DELOITTE SURVEY: TWO-THIRDS OF GLOBAL BUSINESSES WILL DEPLOY VOICE OVER INTERNET PROTOCOL (VoIP) TO THE DESKTOP BY 2006

Cost Reduction Drives Principal Enterprise Interest in VoIP, Expanded Business Functionality Offers CXOs Advantages and Vulnerabilities to Consider

New York, October 25, 2004 -- In a report launched today, Getting off the Ground: Why the move to VoIP is a decision for all CXOs, Deloitte reveals that by 2006 over two-thirds of all Global 2,000 companies will have started deployment of Voice over Internet Protocol (VoIP) to the desktop. Desktop VoIP is the most complete form of VoIP, offering the greatest cost savings, flexibility, productivity, process improvements and overall disruption. While 26 percent of survey participants have already deployed desktop VoIP, only one-third of these companies have offered it to all employees.

According to the report, the overwhelming driver for VoIP amongst respondents is cost reduction. Eighty-four percent of companies polled regarded cost reduction as a key driver. Beyond cost, VoIP has the potential to transform enterprises’ call centers, offshoring operations and telecommuting tools. The survey finds 79 percent of early VoIP adopters are either ‘mostly’ or highly ‘satisfied’ with the technology to date.

“The initial performance of desktop VoIP was generally poor, with voice quality significantly inferior to that from existing analogue systems,” said Tony Kern, deputy managing partner of Deloitte & Touche’s Technology, Media & Telecommunications Group. “However, the offering has improved markedly with the falling price of VoIP equipment, rising call quality, improving functionality and the growing experience of service providers.”

“Organizations must balance the implications of VoIP on costs, alongside its impact on organizational efficiency and performance. It is an important new technology, which has the potential to deliver cost and efficiency benefits to companies that deploy it wisely. But it must be applied sensitively, since its disruption potential is still substantial.”

The report recommends at least four top executives’ involvement to ensure that the benefits from VoIP deployment are maximized across the entire enterprise:

The CEO. A successful deployment can improve the organization’s overall competitiveness, lowering the cost base and improving productivity through enhanced VoIP functionality. Conversely, a flawed deployment can paralyze the organization, bringing both voice and data communications to a grinding halt. The CEO must oversee the VoIP deployment such that benefits are maximized across all departments, while risks are minimized.

The CFO. Enterprise-wide VoIP deployment can significantly reduce the cost of voice communication and improve cost control, making voice usage and administration costs more predictable and easier to forecast. A strategic implementation can also improve the top line by making staff more productive. The CFO must ensure the VoIP business case is balanced to reflect the full costs and benefits.

The COO. A well-deployed VoIP system can streamline processes in every department from sales to customer support. It can also improve efficiency across the enterprise by enabling greater integration between information systems and voice-based applications. However, most organizations cannot afford to have their voice systems fail. The COO must guarantee continuity.

The CIO. VoIP is a major issue that can make or break a CIO’s career. VoIP enables centralized deployment and management of voice services and data on a single network, dramatically improving control and efficiency, and allowing closer integration with business applications. Yet, it also increases an organization’s reliance on its data network – driving up usage and complexity, and creating more work for the IT department. The CIO must deliver a VoIP deployment that delivers a strong net benefit to the enterprise.

“VoIP may eventually become a standard communication technology that does not require a moment’s thought,” added Kern. “But today, it still requires careful consideration. Decision-makers need to bear in mind the telephone’s standing as one of the most critical business tools. Both clients and employees are far less tolerant of a malfunctioning phone system than they are of IT breakdowns. VoIP requires new systems, new equipment and new skills – all of which require investment, deployment and training.”

Note to Editors
The primary research undertaken for this report includes a global study of current adoption of VoIP to the desktop among 131 businesses from the Global 2000. Respondents were drawn from all sectors and from all regions. The interviewee was the CIO or other person with responsibility for desktop VoIP deployment or evaluation. A third of enterprises interviewed turn over in excess of $3 billion per annum.