BT Ireland's survey finds many companies are not making the most of convergence, writes John Collins.

Compared to the heady days of the late 1990s when investment in technology was at an all-time high, things are very different for most corporate technology managers. Big budgets are no longer signed off with the same careless abandon that they were as the dreaded Millennium Bug bore down. Senior managers are now looking for a demonstrable return on their technology investments and, far from loosening the purse strings, most IT managers now say they are faced with the problem of doing more with the same or smaller budgets.

Hardly a coincidence then that some of the main technology trends that vendors have been pushing in the past few years - consolidation, virtualisation and convergence - are all ways to sweat more out of existing technology investments.

The term heard most in Irish tech circles is convergence. It broadly means bringing two or more services that previously ran on different networks on to a single one.

Although the big vendors have been talking about the benefits of convergence since the late 1990s, it is only in the past couple of years that technologies such as Voice over IP (VoIP), multimedia contact centres and virtualisation have begun to go mainstream here. As BT Ireland makes the move from being a pure telco to having an IT services focus, it has been heavily involved in a number of high profile convergence projects.

As part of this, it sponsored research by IDC that took the views of 176 managers with responsibility for IT at large firms in Ireland during September and October. The research threw up some interesting results; in a nutshell the market could be considered fairly immature but, despite this, almost a third of firms have implemented IP telephony, the most popular convergence technology according to the survey.

The survey also found that, far from embracing new technology for the advantages that it could bring their firms, 60 per cent of respondents said reducing costs was the main driver of convergence in their organisation. Just 5 per cent cited the features of the new technology - behind even the need to replace existing analogue or older technology phone systems (11 per cent).

Tom Carson, managing director of BT Ireland's networked IT services division, says the survey shows that most firms are looking at convergence from a "tactical and purely cost-cutting view" and are not getting the full benefits of the approach.

Convergence technologies such as IP telephony make the provision of home or remote working for staff much easier, can enable multichannel communications with customers and significantly reduce network management costs.

"One would like to think that organisations were going down this path with more intangible benefits in mind, such as increasing customer satisfaction or improving manageability of their networks," says Carson. "The technology is just an enabler.

"It's how you adopt the new functionality and embed it into your work practices that drives the less obvious benefits."

Carson believes some IT managers could be disadvantaging themselves by selling the cost-cutting benefits to the board for initial convergence projects that simply cut telecoms costs. When those executives then seek a further investment that will deliver more intangible benefits, their fellow executives may be less keen to sign off their budgets.

Carson also suggests that convergence is much wider than simply running voice and data applications on a single network. He believes companies need to think about how their local and wide area networks can be converged, as well as those of their fixed and mobile communications, applications and network services. He even says it can be applied to converging - ie reducing the number - of suppliers companies deal with.

One of the anomalies of the research is that, even though cost-cutting is cited as one of the main drivers, 36 per cent could not quantify the cost reductions they achieved. John Gilsenan, the IDC consultant who wrote the report, suggests that this figure may be high because many firms are still at the pilot phase.

The BT customer that Carson holds up as an example of a company that draws on the potential of convergence is not some high-tech young company but Cork County Council.

Having added to its phone and network systems, it was in a situation where it had a multitude of different technologies and suppliers, which meant management was costly. It went to BT for a single flexible platform that could handle voice service at up to 100 locations around the county and also support a contact centre running a customer relationship management (CRM) system.

BT installed the Cisco IP telephony system and upgraded the council's local area network infrastructure. The multimedia capabilities of the contact centre means it can now deal with queries from the public using a variety of communications channels including phone, e-mail, fax, web and SMS.

As a result, the council says productivity has increased and 89 per cent of enquiries are successfully dealt with first time. Because inter-site calls now go over Cork County Council's own network, costs have been significantly reduced and it expects the investment to pay for itself in three years.

With BT's competitors in this space also touting success stories from their customers, it would suggest that something is holding back Irish firms' adoption. The IDC report suggests the main factors are initial set-up costs (45 per cent), no in-house skills in the area (21 per cent) and no need to upgrade their existing phone system (10 per cent).

"There is a set-up cost but there is a quick return on investment," says Carson. "I think the lack of in-house expertise is a more notable statistic."

This lack of in-house expertise and knowledge of the technologies may help explain one of the main conclusions of the report - that there is "little evidence that Irish organisations are looking at convergence as a means of using their network to transform their organisation".

With productivity and international competitiveness now firmly on the Irish economic agenda, Irish firms will clearly need to upgrade their skills.

"Convergence as a driver of productivity and efficiency is becoming less of an option but rather a business necessity," says Carson.