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A powerful voice: insurers are discovering cost savings and increased functionality from Voice over Internet Protocol service.

Voice over Internet Protocol service or VoIP continues to ramp up quickly in both the consumer and business worlds. The business VoIP market is expected to leap to almost $3.3 billion by 2010, from $840 million by the end of 2005, according to a recent report released by information technology and market research advisory firm Yankee Group.

While this growth is phenomenal, what makes it even more interesting is the perception in some technology circles that compatibility issues between VoIP vendors have supposedly slowed growth.

For those unfamiliar with the technology, VoIP is, in more common terms, telephone service over the Internet. If you have a reasonable-quality Internet connection at home, phone service delivered through your Internet connection becomes a viable option.

In terms of business use, key VoIP drivers fall into two major buckets--cost savings and increased functionality--when compared to more traditional telephone systems. From a cost perspective, savings result from decreasing long-distance charges domestically and internationally, and combining voice and data network infrastructure.

More importantly to businesses is the increased functionality resulting from VoIP implementations. Examples include the flexibility of employees being able to work from anywhere with a good Internet connection, giving them data connectivity and, more importantly, full phone connectivity.

In an extreme situation such as a natural disaster, a VoIP solution can help ease disaster management of internal systems by IT staff or provide a viable "just-in-time" call center option. In this scenario, additional agents can immediately join the insurer's call-center agent pool, whether the pool is insourced or outsourced, to handle the uptick in associated claims activity.

The value proposition using this just-in-time model for VoIP is not limited to disaster activity. For example, if an insurance marketing campaign is launched and becomes more successful than originally planned, adding just-in-time staff to support campaign-related inquiries can yield improved customer satisfaction and additional revenue.

As VoIP continues to mature from both a technology and insurance industry adoption perspective, business benefits also will mature beyond the basic aspect of having incoming phone calls automatically routed to an individual VoIP phone, wherever it gets plugged into the network.

Examples of this VoIP application maturation exist in collaboration products integrated with industry-leading e-mail platforms, including Microsoft Exchange and IBM Lotus Notes. Switzerland's iscoord created is-phone, a "soft phone" (a PC with VoIP software used as a phone) for Notes and its sister instant messaging product, IBM Lotus Sametime. In addition to providing a single, integrated "phone book," (combining Notes contact record and Sametime IM addresses) functionality within is-phone includes voice recording and storage on demand. Another example of a VoIP application is using that same VoIP network not only for voice and data, but also for faxing, using standards for Fax over IP.

While the largest, global insurers are well along the VoIP path, other insurers, both midsize and small, are also experiencing VoIP benefits. As insurers such as Axa and EMC Insurance Cos. continue to experience success with Vole, it's important for insurance business executives to understand the potential impact of VoIP on their companies today.

Gates Ouimette is a Best's Review columnist from Massachusetts. He can be reached at
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Title Annotation:Technology: Technology Insight
Author:Ouimette, Gates
Publication:Best's Review
Date:Jun 1, 2007
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