Is 2003 the Year of Convergence?
By Jason Moody and Simon Cornwell
October 8, 2003

Summary: For financial institutions, the intelligent combination of IT and telecom systems is an opportunity for technology to provide real competitive advantage. By Jason Moody and Simon Cornwell.

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The first few years of this century have seen technology get an increasing foothold in company boardrooms. We are all aware of the need to look at the business strategy behind an IT project, but are we really taking the necessary holistic approach to integrating IT and telecom needs? The ability to take the high view and combine networking, security and telephony requirements will become critical to business success over the next year.

The integration of voice and data services is already a hot subject. Indeed, Gartner predicted that firms would begin the migration from circuit-based phone systems to digital voice and data infrastructures between 2003 and 2005 and we are already seeing this happen. Frost & Sullivan also picked up on the trend, indicating that the increasing number of firms using voice over IP (VoIP) technology means 75 percent of all voice traffic will travel over IP-based data networks rather than analogue phone infrastructure by 2007.

For financial institutions in particular, the intelligent combination of IT and telecom systems is an opportunity for technology to provide real competitive advantage. It is also rapidly becoming apparent that the widespread use of a common telecom infrastructure, including all services, can radically alter the way companies do business.

Despite many companies' reticence to deploy apparently 'new' technologies, voice, in particular, can now be simply offered as another application in operation across the corporate environment, and as such can be delivered both effectively and securely. Financial businesses and affiliated bodies are regarding VoIP as a realistic and tangible business benefit rather than a gimmicky set of products being promoted by technology providers. Once cutting edge stuff, this is now mainstream technology.

What has changed to make 2003 the year of convergence? In brief, VoIP integrations can now provide centrally managed quality of service (QoS) enabled infrastructure, which delivers highly secure IP telephony services. QoS can now be achieved within both the local area network (LAN) and wide area network (WAN), and mission critical voice and video can be delivered alongside data throughout the converged network with no degradation in quality.

This is already giving businesses a distinct edge over more traditional PBX solutions by bringing true unification of voice and data services one step closer.

The main arguments for VoIP in financial institutions include:

* Scalability - it is possible to implement and see the benefits of VoIP in small and large organizations, and it can grow with the business.

* Cost efficiencies - in use of time, in avoidance of call charges, and in staff costs.

* Advanced applications and open standards - as well as offering cost savings, VoIP also allows companies increased functionality.

* Resilience - operates independently and mutually.

* Speed - efficient and secure transfers.