The system, in principle, is simple. Replace the desktop phones with devices that digitise voice and connect to the LAN with their own IP addresses. Calls between these IP phones happen by interchanging packets of data; calls to and from the public phone system go through a gateway that converts between IP and phone company friendly signals.
The advantages are legion: if you're building a new office, you need only one set of wiring, not two. Gateways are much cheaper than phone exchanges, and support costs are much reduced. You can integrate voicemail, email, faxes and other messages into one unified messaging system, accessed from a phone or PC. Smart IP phones can access email servers, company directories and other sources of information, and integrate with other software for things like shared whiteboards and application software.
You can extend your office phone system anywhere you can route an IP packet -- making it possible to have office extensions at teleworkers' homes and in the hotel rooms of travelling employees. Such geographical independence also reduces call charges and the cost of moving employees between desks or between cities.
So why hasn't everyone done this already?
There are several drawbacks. The network has to be fast, reliable and high quality: people have normally been more tolerant of problems with the network than the telephone system. Small delays in accessing files are acceptable: telephone calls breaking up are not. Things have become a lot better over the past two years due to the move from 10Mbps to 100Mbps Ethernet, the increased use of switches and the adoption of quality-of-service protocols such as MPLS -- multiprotocol label switching -and 802.1p together with an increase in overall reliability due to network hardware and software becoming more mature. There are other practicalities to think of. IP telephones always need some form of power, unlike many ordinary analogue phones. This has normally been provided by a local AC adaptor plugged into the mains, although Cisco has had an option for powering phones through the Ethernet wiring. A new standard, IEEE 802.3af, is being finalised for this, sending power from switches, routers, hubs or whatever along either the data or the unused pairs in network cabling. The standard makes sure that devices that don't need power aren't damaged by this: it should be ratified in 2002. As well as increased convenience, this also helps reliability -- it's easier to have one UPS running a switch than one per phone.
IP telephony needs around 80kbps per call, which isn't a significant proportion of total bandwidth, but it does need managing. Consider putting all telephony on a virtual network to ease troubleshooting, monitoring and quality of service issues. As well as the voice packets themselves, IP telephones generate quite a lot of signalling messages: make sure that your existing system management tools and skill set will cope with these and, if they don't, what new products are required.
You'll need to know what to do with your telephony support staff, who will in any case have much valuable experience that will continue to be useful even if you move to IP telephony. Train them, and the rest of the IT staff, to understand and control bandwidth management, voice quality, service levels, network health and the increased level of reliability required from the LAN and WAN. Users will not expect or tolerate problems with their phone system -- telephony is run to the so-called five nines standard, where calls work 99.999% of the time -- so the network has to be run accordingly. You'll also want to do a full audit of traffic patterns and projected changes before costing an IP telephony installation
Many of the advantages of IP telephony require new skills from the users, too, so factor in training costs there as well. It's common for larger organisations to set up a trial with a small number of IP telephones, and then use that for training -- and the triallists for education -- when a wider deployment happens. The only time when this might not be a good idea is when you're building a system completely from scratch, instead of upgrading an existing installation.
IP telephony is making good on its promises at last, but it needs a clear-headed approach. There are plenty of opportunities to save money, increase productivity and add new ways of working, but telephony is part of a company's infrastructure that's even more sensitive to disruption than other IT.