Information Age (IA):> Although voice over IP (VoIP) has been in existence for almost a decade, the technology has been plagued with a series of false starts and adoption has been sporadic. In light of its chequered history, what spurred the decision to install a VoIP system at Lloyd's?
Chris Rawson (CR): At the time we started looking at voice over IP (VoIP) in late 2001, we were in the process of moving offices so there was going to be a cost involved anyway. Our existing telephone outsourcing contract with BT was up for review, so we started to explore the option of VoIP. We asked BT for their advice as to what we might do differently [with our telephony systems] and we both felt Cisco to be a global leader in the technology at the time. BT helped us to design and define a solution to introduce VoIP telephony using the Cisco product set.
IP telephony has been around for seven or eight years as a technology but it's only really recently that it's come up as an industrial-strength proposition. A number of financial services organisations that had already deployed the technology prompted our interest. When we implemented it we were the largest financial services organisation to adopt it.
It was really the financial case for VoIP that was very strong, and far outweighed the financial arguments of the other two [a conventional PBX-based telephone service in-house, or continuing the outsourced telephone service with BT]. The cost of VoIP to Lloyd's was £1.4 million, and the net benefit over four years is projected to be £4 million to both Lloyd's and our market customers. So it stacked up very strongly as a financial proposition. We would have gained very little in savings from the other [options we looked at] – but of course we had to look at the technology itself to ensure it was industrial strength. Without doubt, it's leading-edge technology. It's perhaps unusual for a traditional institution like Lloyd's to invest in leading-edge technology.
IA: How does VoIP differ from a conventional phone system on a day-to-day basis, and how did staff at Lloyd's react to the cultural change?
CR: We've tried to replicate the functionality that was already enjoyed under the previous set-up. To start with, we were expecting employees to get used to the look and feel of the new phones, so to have introduced too many of the potential IP integration functions from the outset would have been a mistake. First we wanted to get the infrastructure in place, fully working to previous service levels. Then our plan was to introduce some of the more advanced IP integration features.
In terms of training, I believe you can never give enough. When we implemented we had 'floorwalkers' – all the people associated with the project toured the buildings and were on hand to help out, which helped us a lot in terms of credibility. A lot of concerns were around usability. People asked questions such as 'How do I pick up that phone over there if it rings?'. It was really a matter of helping people understand how the new phones worked.
IA: What additional facilities do you use that you would not have had with a conventional phone system?
CR: At the outset we integrated the telephone with the desktop, so if you receive a voicemail, it appears as a sound attachment in your email. You simply click on that attachment and it plays back your voicemail through your PC. We have a link to a central directory of names and numbers that sits in a huge database behind it. It's quite interesting to think of your telephone as part of your PC rather than as a discrete technology.
In theory, you could do away with the phone altogether. But we haven't used the softphone [where the user accesses telephony services through a microphone in their PC] because we didn't want to introduce a lot of new technology and a lot of new ways of working immediately. We'll pace that over time. In the future, for example, employees will be able to phone up the office while they're off site to access their diary and appointments using a text to voice facility. We haven't introduced it yet but it's something we're considering.
What we're tending to do is look at each functional development and assess it in its own right. Are there material or operational benefits to doing it or not? If there are, we can pursue those. There's less pressure now to introduce new technology than there was when we first installed the system, because at the time, we were under pressure to get it up and running. Now we can tie further functionality to a business case.
IA: The whole project cost you £1.4 million – a considerable investment. How did you prove the business case and who was ultimately responsible for signing off the investment?
CR: We had to prove the business case to our executive committee. It was thought through very carefully. We looked at the technology, the financial side of things, the operational risks of the project, the cost of change. This was all put to our executive committee, which was unanimous in its support.
IA: Many organisations have been reluctant to adopt VoIP because they feel it's an unproven technology. Did your technology suppliers come up with any case histories or reference sites?
CR: Both BT and Cisco provided us with household names – I can't tell you who they are, but we certainly followed up on those references.
IA: Did you encounter any of the quality of service issues that have been associated with VoIP in the past, such as network congestion or lost voice packets? If so, how did you overcome them?
CR: When you adopt a leading-edge technology, there will always be teething troubles. So initially, yes, there were some quality of service issues, but in all cases they simply required some tuning of the technology, or some configuration changes. They were resolvable. Because Lloyd's is a market with a wide and complex telephony infrastructure it meant that, while we'd designed it as robustly as we could, there were some areas that we had difficulty with initially. The issue for us was managing such problems as they occurred and having a rapid response team in place to handle that process. So, for example, we had a few problems with sound quality to begin with, but that was simply a matter of changing the parameters in the network.
We spent a lot of time initially on the design to make it resilient, fault tolerant and not to implement it in a 'big bang', but in an incremental way. We implemented it in our Chatham office first, and then gradually brought other parts of Lloyd's on as and when we'd teased out any teething troubles and identified any faults. The whole project took two months to roll out to Lloyd's and its market customers and it's now running to normal service levels.
IA: How has moving to the VoIP system affected your use of IT resources at Lloyd's?
CR: The VoIP system is run on a separate virtual local area network, or VLAN, so it sits on the same Ethernet backbone but is configured separately. Because we're using a single network now for voice and data that's actually helped a lot. There's an operational benefit to us because we don't have to manage a second network any more. It means we don't need such a diverse set of skills on the network side, we're able to manage it quite happily with the same staff levels that we had prior to the implementation, so there's been no additional staffing cost internally.
One of the only drawbacks we've had is that we centrally manage the system at the moment, so if you want to change your group pick-up extensions, for example, that has to be done through a central helpdesk. What we'd like to do is delegate authority to different business areas to enable them to manage their own administration. We need someone qualified in using the VOIP system in each department or customer facility so that they can deal with any day-to-day changes themselves. For example, if a new member of staff arrives and they need an extension number and a directory entry, that could be managed locally rather than having to come through the central helpdesk.
IA: You've talked a great deal about delivering return on investment and proving the business case. What about the soft benefits of using VoIP in your organisation?
CR: The technology provides a lot of different benefits for different parts of our company and our customer base. One of our big customers, for example, has been experimenting with hotdesking. Because the phone is integrated with the desktop, this enables the staff to [sit at any desk] with very little notice and their desktop profile is moved to wherever they're sitting that day. It's all configurable through the office environment. It's very slick.
Most importantly, the staff like the phones. There's been a lot of very good feedback from people who are very keen now to start looking at what it can do.