VoIP Adoption: Issues & Concerns
Management Science & Information Systems Department
College of Management, University of Massachusetts Boston
100 Morrissey Blvd, Boston, MA 02125
Phone: (617) 287 - 7881
VoIP is a relatively new technology. Current research suggests that firms are using VoIP technology to cut costs, to improve productivity, and the firm’s strategic position. The literature is rich with “how to” articles and a discussion of possible benefits, costs, and implementation barriers. But, very few academic studies exist. The purpose of this study is to identify and present the issues related to VoIP adoption and implementation. INTRODUCTION
The business environment has changed dramatically within the last decade. Globalization and market liberalization has altered the way a firm competes within this environment and how the firm interacts both with its customers and suppliers. For example:
Both customers and competition have become global. To cut cost and to ensure easy access to customers, production and sourcing have shifted overseas.
Technology has become complex and sophisticated.
The use of communication networks is widely available at many parts of the world.
More firms than ever are using technology for a variety of tasks and several options exist for technology procurement. Through the use of the Internet, customers have access to a wealth of information about products, markets, and a firm’s competition.
Customers have become more demanding interms of price, features, product quality, delivery, level of service, and responsiveness.
To manage customer expectations and needs firms have begun to form alliances and partnerships to manage their supply chain.
To compete in this new economy firms are looking at many strategic options. Recent events noted below suggest that firms, in particular large ones, are exploring the use of Voice over Internet Protocol (VoIP) as a means to cut costs, to improve productivity, and the firm’s strategic position1:
• Bank of America is deploying more than 180,000 Cisco VoIP phones across its branches
• Boeing has announced plans to equip its 150,000 workers with VoIP
• Ford has a deal with SBC to deploy 50,000 VoIP phones
• Vonage has nearly 600,000 customers and new subscribers at the rate of 15,000 per week
• BT, the major telecommunications player in UK has announced that it plans to convert its infrastructure to
VoIP by 2009.
VoIP is a relatively new technology. As with any new technology, some firms quickly adopt technology while other firms either wait or ignore it. Moore (1991) developed a model for categorizing new technology adopters.
According to Moore, based on the time of adoption, firms may be placed in one of five categories: innovators, early adopters, early majority, late majority, and laggards. It could be argued that firms may not be ready for another substantial investment especially if they made a recent investment in mobile and cellular services. But, published information within USA lend to the notion that the investment in VoIP is accelerating. For example, telecommunications giants such as Avaya (http://www.avaya.com) and Cisco (http://www.cisco.com) report successful implementations in hundreds of diverse firms. This could imply that VoIP adoption is in the early majority phase (Walker and Hicks 2004). But, in other countries, the situation may be different if these countries do
Communications of the IIMA
2006 Volume 6 Issue 2
VoIP Adoption: Issues And Concerns
not practice free market policies. In market economies such as USA, the individual firms make the determination on the decision to adopt VoIP technology. But in many third world countries, state enterprises often operate the telecommunication services and these enterprises