Strategic management using VoIP technology: A case study In a call center company

Abstract

The ability of voice transmission over TCP/IP package, also called Voice over IP or VoIP, allows voice integration and data in just one structure; this enables a very cheap communication among remote locations. The main goal of this article is to analyze and demonstrate VOIP applications in the corporate market networks, their advantages and applications on the feasibility of tooling use in the corporate world. The method applied in this article is qualitative, semi-structured as a unique case study. The studied company is called KONTAK, a Brazilian organization of the call center segment located in the east region of "São Paulo". Intrinsic to the business, the major operation costs are related to telephony management. The results show a reduction in the calling costs among branches, customers and suppliers obtained after the implementation of this technology, as well as a better control of operational processes and organization management strategy in terms of the voice and data technology management. The business feasibility is evidenced by the return on investment (ROI) reached by the company due to this technology.

Full text

Strategic Management Using VoIP Technology: a Case Study
in a Call Center Company
MARCELO E. FERNANDES, CARLOS R. C. LIMA,
Production Engineering Graduate Program
UNIMEP - Methodist University of Piracicaba
1Rod. Santa Bárbara - Iracemápolis, Km 1- Santa Bárbara d'Oeste, SP
JULIANO SCHIMIGUEL2
UNICSUL - Cruzeiro do Sul University
Rua Galvão Bueno, 868 - Liberdade -São Paulo - SP
BRAZIL
crclima@unimep.br http://www.unimep.br
Abstract: - The ability of voice transmission over TCP/IP package, also called Voice over IP or VoIP, allows
voice integration and data in just one structure; this enables a very cheap communication among remote
locations. The main goal of this article is to analyze and demonstrate VOIP applications in the corporate market
networks, their advantages and applications on the feasibility of tooling use in the corporate world. The method
applied in this article is qualitative, semi-structured as a unique case study. The studied company is called
KONTAK, a Brazilian organization of the call center segment located in the east region of “São Paulo”.
Intrinsic to the business, the major operation costs are related to telephony management. The results show a
reduction in the calling costs among branches, customers and suppliers obtained after the implementation of
this technology, as well as a better control of operational processes and organization management strategy in
terms of the voice and data technology management. The business feasibility is evidenced by the return on
investment (ROI) reached by the company due to this technology.
Key-Words: Voice over IP, Connection, Protocol, Transmission, Telephony
1 Introduction
The main limitation of the traditional telephone
traffic systems is perhaps just their inadequacy to
data transmission. The data communication
increased so much, becoming representative of the
"Information Era" and being led by the Internet
growth, eventually surpassing the traditional voice
traffic in volume.
Despite there is a number of strengths - as
established standardization, transparency on
interoperability among their elements of
hardware/software, capillarity, stability and
acceptance – there is no doubt that PSTN (Public
Switched Telephone Network) and its distinctive
technology and circuit’s commutation, was not
designed to transport data effectively.
While voice traffic is considered more
predictable and stable with an average calling of 3
to 4 minutes, data traffic is unpredictable and occurs
like bursts, having average callings of more than 4
minutes [1].
The circuit’s commutation is based on the
bandwidth reserved by the calling duration (64
kbps). This shows advantages and disadvantages: if
by one hand it improves the quality of telephone
interactions. On the other hand it represents a waste
of network resources – because this bandwidth
remains reserved during all the calling in course.
In contrast, a network of data package
transmission permits the optimized use of the
available bandwidth (through facilities such as
statistical multiplexing, for example), making
possible a higher utilization degree of the network
assets without compromising the voice traffic
signals enveloped in data packets.
The ability for make callings trough the Internet
has been demonstrated and commercialized since
1995. However, supplying this kind of service with
quality and satisfying the needs of customers it is
another matter.
In order to implement the system of voice
packets, it must satisfy the same customer
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expectations that public telephone system has been
doing for decades [2].
The general objective of this paper is to evaluate
how much economic value the technology or VoIP
solution aggregates regarding to the company voice
transmission. The specific goal is to evaluate how
much VoIP technology can reduce the spent on
communication among sites and staff aiming the
zero cost.
The study contributes filling a gap in the related
literature since it shows a real solution using VoIP
technology applied to a relevant communication
problem in a multinational company.
The methodology used in this research is based
on the collection of semi-structured quantitative data
from a case study that is supposed to provide
sustainability to data collection [3]. Results
generated were compared and analyzed in order to
direct the best way to extract the information as well
as the method for in situ development
2 Basic Concepts of VoIP technology
The voice is an analogical signal produced by the
vibration of an acoustic tube with 17 cm in length,
called vocalic channel or device. It starts into glottis
and finishes on the lips.
When one desires to transmit voice through a
telephone net he has to change it into an electrical
signal, also analogical. In conventional telephony
this function is performed by the receiver device.
But if one uses conventional telephone and wants to
transmit voice through a computer network, that has
a digital transmission, then it is necessary firstly to
change it into a digital signal.
Voice over Internet Protocol (VoIP) is a
technology that enables to make callings and to send
faxes over an IP data network, like if using a
Conventional Public Telephone Network (CPTN)
[4].
The IP telephony is defined by the concept of
using an IP network to the transport of
telecommunication services. It is still a world away
to the incumbents who have invested billions of
dollars in traditional networks and do not think
about changing them into IP until such investments
are fully amortized.
However, all those have already joined the Voice
over IP based on Frame Relay or ATM®, and they
say that this is a definitive trend that tends to
systematically offer new applications to the market
– like a product (IP PBX, for example) or like
solutions adding value to the business [5, 6, 7].
With these new applications, they hope to
compensate the loss of income when a corporate
customer chooses VoIP services instead of the voice
over circuit. "It's inevitable: VoIP takes part of the
income and adds in data, but it doesn’t compensate
the loss of income with traditional voice. The value
added is the solution to the telecom companies. It is
necessary to put more applications over IP",
resumes Minoli [6].
When it is treated about VoIP, the service is
related to the loss by concessionaire, because it
changes the telephone traffic, especially long
distances (considerable income), on internal traffic
of data network, which it is not paid in the same
way.
"The question of loss has to be relativized,
because the customer who uses VoIP has to pay the
good quality link connection, so there is a
redirection of this income to other services," ponder
Koodli and Perkins [8].
According to Gross [9], "In the future this gain
will be in applications". Talking on phone will
become commodity (goods) and it will get money
who offers the transport of VoIP with quality and
value-added applications, such as IP PBX.
There is a big interest from companies by IP
services and in the future two interfaces will
dominate: the voice and a browser software that lets
to navigate in Web or sites FTP. Therefore,
everything will be through Internet or a voice
portal", complete Koodli and Perkins [8]. According
to the authors, since 2000, Embratel’s customers
traffic voice over Internet.
3 Case Study
In the end of January 2007, Kontak, a travelling
company which is part of L’Alianxa Travel
Network®, a Latin American group which operates
in the tourism sector in several countries including
the oriental market, has contacted the company
Digiserver.
Digiserver is a company specialized in providing
solutions for Voice and Data which operates into
telecommunications market in São Paulo, Brazil.
Kontak was looking for solutions which could save
money on voice transmission. The authors of this
paper have worked as consultants for Digiserver in
this project. Then, it was possible to focus the work
in both practical and academic investigation way,
looking for the investigation as a case study with
participant intervention.
As Kontak possesses sites in different sites like
Tokyo (Japan), São Paulo (Brazil) and Buenos Aires
(Argentine) and two offices in Campinas (Brazil)
and Osaka (Japan), the amounts spent on callings
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among sites represented a significant loss in the
income of the company.
3.1 Data collection and information
before VoIP technology implementation
To start the project, it was firstly necessary to get
information and data from the customer. The
procedures used were in general meetings,
conferences and documentation requested.
The first step was to understand how it ran or
how it was established the company's
communication with remote sites, employees,
customers and suppliers. This information was
obtained through a general meeting with managers.
In this meeting, the communication process among
sites was understood.
As shown in Figure 1 all links among sites were
received and sourced (bi-directional) through digital
lines (link E1) provided by phone operator. Since all
remote sites are located outside of the São Paulo
city, all calls were billed as DDD.
Fig. 1 Communication among sites “before” VoIP implementation
The communication among external and internal
employees was established through cellular phones
and interfaces. As shown in Figure 2, due to a
corporate plan of a service operator (Claro), the
taxes among cell phones were much lower
compared to other operators, but still significant.
For communicating with customers and
suppliers, the users used a digital link E1 (fixed
numbers) from the central and cellular interfaces
(mobile numbers), as shown in Figure 3
In the meeting, the customer also commented
about customer Call Centers in Campinas and
Buenos Aires sites that were deactivated due to the
high costs.
The São Paulo site was the only one, which had a
customer service group. As shown in Figure 4 each
site possessed a structure of local service or
customer service group.
It was explained to the customer the need for a
VoIP dedicated link in each site. An IT Company
team informed about the structure of existing data.
The customer already possessed an MPLS data
network connecting all the sites.
After understanding all Kontak communication
process among remote sites it was asked a document
containing tax information.
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Fig. 2 Communication between employees "before" VoIP implementation
Fig. 3 Communication among customers “before” VoIP implementation
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3.2 Data analysis and information during
VoIP technology implementation
After taking the document which contained the
company calling data with taxed value, all callings
among sites were analyzed with their worth.
Table 1 was generated through data got during
the meeting which shows the worth spent on linking
among sites. It was also analyzed the callings of
internal employees to external staff.
After filtering and getting the data analysis it was
generated a document to be delivered and presented
to the customer at the next meeting. In that meeting
the amounts spent (simulation) after installation and
activation of all system were discussed.
As the customer already possessed a network of
interconnected data, and the voice’s packets traffic
has no cost, the system would be paid in two
months.
Table 1 Worth spent in callings “Kontak” [10]
Type of
callings
Worth spent
per month (R$)
Worth spent
annually (R$)
Callings among
sites 50.0000 600.0000
Callings among
employees 10.0000 120.0000
Fig. 4 Distribution of callings among sites “before” VOIP implementation
To provide a complete solution to Kontak’s
customer it is also presented a solution in
partnership with Voitel Operator which focus on
callings cost reduction to the customers and users
who do not possess equipment or Voice over IP
technology. Table 2 compares telephone taxes that
were presented to the Kontak’s customer during the
meeting. The customer showed a great interest by
the Voice over IP (VoIP) and its applications at the
end of the meeting.
Table 2 Comparison of worth Voitel-Telefônica [11]
Types and
callings package
Voitel Telefônica
Consume of
2.000 min
(fixed)
R$ 610 R$ 630
From local to
fixed numbers R$ 0.12 R$ 0.14
Distance Direct
Dialing (fixed) R$ 0.31 R$ 0.43
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4 Applications of VoIP solution
In the study, the various solutions and applications
used in the project which focus on the widespread
use of VoIP solution will be treated. The positive
results obtained from these implementations
especially related to cost savings and flexibility in
callings among sites will be shown. This study also
reviews the parameters that seek to respond to the
variables linked to the management of the
operational costs. Additionally it helps in the
understanding of the attributes that influence the
mechanisms considered critical in the architecture of
computer and telecommunication systems, serving
as a model to companies that wish to deploy similar
technology.
4.1 Communication among sites
Voice over IP equipment was installed in each one
of the remote networks to provide communication
and to make available callings among sites. As
shown in Figure 5 there are three different models
of equipment installed in the site of São Paulo.
The equipment XT-200 is a private center of
telephonic commutation with technology CPA-T
(Control by Archived Software - Temporal
Commutation) relocated in the project as a Kontak’s
legacy. In this equipment there is a group of Call
Center of Customer Service.
The equipment XIP-270 IP is a Hybrid central
which provides all Kontak extensions in São Paulo
with the exception of the Call Center extensions
(which are provided by antique XT-200) and
interconnection with the PSTN net (E1 Link from
Telefônica operator).
The third equipment on the site of São Paulo is a
device that performs protocol commutations among
telecommunication networks using standard
analogical (FXS and FXO), digital (E1 CAS R2)
and converged systems (Voice over IP) called
Media Gateway.
There is a central XT-130 on the Campinas
office, a central private of telephonic commutation
fully digital, which provides extensions to the office
and interconnection to the PSTN network (E1 Link
operator Telefônica) in the region. In the same
office there is a gateway D'Link 8 - port FXO. An
XIP-270 IP equipment is located in the site of
Buenos Aires. This device also provides extensions
to Buenos Aires as well as communication with the
PSTN telephone network in the region.
There is a VoIP gateway D'Link® 8-port in Tokyo,
but in this site the ports are FXS which are
connected in the PanasonicTD-500 trunk in Tokyo.
The Osaka office installed a device IP KT-200B.
This device is a Pure IP device connected to a
network point in Osaka. All sites are communicated
over VoIP in the SIP protocol.
Fig. 5 Communication among sites
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4.2 Communication among distributed
extension (Extension IP)
The Kontak customer has representatives working
outside visiting customers and suppliers in two sites:
São Paulo and Buenos Aires. For these
representatives distributed extensions were created,
i.e., IP extensions.
These extensions were created and habilitated on
XIP-270IP equipment. As shown in Figure 6, this
equipment will make the role of a SIP server where
all representatives will register using a softphone
installed on Notebook (with 3G modem for Internet
access) or devices that can support this technology
(such as Smartphones).
Through these distributed extensions the
representatives can make callings and receive them
as an analogical extension.
He can call other company’s extensions where it
is registered and also to call extensions of other sites
(thanks to the Media Gateway). Another advantage
of using IP extensions is the perspective or
possibility of generating connections by public
telephone (PSTN) connected to the central XIP-
270IP.
4.3 Distribution of calls among sites
As mentioned before, the central of customer
service (Call Center) and ticket sales are located on
the site of São Paulo. In São Paulo the callings came
through the public telephone network or PSTN
network through E1 link provided by “Telefônica”
operator.
Fig. 6 Communication among distributed extensions
On the site of Campinas all incoming callings
from public telephone network through the E1
digital link (the central XT-130) the number or trunk
key released for customer service are addressed to
one of the 8 extensions free connected to the
gateway D'Link.
When the calling reaches the gateway D'link the
same address these callings to the Media Gateway
which analyses the routes and dialing plans created
and redirects callings to the central XT-200 which is
connected through an interface G.703 in Media
Gateway.
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The equipment XIP-270 possesses a digital
message service called DISA (Direct Inward System
Access) in the site of Buenos Aires. In this DISA
message customer can digit 6 options. When
customers digit option 1 or 2 in the DISA message
the equipment directs this calling to the Media
Gateway via VoIP.
The Media Gateway equipment will examine the
routing tables and dialing plans and will redirect the
calling to the Call Center Service. It follows the
detailed structure shown in Figure 7.
4.4 Communication through an operator
VoIP
In the sites of São Paulo and Buenos Aires all DDD
or IDD callings made to fixed numbers (PSTN
network) use a preferred route provided by Voitel
Operator.
Looking at Figure 8, after the registration of the
XIP-270IP equipment on the operator platform, all
DDD and IDD callings to fixed numbers are
addressed via VoIP to the platform of Voitel
Operator and redirected via VoIP to the region or
state of destination.
Fig. 7 Callings Distribution among sites
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Fig 8. Communication through Operator VoIP
5 Conclusion
The VoIP technology is showed as an attractive
alternative for voice transmission, mainly to
companies and SOHO (Small Office - Home Office)
that already have one or more networks installed
and can use the existing infrastructure or to those
ones which have subsidiaries in other countries and
cities.
The contributing factor of this work is based on
its practical relevancy since this research has
allowed to the studied company greater control in
the management of calling costs among sites as well
as innovation on the use of VoIP technology in the
studied segment in Brazil.
Results of this study can be viewed by two
distinct ways: i) quantitative, when presenting
financial economy with the implementation of VoIP
technology, for the number of new businesses and
chances that could be generated in the organization
call center and for the technical detailing in the
technological architecture of the VoIP; ii)
qualitative, allowing a work of strategic mapping of
the calling costs with the information generated by
the implementation of the new technology in the
studied organization.
As shown in the Kontak case, the cutback is
evident and proportional to the need of public
telephony utilization. The worth spent in callings
among sites were about six hundred thousand
“reais” annually. The worth spent in cellular phone
calling were around one hundred and twenty
thousand “reais” annually.
The reduction of the importance spent after
installation and activation of the entire system is
evident and it is proportional to the need for public
telephony utilization. It was detected that there was
a significant decrease in the values spent on local
and long distance callings.
As the customer already possessed a data
network interconnected and the voice packet traffic
has no cost, the system would be paid in two
months. With improvement of technology and new
techniques and algorithms a voice quality
comparable to that offered by public telephony
operators can be obtained.
The differential of this study related to similar
works is that this it not only deals with the
application and the architecture of VoIP technology
in the management of a call center organization but
it also strengths the financial viability of the
business for that segment.
Today the Voice over IP is no longer restricted to
point-to-point telecommunication. Recently there
were several operators providing voice services over
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IP. Since the most part of the voice path of these
carriers is the TCP/IP, the rates charged are lower
compared to the conventional telephone operators. It
is unlikely that the technology of voice over IP
causes the end of conventional telephony in
corporate environments but certainly it will be
responsible for a significant portion of long distance
and international calls.
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