Two years after beginning a major conversion to Internet-based telephone systems, Bank of America Corp. says it is hitting its stride in converting branches and plans to begin a call-center pilot test by yearend.
Craig Hinkley, a senior vice president in the Charlotte banking company's network services unit, said that B of A has installed 20,000 handsets and plans to have 24,000 by yearend in more than 800 branches and 50 enterprise offices.
"In the domestic U.S. market, we are committed to moving to IP telephony systems," he said.
However, he also acknowledged that the company is behind the schedule it originally set for introducing voice-over-Internet protocol.
When the San Jose Internet equipment maker Cisco Systems Inc. announced in September 2004 that B of A had agreed to use its IP phones, it said the retail banking giant planned to install 180,000 of the devices within three years.
"We are probably slightly off the run rate" that executives anticipated when the company started the conversion program, Mr. Hinkley said in an interview Friday.
B of A now plans to replace its more than 460 private branch exchange systems by late 2008 or early 2009, though this timeline could change, he said, due to factors such as B of A's January acquisition of the card issuer MBNA Corp.
With the need now to integrate the nation's largest card-services business into the phone-conversion schedule, "we may need to recalibrate that" schedule, Mr. Hinkley said.
On Monday, Cisco announced that B of A had received the 10-millionth IP telephone it has shipped since entering the Internet telephony market seven years ago. Electronic Data Systems Corp. is supplying systems integration and services for the B of A project.
Mr. Hinkley said B of A discovered early on that it needed to plan the rollout carefully to get the greatest benefit from the new technology, rather than simply replacing conventional phone switches with Internet call routing. "We slowed down the start to build in the business interaction, to figure out what those standards were," he said.
Some companies have delayed Internet telephony introductions because of the expense of retiring their conventional, switched PBX systems, which could impose a hit on their balance sheets, but Mr. Hinkley said that such writeoff costs were "not an issue in this rollout."
B of A has worked more than three years with EDS to beef up its data network. "Voice systems, on the other hand, had not had the same level of investment," Mr. Hinkley said.
"Our branch program is now executing like clockwork," he said, and the company plans to turn more attention to its nationwide call center network.
When the Internet phone system is fully deployed, it will support capabilities that are not possible now, Mr. Hinkley said.
For example, an employee will be able to check voice mail remotely using a Web browser; staff members will be able to route calls to other business units regardless of location; and B of A will be able to use branch staff to pick up overflow volume from call centers.
Beyond that, he said, he envisions being able to "integrate voice communications into my other systems and processes," for example, adding a voice channel to the online banking service.
Jay Lassman, a research director at the research and consulting firm Gartner Inc. in Stamford, Conn., said financial companies are among the leaders in adopting voice over IP technology, which "gives them the opportunity to tie in more of their branches into a centralized corporate network."
"Before, you would have islands of people in the branches," he said. "It would be inconvenient and much more costly to integrate them into a single resource, if you could do it at all."
