The Abco Company wishes to upgrade its telecommunications technology to a system that is more efficient than the outdated Centrex system now in place. As part of the upgrade plan, the CEO has asked for an explanation of the various systems and technologies available for the upgrade. This research explores various technologies and recommends the proper solution for the business problem at hand.
Communications Upgrade Plan
The Centrex phone system has been the standard in business telecommunications since the 1960s. The system has been the only system of this type for many years. Businesses, such as Abco have had their Centrex System for many years. However, aside from being outdated technology, the Centrex System is no longer the most cost effective solution for businesses. The Abco Corporation has had its Centrex system for as long as anyone can remember. Until recently, no one had ever thought of changing the phone system as Centrex was the current state of the art. However, with increased competition in the business environment it has become important to manage systems so that they are as operational efficient as possible. Now there are new technologies available that may soon make the Centrex System obsolete. This research will explore new technologies and their advantages and disadvantages as compared to the existing Centrex system at Abco.
The Centrex System
To understand how the other phone systems compare, one must first understand the Centrex system that is currently in place. The Centrex System is similar to a private branch exchange (PBX) system. PBX Systems use a switching station that serves only one office or building, as opposed to operating through a common carrier or telephone company. The Centrex System serves office or building, but it operates through a common carrier telephone exchange outside of the company (Tele-Movers, 2011).
The PBX and Centrex systems are less expensive for interoffice communications than placing all of those calls through the local phone service. Centrex systems were the first to allow data transfer over phone lines using the concept of packet switching (Tele-Movers, 2011). The Centrex system offered a solution that was superior to having to make all of those phone calls through the local exchange. However, it had several limitations for which no alternative was available, until recently.
One of the key disadvantages of the Centrex System was the expense. Smaller companies often could not afford to install such a system. For this reason, only larger corporations usually used Centrex Systems. Centrex systems had an advantage over the plain old telephone service (POTS) in that it had several features that were not available to residential customers (Green, 2007). For instance, the Centrex System could forward calls, it could transfer calls, and offered features such as call waiting and conference calling. These features offered many advantages over the POTS, but they were, and still are, expensive (Tele-Movers, 2011).
With the Centrex system, the telephone company owns and manages all of the communications equipment & software. The customer leases the equipment and pays for various services. With the Centrex system no equipment is located on the customer's premises, but is supplied and managed from the phone companies exchange site. The service is provided through lines running from the exchange to the office or building. This service can be delivered either over traditional copper wires, fiber optics, or by multiplexing a number of lines over a single fiber optic or copper wire (Tele-Movers, 2011).
Leasing of the equipment and the need to run wires to the building is a key reason for the expense of the installation and maintenance of the Centrex System. The cost of installing a Centrex System can devour startup capital quickly. However, this installation method also makes it easy to customize to meet the business's individual needs. The expenses involved with the Centrex System go beyond equipment, maintenance, and the monthly costs of services. When the Centrex System is installed the building owner must also include extra insurance, must assure that proper primary and backup power is available, and must include proper fire suppression systems. They must also have sufficient security on site as well (Tele-Movers, 2011). These costs are often not considered as a direct cost of the Centrex System, but many agents require these items as a minimum of the lease agreement. The business's leasing a Centrex System must assure, to the greatest extent possible, that no damage or harm will come to the system even in the most unlikely of circumstances. In the event of a loss, the Centrex system would be costly to replace.
The Centrex System at Abco is antiquated and although the phones themselves have been updated as necessary, much of the system still operates using the same wires and hardware that was installed in the 1960s. The cost of services on a monthly basis, as well as maintenance and repair of the system are becoming a burden to the company. In addition to the monetary burden, the old system simply cannot keep up with the demands that are being placed on it and it is subject to go down at the worst possible time, which it does on a more frequent basis as time goes on. Many agree that it is time to scrap the old system and find a new replacement. The next section of this research will explore solutions to the problem of replacing the old Centrex System.
New Solutions and Technology
One of the solutions that many businesses are choosing to replace their old Centrex systems is Voice-over Internet Protocol (voice-over IP or VoIP). VoIP represents a family of technologies and communication protocols to deliver voice communications and multimedia sessions over the Internet (Packetizer, Inc., 2011). This technology is also known as IP telephony, Internet telephony, voice-over broadband (VOBB), and a broadband phone. VoIP can be used to deliver voice, fax, SMS, or voice messaging over the Internet, rather than a public switched telephone network.
Several steps are involved in sending a VoIP telephone message. These are:
• media channel setup
• turning the analog voice signal into a digital signal
• encoding the signal
• packetization of the signal
• transmission as IP packets over a packet-switched network.
Several steps are also involved on the receiving side as well. They are:
• receiving the IP packets over a packet-switched network
• decoding the packets from digital to analog to reproduce the original voice message (Packetizer, Inc., 2011)
The end result is a voice message that the receiver can understand and respond to. When the receiver of the message responds, the process starts all over, only they now become the transmitter and the process happens in the other direction. During the course of a conversation this process happens over and over again so quickly that there is hardly any noticeable interruption or break in the conversation at all. All of this happens so quickly that the result sounds just like talking to the person as if they were in the same room.
VoIP is available for use with standard PCs and networks. Now it is available on portable devices other than phones. Many devices can still make calls or send a SMS text messages using 3G or Wi-Fi technology. This makes VoIP able to communicate in many ways that the old Centrex System could not.
Initial Basic Equipment and Cost
The equipment needed to connect to VoIP service is much less expensive than that needed to connect to the Centrex System. Dedicated VoIP phones connect directly to the IP network using wired Ethernet or Wi-Fi. Many of the business phones that connect to VoIP service are designed to look like the traditional Centrex business phone. In order to connect, you need a laptop or personal computer, a router/hub/switch device, an analog phone, and a power source. An analog phone adapter connects the analog phone to the network, allowing a normal phone to be used over the Internet (Callahan, 2008).
Abco already has PCs and laptops that could be used in connection with the VoIP service. It already has everything except for the router/hub/switch. These are available from VoIP providers for under $100 each. The total cost would depend on how many phones the company chooses to hook into the new system. It is not expected that the company would have to purchase much in terms of additional equipment other than the router for the phone. The company already uses a cable network and would be able to use the existing Internet connection. VoIP requires that the network is able to download at adequate speeds. The current network at the company is already the fastest available, therefore it is not expected that any upgrades would need to be made on this system.
Many of these look exactly like traditional phones only some of them are in a new design called a soft phone. In this case an application looks like a dial pad and the user can operate it using mouse clicks or keyboard…