It's time for credit unions to hang up on analog phone lines.
Switching to Internet-based protocols could be a good step for "virtually any" credit union, according to Drew Lawrence, director of Information Technology at Summit Credit Union.
The $570-million CU installed a Voice-over Internet Protocol (VoIP) telephone system to connect more than 200 employees at 10 branches, completely replacing legacy Nortel Meridian Option 11 PBXs, key systems and a "mish-mosh" of single lines, Lawrence said.
One year later, Summit has seen a $40,000 drop in telephony maintenance and related costs, he said.
Summit's not alone. The Credit Union Journal reported last year that Salt Lake City-based Mountain America CU had saved $130,000 in the three years it has used VoIP systems.
VoIP savings at Summit derive primarily from easier telephony management, which the credit union now handles mostly in house instead of relying on high-cost third party support, Lawrence said. In addition, Summit is saving on contract and line costs with its telecom carriers, said Lawrence.
Although the 60,000-member CU no longer pays toll charges-calls are routed across the existing data network-Lawrence said those cost savings "were not as significant as we thought they would be."
Cost reductions aren't the only attraction. "Adding users takes minutes rather than days," Lawrence said. "We can do most of the work ourselves, which significantly saves time."
With VoIP, each telephone port is assigned a dynamic I.P. address on the CU's network- reconfiguring lines and numbers is a thing of the past. In addition, users warm up to VoIP, said Lawrence. Employees can dial, answer and transfer calls from a desktop program that is also integrated with Microsoft Outlook.
"We're utilizing strong end-user software, which gives us unified messaging," Lawrence continued. "Another advantage is that each staff member is able to log into any phone in any of our branches while retaining his or her four-digit extension-great for our float staff and those who work at a variety of locations."
Summit had to get rid of its proprietary Nortel analog phone sets, but decided against installing VoIP phone sets, said Lawrence. Instead, the credit union purchased new analog sets. "At the time, our new analog sets were roughly one-fourth the cost of a true VoIP set," he said. "We just didn't see much difference in functionality, and the cost difference was significant for us."
The switch to the IPXpress VoIP system, provided by New Orleans-based Maxxar Corp., was triggered by Summit's very origination in 2001- the consolidation between State Capitol and Commonwealth CUs in Wisconsin.
"We had two disparate phone systems from different vendors and not all branches were connected," Lawrence said. "Now we have a consistent, 4-digit dialing plan across all branches."
IPXpress was phased in over five months, he said. For the first three months, Summit routed calls across VoIP within two of its 10 branches.
Lawrence believes CUs that should consider investing in VoIP include those with multiple branch offices, expansion plans, high annual maintenance costs, and inconsistent dialing plans. "We'll see an accelerated acceptance and implementation rate for businesses over the next several years as VoIP is now truly a viable solution for businesses. The much lower costs that the Internet brings coupled with continued expansion of the Internet/data infrastructure across the world will lead to major acceptance of VoIP and similar technologies, both for the business and private consumer use."
