades. Often, call distribution “rules” werebased on agent skill sets (e.g., language, skills) and theirwork state (e.g., availability, workload). Key measures intraditional call centers are “average speed of answer(ASA)” or “average wait time (AWT).” In today’smultichannel, multimedia contact centers, these samedistribution algorithms need to be applied to IP-basedinquiries, such as e-mail or web-chat requests.

In the ‘web-enabled’ environment, e-mail, chat and web VoIP calls may be routed based on skills, i.e.,agents that may respond to only one type of customer call. For example, four seats may be dedicated toanswering e-mail generated from web sites. Agents have to swap seats to respond to different callchannels. With intelligent call distribution over a converged network, contacts can be distributedthroughout the enterprise based on elaborate business rules and agent tables that send contacts to themost appropriate resource, regardless of channel or agent location.

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Due to tremendous growth in demand atits consumer retail site, a major computerequipment manufacturer was seeking anoutsourced contact center vendor tohandle an increased number of inboundinquiries via multiple contact channels(voice, web and e-mail). Convergysprovided a solution that seamlesslyintegrated multiple contact centersupport elements into a full customer careprogram. The components includedintegrated IVR and CTI that reduced staffcosts. IVR and CTI combined to accept andcollect information on the type of call(order, return or information request),order number and product type. The IVRcomponent fully handles all customerinquiries in a large percentage of inboundcalls. When a live agent is needed, CTItransfers all information of thecustomer/IVR “dialog” to the agent,enhancing the customer experience andreducing talk time for the agent.



Interactive Voice ResponseThe interactive voice response (IVR) system is another system that integrates with the PBX, callrouting and distributing devices, as well as the unified messaging system. The IVR can dispensecustomer specific information, and gather information to enable efficient call routing. To the caller,IVRs are often the first interface, offering the caller multiple choices, called "menus", e.g., "Press 1 fororders, press 2 for billing, etc."

At the converged contact center, in addition to PSTN calls, web-initiated VoIP calls can be routed to theIVR. Enterprises deploy IVRs not only to improve customer service levels but also to reduce thestaffing costs of call centers. Off-loading 25 percent of the call volume from agents to an IVR implies a center may reduce its staff and HR budget.

Computer Telephony IntegrationCTI marries information gathered from the incoming call to customer information in enterprisedatabases within the CRM environment. Information from the incoming call enables calls to be routedand transferred more easily and can provide details of the caller to the agent in the form of a "screenpop." Information that can be collected from incoming calls includes telephone number, numbercalled, caller name, caller-entered information, e-mail address, etc. CTI results in higher agentproductivity and customer satisfaction, since an agent receives the caller’s account information on themonitor at the same time that the phone call is received.

Agent and Supervisor ReportingAgents should be able to monitor their own performance during the course of their work. The contactcenter system should provide real-time statistics to the agent, as well as the supervisor. Historical datashould also be easily retrieved. Information such as the number of calls answered, the length of allcalls and the number of calls in the queue should all be available. More sophisticated ad hoc reportingshould be possible if standard database tools are used. Historically, these call management systemsallowed managers to predict staffing levels based on prior call volumes. Now, call data and transactionscan be ported to a CRM data warehouse server, enabling the enterprise to predict caller behavior aswell.

Unified MessagingIn the converged contact center, unified messaging puts all mail messages (e-mail, voice mail and fax)into one queue in one client application. Everyone in the enterprise can send and manage messagesfrom any wired or wireless access device, regardless of message channel and type. The enterprise,including remote employees, will benefit by being able to use one messaging application to managecommunication. All message types can be retrieved, sorted, viewed and archived from within the LANor from the WAN via dialup or VPN. Messages can be retrieved over the telephone, from a desktopmessage client or from a web site using a standard browser.



Real-Time ServiceEnterprises should also consider how they might use service tools to differentiate themselves in theirmarket (Figure 3). Real-time services enable interaction on par with live phone calls, enabling morecomplex inquiries to be resolved quickly. Key tools include:

Text ChatWeb site visitors can use text chat to chat with live agents. Site visitors click on a linkon the page to initiate a chat session. Agents can conduct chat sessions with one orseveral customers simultaneously.

In a web-enabled-only environment, web chat might point to web chat agents only. Atthe contact center with converged voice and data networks (either virtual or physical),chat can be distributed to agents based on customer-entered information such asname, e-mail address, and account number. Text chat is more cost-effective thanregular telephone calls because agents can resolve inqueries more quickly.

Assisted BrowsingWith both customers and agents now having common IP access to corporateapplications, a new degree of transaction intimacy emerges. For example, a consumerbrowsing a PC manufacturer's web site might need assistance. By using either textchat or VoIP tools, that consumer can reach a live agent. The agent can then pushspecific web catalog pages to the consumer’s screen, resolving the prospect's complexsearch quickly and turning an inquiry into a sales transaction.

Web-initiated VoIP CallsCustomers can initiate VoIP calls to the contact center while browsing web sites.Alink on the web page allows customers to talk to a live agent when they have questionsabout their account, need information to complete a form or a sale, or simply wantmore information. While speaking to an agent, the customer can view the same webpage as the agent, who can ‘push’ a particular page to the customer while discussingcontent. Moreover, the agent can assist the customer in completing sales, updatingaccounts and more.

In the web-enabled environment, dedicated resources take these calls. At theconverged contact center, web-initiated VoIP calls are routed like those from all otherchannels – based upon information gathered from the call itself. This informationmay include the IP address of the calling device, as well as customer-enteredinformation such as name and account number.



Video over IPMany customers are reassured when they can see the person with whom they aredealing. For example, although visiting a bank is no longer necessary because ofdirect deposit, debit cards, and ATMs, many people are reassured about the safety oftheir money when they can conduct their business with a live teller. In the same way,customers may like to see a company representative. A merged voice and datanetwork enables one and two-way video teleconferencing from desktop to desktop viawired or wireless communications. Although videoconferences make up a tinyproportion of today’s computer-based customer care interactions, it’s easy to predictthat the proportion will rise dramatically in the future.

T H E C O N V E R G E D N E T W O R K

How do separate data and voice networks merge?What some vendors call an “IP PBX” merges voice and data networks. An IP PBX is a type of callserver that provides the call control functionality otherwise provided by a traditional PBX for circuit-switched networks. The call server may also serve as a gateway for routing calls between the enterpriseLAN and the PSTN. Many traditional PBX vendors add IP ports to current ACDs and PBXs. Thislatter approach provides a blended architecture (virtual and physical) consisting of both legacyswitching technologies and IP-based switches enabling the circuit-switched network to be used as abackup if voice traffic on the LAN should overload it (Figure 4). In the illustration, the enterprise usestwo separate networks, the Internet and the PSTN. As carriers blend their business offerings, thesetwo networks will begin to converge at the carrier level. Often, the local phone company is also theInternet service provider (ISP). There are also startup Internet telephony service providers (ITSPs)beginning to be competitive in smaller markets. However, the merging of networks can beaccomplished at the enterprise level as well.

Figure 4: Enterprise Network



Converged LANConverging voice and data LAN impacts most, if not all, enterprise services, including systemsmanagement, switching, call control and distribution, IVR, enterprise databases, client/server anddesktop applications, VPN and branch office circuits. Since all enterprise assets are accessible on onenetwork, the entire network is available to each workstation whether that workstation is at the homeoffice, a branch office or the small office/home office (SOHO) of a distant worker. The mergednetwork means that each worker can receive customer information from corporate databases whilespeaking with that customer. A customer care specialist, or anyone in the enterprise, can receiveinformation gathered from the PBX, web, or customer-entered data, as well as corporate databases.This convergence of CTI functionality and LAN-based customer relationship and data systems is wherethe enterprise might see the greatest value from migrating to a converged network. Additionally, everyparticipant in the enterprise will benefit from new functionality, such as unified e-mail, voice and faxmessaging, as well as easier moves, adds and changes.

Legacy PBX SupportThe architecture in Figure 4 illustrates the continued reliance on a legacy PBX for certain modems, faxmachines, phones for emergency use, recorded announcement devices, paging systems, answeringmachines and conference room speakerphones. Depending on the vendor chosen, these devices mayneed continued connection to the legacy PBX for satisfactory performance. Fax machines in particularmay not work over an IP LAN because they are sensitive to lost packets. Some existing analog devicescould be modified to function with the new call managers and firewalls, or they may need to bereplaced.

Gateways & GatekeepersGateways translate signals back and forth between analog phones and IP networks. Gateways alsoresolve addressing issues between the two systems. In order to place a call to an IP-based terminalsuch as an ethernet phone or multimedia PC, the IP address of that device must be known andtranslated by the gateway. Gateways make it possible to use standard telephones to talk over an IPnetwork.



D E S K T O P O P T I O N S

Merging voice and data networks involves not only gateways and call servers, but also making changesto the desktop configuration. Depending on the vendor, the enterprise could use its multimedia PCs incertain instances and add ethernet phones in others. Alternatively, all analog phones might be replacedwith new phones or upgraded with ethernet adapters. This section explains some of the vendor optionsfor connecting phone sets to the LAN (Figure 5).

Ethernet PhonesSome existing analog phones can be upgraded with the addition of an ethernet card or adapter. For themajority of new implementations, new phones must be used. At the agent’s desk, there are severaloptions for connecting phones and PCs into the LAN. Ethernet phones can be connected directly into aseparate LAN jack and become independent, addressable devices on the LAN. They can also beconnected serially. The phone can be plugged into a second jack on the ethernet adapter of the PC, orthe PC can be plugged into a second jack on the phone.

Connecting the phone directly into its own port on the LAN may seem to be the logical choice since itis most like the typical PBX configuration. However, having the phone and PC connected one into theother and sharing a machine address code (MAC) address may make it easier to integrate CRMsoftware on the PC.

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Figure 5: LAN-Based IP devices



While analog phones cost around $50, ethernet phones can generally range between $300 and $600.The cost of IP phones will come down as technologies advance and vendors agree on standardconfigurations. There is also a very limited selection of phones, and feature sets are specific to thevendor. Prices will come down and the number of choices will increase as ethernet phones become acommodity and more manufacturers join the field. Future upgrades to ethernet phones may be assimple as receiving a software ‘push’ (or flash) from the network administration server or by replacinga card or chip.

SoftPhonesSoftPhones are software applications installed on client desktops or laptops. They require a multimediaPC equipped with a sound card and microphone. SoftPhones offer customizable graphical interfacesthat support call controls and employee productivity features, including multiple call appearances,Caller ID, call originating and answering, drop, hold, transfer, conference calling, speed dial and sendall calls, as well as a message waiting indication. One advantage to SoftPhones is that multimediabusiness PCs are typically already equipped with the necessary hardware and do not requiremodification. Another benefit is that upgrades are simply a matter of installing new software.SoftPhones may also integrate more readily with CRM software than separate ethernet phones might.As an application on the same platform, the SoftPhone may more easily recognize and shareinformation provided with the call with another resident application. Call information such as nameand calling number, number dialed, customer demographic data and customer account informationcould be presented to the agent either in the CRM software interface or via a screen pop.

Sturdy computer headsets typically cost between $20 and $100. Vendors are also offering SoftPhonesthat use separate phones that resemble regular telephones and have handsets.

WirelessMuch like VoIP, wireless devices including entire wireless LANs are gaining in popularity. Integratingwireless devices such as wireless PCs and PDAs on the converged network should pose no particularproblems for the systems integrator or administrator. Completely wireless LANs may offer cost savingsbecause of the elimination of the need for any cabling. Branch offices, campus facilities and mobileworkers will be the first to use wireless LAN devices.

B E N E F I T S

One NetworkBy moving voice and data on to a single infrastructure, the need for dual service and support iseliminated. Moves, adds and changes become a matter of unplugging and plugging PCs and phonesets into another outlet on the LAN. The LAN recognizes the address of the terminal device, and itworks immediately. Simple moves of traditional phones cost approximately $200 each. If the staff isable to move its own equipment, this cost is greatly reduced. Network administration is handled via aLAN-based administration package. Cost savings are realized because the operating costs of a singlevoice and data LAN are less expensive than operating separate networks.



As mentioned earlier, two approaches exist to implement a single infrastructure. The full physicalsingle infrastructure that provides full benefits, or a virtual infrastructure using some single commoncomponents and some merged gateway components. This latter approach accomplishes, at least in theshort run, many of the benefits described without the full investment needed.

Increased Agent ProductivityIntelligent call distribution allows customer care agents to be more productive. Merging CTI and CRMsystems at the agent desktop brings more information about the incoming call to the agent. The agentmay know the number dialed, caller name, account number and account history even before saying“hello.” Agents will spend less time on each call because the CRM software on their desktop providescustomer information that otherwise would have to be gathered by asking the customer. In aggregate,the enterprise might be able to realize the same service levels with less staff. At the same time, themost appropriate business area and skilled agent takes the call the first time, thus reducing the volumeof calls that must be transferred to another business area or agent.

Distance AgentsCompetition for contact center agents hasincreased in the past decade as more enterprisesembrace and deploy CRM programs. Newtechnologies allow contact centers to be staffedwith new, alternate labor pools. Intelligent callrouting allows calls to be routed to SOHOworkers (teleworkers) who can access the sameapplications as their colleagues at the office. TheSOHO agent -- equipped with a broadbandconnection -- can run applications over a virtualprivate network (VPN) under severalconfigurations. The client CRM/CTI software canbe installed on the PC and run in a client-servermode, or it can run as a published application ona server at the enterprise server farm. Manyapplications allow secure VPN deployment ofbusiness critical applications to distant agents viathe Internet or extranet. Infonetics Researchforecasts a 529 percent increase in VPNexpenditures from 2000 through 2004.

Since home workers log into the sameapplications as those in the office, their contactswith customers are recorded and theirproductivity can be monitored and reported justlike their office-bound counterparts. The costs to provide a home worker with high-speed Internetaccess, a leased computer and desk may be some fraction of the cost of the same services at a corporatefacility. Absenteeism and turnover rates for teleworkers may be lower when workers can work at leastseveral days a month from home. Workers may also be more willing to work odd shifts when they arenot concerned about driving at night or during bad weather.


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Convergys recently established a contactcenter in India. In the United States, avoice access line to a contact center canhandle 24 simultaneous calls. The cost forthis service is very modest. However, avoice access line between the UnitedStates and India can be extremelyexpensive and largely diminish potentiallabor cost savings. Convergys engineers,implementing voice-over-IP, are able toincrease the number of simultaneous callson the India voice access connection tojust over 150, or an increase greater thansix-fold. This engineering accomplishmentallows clients the labor cost saving benefitof an offshore contact center without thesignificantly increased overheadassociated with telecommunication costs.



Long Distance ChargesReduced long distance telephone charges remain an attraction for many organizations. Although verylittle, if any, savings will come from domestic long distance rates because of fierce competition andlower tariffs, international calls remain expensive. For enterprises with geographically dispersedoffices, VoIP offers a way to bypass the PSTN. Long distance and international voice, video and faxcalls between branch offices can be made over the corporate Intranet or carrier network. A combinedvoice/video/fax gateway enables least-cost routing. Dedicated bandwidth connections and callprioritization techniques will need to be employed in order to meet Quality of Service (QoS) standardsfor this voice, video and fax traffic.

Faxes could be sent over a VPN or dedicated connection. It’s estimated that the average fax machinecosts $7,500 per year in long distance charges. Significant savings would be realized if long distancefaxes were sent over the IP network.

C H A L L E N G E S T O C O N V E R G E N C E

A number of roadblocks inhibit the implementation of VoIP at the enterprise level. These includeperceptions of poor QoS, a non-interoperable vendor solution, high cost, security vulnerability, thepower source to the phone and uncertainty regarding telephony standards. Additional attention is paidto Regulatory and standards issues in the following sections. Briefly, some of the other issues are:

• Expectations of quality• Reliability and redundancy• Power to the phones• Limited feature sets• Integration value, the ‘killer app’• E-911 compliance• Telephony standards and vendor specificity• Distance limitations• Network management• Security• Training• Upgrades

Quality of Service (QoS)Those who have experimented with consumer Internet telephony applications know that VoIP QoSover the public Internet is not comparable to that provided by the plain old telephone system (POTS).VoIP call quality, even for local calls, is often poorer than that achieved with today’s cell phones. Thatlevel of quality is not acceptable for business calls.

One of the primary issues for VoIP QoS is latency (or delay). Latency is how long it takes for packets totravel end-to-end. In the case of the enterprise, the two end points are the IP PBX and the Ethernetphone or SoftPhone on the agent’s desk. Factors affecting latency include the codec and compressiontechniques employed. For example, voice codec's H.711 and H.723 code and decode voice at differentcompression rates, thus delivering different QoS. There are also issues with echo and packet loss.



To provide high quality, a system to prioritize voice calls (packets) across the network must beintegrated into the system. Such a system will ensure that voice packets arrive at their intendeddestination in time to be reassembled into a voice signal. An analogous prioritization scheme must beused in the WAN to guarantee the quality of VoIP connections between branch offices. Many carriersare beginning to offer packet prioritization to their business clients.

Compared to the public Internet, the enterprise LAN is a more easily controlled environment whereQoS can be engineered into a complete VoIP solution. However, industry working groups are stilltackling guaranteed network QoS issues.

IP PBX Reliability and RedundancyEnterprises, especially customer care providers, are accustomed to the "five nines" (99.999% or 6minutes downtime per year) reliability provided by their PBX or Centrex. Migrating to a system that isless reliable will not be acceptable. The reliability of IP PBX solutions must be understood whenevaluating such a system, since testing of early-generation IP telephony servers indicated they mightnot perform at the same level as traditional circuit-switched telephony. Issues affecting reliabilityinclude whether there are redundant components that can come online when there is a failure.Uninterruptible power supplies (UPS); battery backup systems and hot-swappable parts are alsoimportant considerations in delivering reliability.

Power to the TelephoneEthernet telephones require electric current in order to function. How they receive the power is anissue still in development. Phones could receive power from a separate power adapter or they couldreceive it through the wiring. Phones that use additional power supplies or adapters would remainsusceptible to power failures.

In several vendor scenarios, power is supplied to ethernet phones via an unused pair of wires in theCategory 5 cabling. However, standards for such cabling have not been established and solutionsremain vendor-specific. Putting current on the LAN allows the possibility for non-compliant devices tobe inadvertently connected to the LAN, potentially damaging that device. The IEEE 802.3af committeeis still deciding how to standardize power distribution.

Limited Feature SetsOver the past ten years, users have become accustomed to increasingly elaborate and sophisticatedcalling features provided by the PBX. There are literally hundreds of features programmed into thetypical PBX that businesses use to manage incoming and outbound calls. Early vendor IP phones havenot delivered anywhere near this quantity of calling features. It can be expected that vendors will seekto replicate many of today’s PBX features into future product releases, but this process will take time.Whether or not the integration of business and customer service applications with CTI is enough tooffset reduced phone set functionality must be considered when selecting a VoIP system.



Integration Value, the ‘Killer App’The real power of an integrated network comes when every associate in the enterprise, especially thoseon the front lines of customer contact, have at their disposal, in real-time, customer and company andproduct-specific intelligence that will empower them to interact with the customer quickly andefficiently. The development of powerful integrated CTI/CRM systems will demonstrate the lastingvalue of converged networks. Again, a partial physical converged and virtual converged network willaccomplish many of the benefits described.

Emergency 911 DialingAnother consideration is support for emergency 911dialing. Because of the addressing scheme of IP-baseddevices, information that determines the source andlocation of a 911 call is generally not sent along with thecall. IP solutions that are E-911 compliant are underdevelopment. The FCC is currently looking at issuessurrounding IP PBX and wireless E-911 compliantservices. At issue is how multiline telephone systems(MLTS) provide automatic number identification (ANI)and automatic location information (ALI) thatapproximates the information given to public safetyanswering points (PSAPs) and emergency service bysingle-line residential and business telephone service.

Telephony Standards and Vendor SpecificityAs mentioned above, Internet telephony standards arestill under development. In this uncertain environment,companies must be careful when selecting a VoIPsolution. Some products already on the market aremultistandard compliant, while others can becomecompliant with emerging standards with simple andinexpensive modifications. Boards and cards can beexchanged, the BIOS can be upgraded, and new softwarecan be installed. Several of the key ITU and IETFstandards and protocols are discussed below.

Distance limitationsEthernet terminals (PCs, IP phones, etc.) can be locatedno farther than 100 meters (328 feet) across copper wirefrom a switch or hub. On the other hand, proprietaryPBXs allow phones to be located up to 2 kilometers(6,561 feet) away from the PBX. To connect subnets thatare more than 100 meters apart, ethernet repeaters orethernet fiber optic converters can be used.


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Convergys answers technical supportinquiries for consumers and businesscustomers. Technical support ranges fromsimple software and hardware installationand operating assistance to highly complexissues such as network configuration orsoftware consultation. Convergys providesthese services to leading edge technologycompanies, such as PC, network and PBXOEMs, as well as software companies.

The demands to attract and retain qualifiedemployees providing these supportservices are tremendous. Convergysinstructors hold many certificates such asA+, MCSE, MCSD, MCDBA, CCT and CCNA.Staff members are provided competency-based appraisals quarterly and are requiredto become certified technical trainers.

Convergys is a Microsoft Solution Partner, aswell as a Microsoft Certified TechnicalEducation Center (CTEC). The CTECprogram creates direct value to agents’skills by providing additional training on thelatest technologies.

Because of these training and jobenrichment programs, Convergys is able toeffectively attract and retain employees.Convergys clients and their customers reapthis value of higher-skilled workersproviding a better service experience.



Network ManagementManaging ethernet phones is a very different proposition from managing analog phones on a PBX. Aphysical port typically manages analog phones. With IP PBXs, there is no concept of a PBX port.Rather, administration is accomplished with user names, device names or MAC and IP addresses. Ifphones were addressed by user name, users would be able to log in to any phone on the LAN whilemaintaining the same phone number, class of service and privileges. A global directory service such asLDAP (lightweight directory access protocol) could be employed to manage the entire enterprise.Another layer of complexity is added if sophisticated call control and distribution by skills-based groupsof users and other elaborate routing rules are applied. If each phone was managed based upon its IPaddress, this would require that static directory name service (DNS) addresses be assigned. This couldmean that the enterprise-addressing scheme would need to be modified to accommodate an almostdoubling of the number of devices on the LAN.

SecuritySome organizations will want to encrypt at leastsome of the data and voice traffic over publicnetworks. Some may also want to encrypt certainLAN traffic. This encryption may impact QoS overthat segment of the call. The processor power andtime it takes to encrypt and decrypt packets mayincrease the latency of those calls. Encryption isanother area where vendors offer vendor-specificsolutions that may not be compatible in amultivendor environment.

TrainingNew ethernet phones or SoftPhones will undoubtedlyprovide different features that users will have tolearn. User training will be even more involved ifnew or enhanced desktop CRM software isimplemented at the same time.

UpgradesIf the system is built on open system architectureand common operating systems, in theory, it will beeasier and less costly to upgrade. In practice, leadingvendors are developing vastly different solutionsbased on a variety of operating systems, servercombinations, redundancy, ethernet phones, etc. Asthe industry consolidates around fewer (and morerobust) technology solutions, the cost of equipmentand upgrades will come down.


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Convergys is active in over 15 differentassociation and regulatory bodiesworldwide. Some of these entities providedirect input into forming national andinternational standards. Others are muchmore centered on fostering greaterunderstanding of industry-wide issues. Forexample, Convergys is on the executivecommittee of CIBERNET, which is anorganization that administers the billing andfinancial accounting systems used by thewireless industry. CIBERNET is part of alarger umbrella organization, the CellularTelecommunications and InternetAssociation (CTIA). CTIA, founded in 1984,represents all elements of the wirelessindustry and is considered the voice of thewireless industry.

In customer care, Convergys is active in avariety of different trade organizations andassociations. Convergys earned the GoldMVP Award from Customer Inter@ctionSolutions magazine for excellence in theintegrated inbound/outbound/Web,business-to-business and business-to-consumer categories. Frost and Sullivanrecognized Convergys with the 2001Marketing Strategy award for marketingand business development in the contactcenter market.



R O L E O F S T A N D A R D S

Proprietary SolutionsAlthough vendors profess to provide open, distributed, standards-based solutions, the reality is that thecurrent offerings of IP PBXs and related computer telephony devices are just as proprietary as legacyPBXs. For example, in many cases only proprietary telephones, hardware, operating systems andcabling schemes provided by the vendor will operate with the vendor's systems. With time, vendorswill offer interoperable building blocks that build on the best practices being developed. When openstandards become a reality, third-party partners will be able to offer interoperable solutions.

After years of excellent availability and reliability from PBXs and the PSTN, the enterprise will expectthe same level of service from an IP-based network. They would also like to keep the same feature setto which they have become accustomed. Standards, once adopted by leading vendors, will ensure thatdevelopers and integrators will be able to deliver complete solutions that will be just as reliable,scalable and deliver the same QoS as the PSTN, as well as provide the same features available intoday’s PBXs.

Although a complete description of the Internet telephony standards is beyond the scope of thisdiscussion, it’s relevant to understand a little about the major recommendations for transporting voiceover the LAN. It’s also relevant to understand that these recommendations are still under development.

The Internet (and associated protocols and standards) was originally designed primarily as a datanetwork. The idea that, with sufficient bandwidth, it could carry real-time rich media (voice and video)at carrier-grade service levels is a relatively new development. One of the earlier sets of standards(H.323) is only five years old, and was originally branched from standards for video transmission overISDN (see below).

As the idea of merged data and voice networks is a relatively new one, considerable technical workremains to be done to make the Internet and other packet networks more appropriate for real-timevoice and video.

In an environment of uncertain standards, the development of end-to-end, interoperable systems isprogressing more slowly than many would like. As a result of the immature nature of the technologyand standards, current vendor VoIP offerings are very different from one another in terms ofclient/server configurations and feature sets.

The primary challenge for developing VoIP applications is that performance requirements andstandards associated with signaling in the PSTN are not currently supported in the IP network. IPnetworks require more elaborate signaling due to the different nature of the end points. Before twoend points (PC telephony card, ethernet phone, analog phone) can establish a connection, it must bedetermined what features they have in common and can share.



Where Standards ApplyA phone call is composed of four areas where standards play a role. When a number is dialed orchosen from a pick-list, signaling is required to determine the capabilities and status of the called party-- available or busy -- and to establish the call. When the conversation begins, the analog signalproduced by the microphone is encoded in a digital format for transmission across the IP network. TheIP network must ensure that adequate bandwidth is available and that the voice transmission has theappropriate priority in order to be transported and received with an acceptable voice quality. Lastly, thesignal may need to be converted by a gateway to another format in order to inter-operate with the PSTNor another network. For each of these telephony operations, (signaling, encoding, transporting, andconverting via a gateway) there exists one or several overlapping and sometimes competing standards.Three groups of standards stand out as having significant influence on system design from both thecarrier and enterprise perspective. The three are H.323, Session Initiation Protocol (SIP), andMGCP/Megaco (H.248).

H.323H.323 was developed as a suite of recommendations that define packet standards for multimediaservices, systems and terminals for rich media communication over LANs communicating withsystems connected to telephony networks such as ISDN. ITU-T Study Group 16 created H.323 tohandle the four major components for a network-based communication system:

• Terminals• Gateways• Gatekeepers• MCUs—multipoint control units

Terminals are endpoints such as analog phones, SoftPhones and ethernet phones. SoftPhones are PCapplications that generally use a handset or headset plugged into the sound card or USB port.Gateways and gatekeepers negotiate the PBX - PSTN interconnection, while MCUs enable multipartyaudio and videoconferences.

Version 1 of H.323 was adopted in June, 1996, Version 2 was approved in January 1998, and Version 3has recently been published. Each successive version resolves earlier issues and introduces newfunctionality within existing protocols, such as Q.931, H.245, and H.225, as well as entirely newprotocols. The most significant advances are in security, fast call setup, supplementary services, andT.120/H.323 integration. Figure 6 provides an overview of the scope of standards beneath the H.323umbrella of standards.

Key standards within H.323 are:• H.225 — defines call signaling including registration, admission, and status (RAS)

• H.245 — defines call control

• RTP/RTCP — real-time transport protocol/real-time control protocol defines the requirementsfor transporting real-time data over the packet network.



SIPSession initiation protocol (SIP) is a protocol for creating, modifying, and terminating VoIPconnections. Work on SIP began late in 1996 to solve the problem of inviting users to joinmulticasting backbone (Mbone) sessions. SIP began to gain acceptance as an IP telephony protocol in1998 when the Internet Engineering Task Force (IETF) approved the RFC.

MGCPThe media gateway control protocol (MGCP) and H.248 recommendations specify communicationbetween call control elements and telephony gateways. They were developed partly to address some ofthe shortcomings of H.323. Several international standard boards are working on a standard that usesthe same architecture and baseline as MGCP, but supports ATM.

MGCP addresses call signaling, control and processing in call agents or media gateway controllers.Media gateways (MG) are telephony gateways that serve as multiservice packet networks, convertingaudio signals and data packets. MGs interface with trunking, voice over ATM, residential, access andbusiness gateways, network access servers and circuit switches.

Figure 6: Scope of H.323 standards

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R E G U L A T O R Y E N V I R O N M E N T

While telephone service has traditionally been heavily regulated, regulation of Internet telephony is stilllargely a question mark. In many countries, governments or government-run entities retainmonopolies for provisioning telephone service. These monopolies are beginning to give way, althoughthe process is time-consuming and often politically charged.

For the enterprise beginning to carry some of its voice, video and fax traffic with branch offices over itsinteroffice data connections, FCC and foreign governments rulings on Internet telephony may be anissue. Regulations should not be an issue for building strictly internal IP capable systems, that is,systems that are converged within the enterprise but which connect to the circuit-switched PSTN.

M I G R A T I O N S T R A T E G I E S

Adoption of IP PBXs has been slowed due to a number of factors. One reason is that complete end-to-end vendor/partner solutions are new and just now coming to market. Another reason is thatuncertainties remain with respect to standards, scalability, costs, enterprise ROI, protocols, regulationsand QoS. As these uncertainties are resolved, the pace of adoption will increase.

For the reasons above, it is premature to expect many enterprises to seriously consider forkliftreplacement of legacy PBXs, at least in the near term. However, organizations that have PBXs nearingthe end of their lifecycle should begin to evaluate vendor options.

More likely than a complete replacement, IP-based PBXs and gateways will be added to the LAN toprovide interconnectivity between circuit switched and packet switched networks. This blendedarchitecture should offer the best of both worlds. Certain legacy devices such as conferencespeakerphones and fax machines may require the circuit-switched network for some time to come.

Web Enabled, One ApproachBased on what the enterprise learns from its experience in web-enabling its business and customercontact model, it can begin to understand demographic trends toward web-centric customer care. Thenext step is to evaluate the return on investment of merging voice and data networks andimplementing combined CTI and CRM solutions. The true power of a converged network is realized atthe agent desktop via integrated customer focused applications.

Pilot Project, Second ApproachEnterprises building new facilities with new communication closets and cabling plants will want toseriously evaluate options in building a converged network. Organizations with considerableinvestment in fully functioning legacy PBXs and CRM solutions will probably want to wait until thevendors offer proven, scalable systems. Both could consider conducting pilot IP contact centerprograms with vendors or partners in a test environment. Outsourced CRM solutions, including thoseoffered by Convergys, are often a prudent way to conduct such trials. These vendors are faced dailywith managing all the technology elements while delivering value-based customer care programs totheir vendors



Select CRM Solution, Third ApproachSince the CRM solution is where much of the value of convergence is derived, it makes sense to firstevaluate emerging solutions from leading providers. Many of the CRM telephony platform providerspartner with CRM software developers to provide enterprise-class solutions. Platform buying decisionsshould be based on the value provided by the CRM solution.



H O W C O N V E R G Y S A D D R E S S E S C O N V E R G E D N E T W O R K S

An interview with Dan Dineen, Vice PresidentNetwork Services, Convergys Corporation.

Q: Could you describe what "convergednetworks" means at ConvergysCorporation?

The term "converged networks" has several differentmeanings. We discuss the “physical” definitionwhere voice and data networks all share the sameinfrastructure and can be fully managed together.At Convergys, however, we prefer using the “virtual”definition of converged networks that reallyaddresses the convergence of business transactionsto achieve business goals such as increased levels ofservice or increased agent efficiency. Theconvergence of business transactions uses some truephysical shared network components but it will alsoutilize multichannel connectors and gateways tomerge voice and data transactions where it makesbusiness sense. This Convergys “virtual” approach toconverged networks has already helped the companyachieve many of the benefits described in industrypublications.

Q: Does Convergys currently offer clients the full range of customer contact channels, e.g.e-mail, text chat, call back, VoIP call through (over the Internet)? Are you web-enabled?

Yes. We offer all of these contact channels to our clients and their customers. Often, each contactchannel (text chat, e-mail, VoIP, etc.) is handled by separate groups of agents. There may be multiplechannels handled by the same agent but not typically in a transaction-by-transaction manner. Agentsgenerally support one application or another. We are beginning to develop more multichannel agentapplications. Agents will be able to receive calls (voice, chat, e-mail, etc.) filtered by the "intelligence"gathered from the source of the contact rather than just the channel. For example, sales calls, e-mailsand chat sessions can be routed to sales agents instead of having all e-mail contacts routed to ‘e-mailonly’ agents.

Q: Is Convergys using VoIP now? If so, how and where?

Voice over IP calls are carried between some Convergys sites over the corporate WAN. This is madepossible because of switching and routing that takes place using our own networking gear from ourvoice and network vendors. We are also using VoIP to extend contact centers in the U.S. to our sites inIndia using voice compression over international private lines using IP solutions. Convergys’ switchesand routers are doing the IP routing. Some of Convergys’ contact centers also support at-home agents.IP solutions are used to connect these agents to our central ACD system and business applications onour network.


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Dan has responsibility for voice and datanetworks, including IVR and CTIcapabilities and overall network systemadministration for more than 50 customercontact centers. Dan has been withConvergys for 18 years and has held avariety of positions within thetelecommunications organization.Previously, Dan worked for First DataCorporation. Dan has a B.S. degree fromCreighton University in Omaha, Nebraska.



Q: What are Convergys’ plans for converging voice and data networks?

Convergys currently carries domestic and international voice traffic over our IP wide area network(WAN). We are beginning to investigate technologies and proposals from vendors in the IP PBX space.We work with industry-leading providers of complete converged networking solutions that our currentinfrastructure is built upon. Additional VoIP and IP contact center implementations will be completed in2001.

Q: What advanced products or services will Convergys be able to offer your clients if youmerge your voice and data networks.

We have already built integrated ACD/CTI/IVR systems that provide customer account details toagents at the same time the voice call is delivered through our "virtual" converged network. Thisconfiguration allows customer relationship management (CRM) capabilities all the way to the desktop.The primary benefits of a fully "physical" converged network are the added efficiency in theimplementation and management of the overall network.

Q: What does Convergys expect to gain in terms of network efficiency (i.e. costs associatedwith building and maintaining separate networks)?

Combining voice and data traffic through shared network components has enabled Convergys to gainefficiencies in our support of our technical infrastructure. Convergys Network Services manages voiceand data services under one management team. Many desktop technicians currently service bothtelephone and PC/LAN infrastructure. Convergys has a separate data networking team that worksclosely with voice specialists in combining services where possible, and we frequently share accesslines for both voice and data. Convergys anticipates a continued need to have voice and data specialistsdue to the inherent complexity of voice and data technologies.

Q: What other cost savings will come because of a converged voice and data network?

By combining voice and data networks, total costs for voice and data will continue to be reduced asmore traffic is sent between our locations. This is especially true for international calls and faxes.Savings will also come from being able to include more remote (at-home, traveling) agents andknowledge workers.

Q: Will the combined effect of increased network efficiency and enhanced product offeringsoffset what undoubtedly will be a considerable capital expense?

The No. 1 driver for building converged networks is the desire to provide unsurpassed customer caresolutions to our clients. We feel that the most efficient use possible must be made of every customercontact. As mentioned earlier, Convergys has already achieved many benefits with our "virtual"approach. We have built CRM applications — on top of our investments in agent expertise.Components include interactive voice response (IVR), CTI, database integration, voice calls andcustomer information routing that allows us to direct the customer contact to the best availableknowledge worker the first time, regardless of location. Some call centers must upgrade PBX hardwareand software to allow IP-enabled traffic fully. However, offsetting costs for adding stations in callcenters and reducing access costs by centralizing services minimize the impact of any capitalexpenditure.



Q: How robust are the Convergys data networks? Can they handle the extra traffic if voicecalls are routed across them?

Our data networks are currently engineered to handle voice, video and fax on top of the normal datatraffic. The Convergys LANs are engineered with 100/1000-MB full duplex ethernet switches from theedge to the core. Desktops are served by dedicated, switched 10/100-MB connections. We recently re-architected our data network to an ATM backbone for our data center facilities and an IP network forour contact centers. The contact centers still use some point-to-point and frame relay but our migrationstrategy is to move to an ATM and IP network and remove most other services. The IP strategy enablesus to easily increase network capacities as required.

Our telecommunication vendors provide dedicated high capacity (T1, DS3, OC-3, and OC-12) accessbetween our customer contact and data centers as well as links to client systems.

Q: Will you be able to build out the network on top of your current switch platforms?

Our current systems come from the leading vendors in the IP space, and our systems are kept oncurrent releases. The vendor solutions enable us to either leverage current investments throughextended IP services from existing platforms or fully implement new platforms using the emergingtechnologies. For instance, both of our major PBX/ACD solutions already allow IP connections and,therefore, provide a built-in migration path.

Q: How will you move toward a fully converged voice and data network?

As mentioned, we have already combined voice and data through our switching gear. This allows manyof the benefits for our customers. For the true "physical" combination, we have multiple deploymentsof IP solutions extended from our PBXs. We have longstanding strategic alliances with a number oftechnology vendors that provide us access to emerging technologies, R&D staffs and pilot programs.We will also continue our review of the emerging technologies from other suppliers as the marketcontinues to advance. We hope to pilot a true IP PBX application in an existing facility or implementan IP PBX infrastructure for an entire new customer contact site in the next year.

Q: What about your interfaces with client networks and systems?

Any converged network solution we build must be powerful and flexible enough to support the manyelectronic connections and interfaces Convergys has with its own application systems, as well as thoseof our clients. Current applications include our billing systems in the wireless, IP and cable/broadbandmarkets, our over 50 contact center customer service and operating systems as well as industry-leadingsales management and CRM applications. These applications are supported on a number ofcomputing platforms.



Q: Do you expect to save on long distance charges?

The primary savings in long distance charges will be those over international links. Because of thecurrent regulatory environment, especially in Europe, traditional switched telephone calls remainsignificantly more expensive than IP protocol-based calls. This is also true for faxes. Domestically, asthe cost of bandwidth and long distance calls continues to decline, fewer savings can be squeezed fromdomestic toll and toll-free calling.

Carriers are also using VoIP techniques to maximize the use of bandwidth. This is one of the reasons(in addition to competition and new high-speed lines) for dramatic decreases in the cost Convergyspays for bandwidth.

Q: What are your video capabilities? Can video be carried over your data (IP) network?

Video calls are carried over the carrier network where we have specially negotiated rates. We are nowusing our corporate WAN for some site-to-site video calls. With the appropriate compression andprioritization techniques, our internal networks (LAN) can support video as well as voice and data.

Q: Vendor solutions for VoIP seem to be in flux. Are enterprise-class systems ready forimplementation?

Enterprise-class VoIP solutions only recently came to market. Case studies and vendor proposals arepart of our ongoing evaluation programs. Vendors are proposing different architectures, sometimesbased on proprietary operating systems, hardware and cabling. These issues will have to be examinedin light of interoperability with current systems. Convergys is in the 24x7 customer care supportbusiness. As such, any new solutions must meet strict standards of reliability, scale and multichannel,multifunction support. Enterprise systems are quickly developing applications to meet these demands.



Q: What is your experience in combining voice calls with customer information andproviding both to customer care agents?

Convergys has been integrating voice and data transactions for our agents for years. The combinationof carrier call information (ANI and DNIS) with our interactive voice response (IVR) and computertelephony integration (CTI) platforms has enabled us to provide agents with caller information uponpresentation of the call. Our implementation of industry-leading IVR applications enable Convergys toprovide "intelligent" data from databases (ours or client’s) to the agent over the data network at thesame time the voice call is routed to the agent over the voice network.

These transactions are currently carried over separate voice and data networks, except in the case of ourextended PBX IP solutions for India and home agents.

Here is a brief description of how this works. The telephone switch routes the incoming call to the IVRsystem and provides information to the CTI server. The IVR interacts with the caller, gatheringinformation, providing information or routing the call to an agent. Upon transfer to an agent, the IVRroutes the call back to the telephone switch and provides data from the call to either the CTI server orapplication server. The PBX routes the call to the appropriate agent and provides call information tothe CTI server. The CTI server links with the appropriate agent desktop and initiates a transaction forthe desktop application to retrieve the appropriate client information. The agent then has the caller’saccount information on the desktop while in voice communication with the caller.

Q: What does network convergence add to the above capability?

Routing both voice and data over the same network would create a competitive advantage in a couple ofareas. Routing as IP transactions enables calls and data to be delivered to any agent on our network.This reduces the complexity of call routing between sites and enables the use of existing infrastructurefor the delivery of both voice and data.

We will benefit from network efficiencies as discussed above. In addition, we will have more flexibilityin determining who participates in the customer care equation. We can route voice and data togetherover the WAN to potentially any Convergys or partner sites. We can also route customer contacts toknowledge workers not located in the contact center, either at home or offshore. In addition, we will beable to deploy enhanced CRM solutions that will help us make the most of each customer contact.

Q: There is a tremendous amount of time investment to understand these technologies andwhat it means to an organization. What advice do you have for a company consideringmajor investments in network and switch infrastructure?

The best advice Convergys can provide is to consider carefully the available alternatives before choosinga solution. Business needs and risk tolerance should be considered when looking at any new emergingcapabilities. It may also be smart to consider outsourcing some or all of its call center and customercare activities. If the company selects a focused, dedicated partner whose full-time job is to understandhow these new technologies can best be deployed for the benefit of its customers, this provides a majortime and cost avoidance. Convergys has several staff members working to evaluate, test and deployvarious components of both the "physical" and "virtual’ converged network. Leveraging Convergys’investments in time and capital can thus free a customer’s dollars to be used for their corecompetencies. Our wish is for Convergys to be viewed as a valued partner in such relationships.


C O N C L U S I O N A N D C O N T A C T I N F O R M A T I O N

The mission of Convergys is to help our clients develop and implement life cycle mangementprograms for their customers. In today’s business world, companies that offer the most competent andconsistent care to customers, suppliers and partners across all business functions and access channelswill have a competitive advantage. Companies that do not manage relationships will lose customers,

market share, and revenue.

Making the most of investments in technology, such as


converged voice and data networks, will facilitate a hostof benefits to all business areas of the enterprise. Everycustomer contact, regardless of channel, is qualifiedbefore reaching a live agent while customer specific datais simultaneously passed along to the agent during thesame call. This integrated approach to customer carewill create business efficiencies and increase customersatisfaction. Convergence of voice and data networks isthe logical next step of the e-business model in theInternet age.

To discuss how Convergys is managing the challengesof converged networks, contact:

I N D U S T R Y A N A L Y S T S T R A D E M E D I A S A L E S A N DM A R K E T I N G

Joe Feldkamp Jeff [email protected] [email protected] [email protected]

+1.513.723.3777 +1.513.723.7153 +1.800.344.3000+1.513.458.1300+44.191.555.7800

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Convergys Corporation (NYSE:CVG), a member of the S&P 500 and the ForbesPlatinum 400, is the global leader in integrated billing and customer care servicesprovided through outsourcing or licensing. Convergys serves top companies intelecommunications, Internet, cable and broadband services, technology, financialservices and other industries in more than 30 countries.

Convergys brings together world-class resources, software and expertise to helpcreate valuable relationships between our clients and their customers. Thiscommitment is validated by the more than 1.2 million separate customer contactsthat Convergys manages each day, both live and via various electronic channels.

Convergys employs over 45,000 people for more than 50 customer contact centersand other offices in the United States, Canada, Latin America, Israel and Europe.On the net at www.convergys.com, Convergys’ world headquarters is located inCincinnati, Ohio, USA.

© 2001 C O N V E R G Y S C O R P O R A T I O N A L L R I G H T S R E S E R V E D

Convergys and the Convergys logo are service marks of Convergys and Geneva is a registered trademark of Convergys. Convergys refers to ConvergysCorporation or any of its wholly owned subsidiaries. All other trademarks are the property of their respective owners. Every effort has been made toensure that the information obtained in this document is true and correct at the time of publication. However, because the information containedherein was obtained from various sources, Convergys does not warrant that this document is a complete or error free and expressly disclaims allwarranties, including but not limited to warranties of merchantability or fitness for a particular purpose. Convergys cannot accept liability for any loss ordamage of any nature whatsoever arising or resulting from the use of or reliance on information contained herein.

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convergys corporation (nyse:cvg), a member of the s&p 500 and

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