Manchester Unity surfs insourcing, VoIP trends

The chief information officer (CIO) of health benefits provider Manchester Unity is riding the wave of two of the most prominent enterprise ICT trends in 2005 -- insourcing and Voice over Internet Protocol (VoIP). David Musgrave told ZDNet Australia today that the projects -- which included "buying back" a 60-seat call centre from a third-party outsourcer he declined to name, as well as a comprehensive network upgrade -- had left him in need of a holiday.

The chief information officer (CIO) of health benefits provider Manchester Unity is riding the wave of two of the most prominent enterprise ICT trends in 2005 -- insourcing and Voice over Internet Protocol (VoIP).

David Musgrave told ZDNet Australia today that the projects -- which included "buying back" a 60-seat call centre from a third-party outsourcer he declined to name, as well as a comprehensive network upgrade -- had left him in need of a holiday.

"We've had a huge year -- I want a break!" he said.

Musgrave said Manchester Unity had now integrated the call centre with its existing VoIP platform and developed a new Web front end for its customer relationship management system.

The CIO's projects are designed to revitalise information technology across the organisation, which boasts a health fund with 145,000 members, 400-plus residents in its retirement and aged care facilities and financial solutions for an additional 8,000 members.

"In health insurance, the real important thing is customer service," he said. "And it's a real complex customer service thing, it's not something where you can just have someone answering a question… you've got to sell the concept of security.

Musgrave's comments follow indications by the CIOs of both Coca-Cola Amatil and the Nine Network that high costs can be a problem when it comes to outsourcing ICT services.

"I maintain the view that insourcing remains a very competitive option that can lead to substantial savings when managed appropriately," said Nine's Keith Roscarel last month.

"That's my position as well," Musgrave said. "But it probably varies from situation to situation in terms of the magnitude of the cost."

Manchester Unity is also shifting its voice requirements from a traditional analogue solution -- provided by Alcatel -- to a VoIP alternative from the same vendor. The first 110 staff were shifted onto VoIP as the company moved head offices to the Forum West building in St Leonards earlier this year, but additional sites are planned in the new year.

The next phase of the rollout, he said, was to Manchester Unity's retirement and aged care facilities, which is scheduled for the first half of next year: "I was fairly certain VoIP was the way to go, because we knew we had to get a new PABX. And I thought, I'm not going to buy an analogue PABX, and I'm not going to buy a hybrid, I'm going to buy an all-out IP-enabled PABX," he said.

Musgrave said the installation of high-quality network hardware at the new premises also prompted the shift to VoIP functionality: "The other thing in our favour was that our network hardware at our old site was just crap… it was one of those networks that just got added to over years and years."

"I looked at the prices, and there was no real difference. The handsets are a bit more expensive, but I mean we weren't bringing handsets with us either -- it was a real greenfields," he said.

Other contributing factors to the business case included potential cost benefits such as being able to distribute in-bound calls between internal company sites, although Musgrave noted he had not seen much in the way of savings yet.

"I guess I'm more concerned that we've laid a platform for future savings, when we start doing more rollout either across the WAN, or as the business grows with additional sites," he said.

Hawking their wares
Musgrave said the only VoIP hardware vendor he had seriously considered other than Alcatel was NEC.

"I felt that they [NEC] had the more flexible solution for true VoIP... but I think ultimately price let them down, and also the fact that distribution of calls across our Wide Area Network (WAN) was more of a nice-to-have, rather than a strong business driver," he said.

"I guess the advantage Alcatel had was being the incumbent provider with a good reputation, and I had a lot of confidence in them. NEC was slightly more expensive," said Musgrave.

Musgrave explained that other vendors lost out for various reasons: "Cisco was far too expensive… also the problem with Cisco was that integrating a call centre solution with it was going to be difficult".

"Siemens didn't really have a strong VoIP offering. They had a good traditional PABX, but I wasn't impressed with its capabilities… I wasn't interested in Avaya or Nortel -- I just didn't really consider them," said Musgrave.

He also briefly considered some of the "boutique" suppliers such as Zultys: "but I just thought they were too small, and I didn't know if they would be here in 10 years."

However, while Cisco missed out on supplying the VoIP gear, it won the deal to supply a new network infrastructure.

"We had some very compelling offers to go with Alcatel but I thought Cisco was the best solution… I did consider HP Procurve, because they were cheaper, but I really felt that Cisco had the maturity in the market. And I felt that it was the stronger solution for VoIP," said Musgrave.

Musgrave concluded that the only way to take VoIP straight to management was if the opportunity was laid out -- as in a greenfields case -- or if a company made a lot of internal calls between sites.

"If half of your spend on telephony is site to site, then going VoIP is a no-brainer," he added.

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