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The CFO’s guide to IP migration

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There are typically two main objections to moving to an IP infrastructure: the perceived financial outlay, and the risk to business operations. But effective communication between the CIO and the CFO can lead to the development of a compelling business case for migrating to IP.

IP networks are more flexible and much more likely to be more cost-effective than legacy networks. Traditional (legacy) telecoms and IT systems use multiple lines, which means multiple costs.

With your existing legacy system, you’ll typically have three access lines – a primary network for data applications and other lines for your voice, fax, video, alarms etc. All have separate monthly charges potentially from multiple service providers and all can add up to a substantial annual business overhead (cost + administration).

Think of your home telecoms and IT set-up. It is highly likely you will have telephone, internet and sky television, possibly your alarm, all running over the same broadband connection through one single provider.

It’s exactly the same in the business environment. Switching to IP enables you to converge business applications onto a single network, not only simplifying your operational infrastructure but also reducing costs.

With IP in place, you’ll not only be able to run all your data, voice and video applications, you’ll also be able to run other applications including thin-client access (a screen and keyboard connected via broadband to a centralised server) and ERP (e.g. SAP), further streamlining overall network management.

There is clearly a cost of change associated with upgrading to an IP infrastructure. The financially viable option is to opt for a ‘stepped change’ approach, taking progressive technical steps away from legacy toward a full IP infrastructure.

In this way, you continue to manage existing legacy systems over the course of their useful lifecycle, gradually carrying out future installations over IP so that the savings self-fund the cost of migration. The good news is IP costs are falling and managing legacy systems is also becoming cheaper.

Once migration is complete, you will have a robust, flexible converged voice and data infrastructure, the costs associated with the management and maintenance of two separate infrastructures and their associated personnel will have been reduced and you’ll have a great benefits realisation case study.

A stepped change approach to managing the migration to IP over a defined period of time – application-by-application – to fit in with natural product lifecycles will remove unnecessary risk and disruption to operations, as well as simultaneously improving network performance.

The end result is a converged, streamlined network capable of operating multiple business applications – from credit card transactions to IP-CCTV – over a single connection. The network will also automatically prioritise these applications, ensuring network performance is optimised and operations streamlined, and critically helping to make the CIO’s life easier.

Migrating to IP delivers both operational and financial benefits. By making the gradual migration to IP, you’ll get the benefit of clearly set-out communications expenditure and the advantage of a future-orientated infrastructure with no shocks on the balance sheet, an approach which will find favour in finance and in the server room alike.  

*Stephen Pratt is the director of finance at TFM Networks.

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