Is VoIP the answer?

Internet telephone solutions can offer increased productivity, decreased costs

By John Chivvis

As insurance agencies look for new ways to keep costs down while at the same time improving processes, one area that comes to mind is that of the business phone system. Traditionally, small agencies might have several phone lines and larger agencies might run a PBX or centralized phone bank system along with their respective high-speed network connections.

Instead of routing calls over land lines through a system of exchanges and switches, some agencies are opting for “Voice over Internet Protocol” (VoIP) systems. These systems package up audio into data packets and send them over a network or over the Internet. By treating phone calls and fax calls as data, agencies are finding VoIP digital phone solutions to be an attractive and cost-effective option for their business.

At the AAMGA Automation Conference, held in March, members of the California-based Cambridge General Agency and the Texas-based McClelland and Hine, Inc. (MHI), discussed their own VoIP implementa-tions and how it has benefited their respective businesses.

Hosted solution

“For us, the decision was budgetary,” recalls Jason Janofsky, director of IT for Cambridge. “We were moving our home office, and we were looking for a way to lower costs—but also increase the interoperability of our phone service.”

Janofsky says that the old phone system included an aging PBX switch with 10 lines, a toll-free number that forwarded to the main line, and then two DSL lines. With the move, the concerns were the loss of productivity with the PBX system having to be moved, or having to purchase a new system if the old switch broke.

The VoIP solution that Janofsky and Cambridge implemented is a hosted solution. “For most small to medium-sized agencies, a hosted VoIP solution is the way to go,” says Janofsky. “Most of those agencies don’t have the staff to support a VoIP system and server on their own, nor can they afford for it to go down.”

In a hosted solution, the phone company or the contracted vendor is the administrator of the VoIP server, and the agency’s phones connect over the network and Internet to their VoIP server for processing. “We were able to implement our hosted solution and acquire three T1 lines for what we had been paying for our old system and the DSL,” says Janofsky.

The savings also added up beyond the additional data capacity. Cambridge is now able to roll all of the lines into its home office, eliminating the costs of having receptionists employed at every branch office. By connecting to the phone company over data lines, Cambridge pays less because government surcharges and fees are eliminated. Long distance charges are greatly reduced, as data is not subject to the traditional per-minute charge over phone lines.

However, the greatest benefit that Janofsky has found is the flexibility that the phones offer for employees to be more productive. “In a sales-oriented business like insurance, the phone is our life,” he explains. The new system offers the ability for callers to dial directly to reach an employee—something the old system didn’t support—as well as be able to dial the main number and be transferred.

Even more, their VoIP phones can be plugged in anywhere on the network or Internet and still have the number and the service because they are plugged into a network connection, not a traditional phone jack. “This allows us to conceal an employee’s office location,” says Janofsky, “so they can work at home and the caller would never know.”

Cambridge operates five offices from San Francisco and Sacramento and south to the Los Angeles area, all served by a single phone system. “Basically, this standardizes the phone system, because now we all have the same service and we can transfer between offices,” concludes Janofsky.

In-house developed solution

“Our current lease was up for renewal for our phone system,” begins Robert McCallum, MHI’s CTO. “The service level from the vendor had declined over the period of the lease and we also wanted to integrate our phone data into our system.”

That being the case, McCallum and MHI’s Systems Administrator Michael Rice began looking into VoIP options. After a number of vendor presenta-tions, they came to realize that maybe hosting wasn’t for them—because they felt like they were at the mercy of the vendor when it came to service. “If they were down, then we’d be stuck,” says Rice.

From the presentations and research, McCallum and Rice realized that they could do it themselves. One of the requirements they placed on the vendor was that the system had to use an Asterisk® server, because MHI wanted to be able to leverage its capabilities. Asterisk is an open source VoIP server software and MHI is, as McCallum says, “very comfortable working with open source.”

In fact, MHI developed and operates its own management and policy issuing systems. “As a company, we’re always looking at technology,” says MHI President Gil Hine. “We always are asking ourselves, ‘Is this something that we can develop?’”

So MHI began developing and testing its own VoIP solution. Parallel to its regular phone system, McCallum and Rice began to slowly bring up a test system, starting with five phones in its San Antonio office. “It was going to be a big expense, so we started out small,” explains Rice. “This way, if it failed, then we lost only a couple of hundred dollars.”

But it didn’t. In fact, within less than five months from that first test, they had MHI’s three offices—San Antonio, Houston and Dallas—up and switched over. And while there were fiscal savings, the real benefit to VoIP for MHI was the flexibility in the Asterisk system and the integration they were able to realize.

“I saw a system where the caller ID popped up on the user’s computer screen, and I thought it was awesome,” admits Rice. “So we developed one.”

And they have taken it one step further. They have built an “agent dashboard” that takes the number that is pulled up in the caller ID and queries it against their customer database. Based on the information returned from the database, the dashboard shows customer information such as policies written, quotes given, and even offers one-click capabilities to open the files specific to taking care of that customer.

Besides integrating the call data with the computer system, MHI is also pushing information to the phone display. This way when the phone rings, the display shows who it is, what their production is, and even who the key agents are. Other custom-developed features aid productivity, ranging from “click to call” functionality to conference call capabilities—all to make the representative’s work more effective and efficient.

Further review

For some insurance professionals, VoIP sounds like it may be something from out of left field. As a technology, VoIP has been around for almost 20 years, but only recently has it been seen as a viable business solution. “Five years ago, we wouldn’t have considered VoIP an option,” says Janofsky, “but increased bandwidth and decreasing costs for data lines have made it much more feasible.”

Whether it’s a hosted solution or an in-house developed solution, the individuals we spoke with agree that the first step for an agency interested in VoIP is research. “Google ‘VoIP’ on the Internet and you’ll find a lot of information,” says Rice. He also adds that for those who implement an in-house solution, online forums provide a good way to learn and interact with those creating, developing, and supporting the technology.

Janofsky says that agencies ought to also look at their network and perform a self-audit of sorts. “Look at your data network and see how everything is connected—are you using hubs, are you using CAT-5 or CAT-6 wiring?” he asks. For agencies looking at hosting, Janofsky says to check with vendors/providers and have them assess the phone and data networks.

McCallum adds that while “research is a key component,” it is “not always the gospel.” He says that research and vendor assessment is important, but it’s also important to do real-world testing—especially when the agency is developing its own system—in order to see what does and does not work in a particular agency setting.

Ultimately, the success of a VoIP implementation whether hosted or in-house, is tied back to the agency’s leadership. “As a company, it has to be a strategic decision to invest the money, the people and the resources,” says Hine. “It has to be the company’s mindset, because it’s not a small investment.” *

The author
John Chivvis is a Texas-based writer who specializes in topics of technology implementation. His work has appeared in a number of national and regional publications.