Global securities and investment services firm Morgan Stanley is dialing up a Voice over Internet Protocol (VoIP) solution from Avaya that will let its Institutional Securities Group place internal and external telephone calls over the Internet.
The move is likely to help simplify Morgan Stanley’s IT infrastructure by reducing the number of communications servers used across the company and reducing telephone costs per user.
The Avaya application will support Morgan Stanley’s Institutional Securities Group, which offers financial advisory and capital-raising services to corporations and other institutions in more than 20 countries. The deal also includes Discover Financial Services in the United States and Morgan Stanley’s credit-card business in the United Kingdom.
Neither Morgan Stanley nor Avaya would comment on the cost or size of the proposed installation.
“The question has always been whether or not voice over IP is ready for the enterprise,” Chris Selland, vice president of sell-side research at Aberdeen Group, told CRM Buyer. “This is just more proof that it’s real — and actively being adopted by larger enterprises.”
Toss Out the PBX
Morgan Stanley’s implementation of Avaya’s new voice platform marks the financial firm’s shift from a traditional private branch exchange (PBX) to a distributed, IP-enabled architecture. PBX’s are generally used by mid-size and large enterprises and share a specific number of outside lines for calls external to the PBX system. This tends to make using a PBX less expensive than connecting every line in a company to the external world. Internal calling is also easier with a PBX because users need only dial three or four digits.
However, enterprise-level Internet telephony solutions are challenging all of this conventional wisdom. Because VoIP uses the Internet, companies can reduce per-call costs.
Avaya IP telephony provides Morgan Stanley with technology that allows complete desktop extensions to be integrated with users’ computers, giving them all the functionality of an office phone while traveling — as long as they can access their corporate network. Calls to users’ office phones also can be redirected to their cell phones, making it easier for customers to communicate instantly with employees.
Reducing Costs Key
To maintain their competitive advantages, financial services companies like Morgan Stanley are faced with the need to continually upgrade their service delivery capabilities while reducing costs by decreasing or consolidating infrastructure. Therefore, using VoIP to reduce per-call costs offers an immediate incentive to larger enterprises.
As telephony and computing continue to converge, there is also potential for the technology to provide new benefits to customers. For example, one of the largest professional services firms in the world, Ernst & Young, recently chose Avaya to implement one of the largest IP telephony solutions in the United Kingdom. The goal: to increase communication efficiencies between on-site employees and customers.
According to Denis Pombriant, founder of Beagle Research Group, VoIP is a smart play, especially for internal communications, when a global enterprise wants to connect hundreds of geographically dispersed offices around the globe.
Built for Expansion
According to terms of the Morgan Stanley deal, Avaya’s solution will be implemented over a three-year period. Because the offering is built on open standards-based applications, Morgan Stanley and its 600-plus worldwide offices will have flexibility in the future to phase in other VoIP-based functions and features for its other investment banking business segments — or even for its consumer-focused brokerage and credit unit.
However, Beagle Research’s Pombriant offered a note of caution with regard to the future ROI of this technology.
“Companies forget that today voice over IP is inexpensive because it’s not taxed like other telecommunications,” he told CRM Buyer, “so any IP telephony advantage may be fleeting.”