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IP telephony project: Caterpillar converting 100,000 phones

Caterpillar, the world's largest manufacturer of construction and mining equipment, is in the midst of a massive IP telephony project. Steve Bergstrom, Caterpillar's enterprise voice and unified communications architect, said the company has converted 35,000 of its 100,000 phones to IP so far. He shared the details of his company's voice and unified communications strategy with

In the midst of a massive IP telephony project, Caterpillar is getting rid of a costly, decentralized analog voice system and laying the foundation for an enterprise-wide unified communications rollout.

Caterpillar, the world's largest manufacturer of construction and mining equipment, has so far converted 35,000 of its 100,000 phones to IP telephony, including all 24,000 lines at company headquarters in Peoria, Ill., according to Steve Bergstrom, enterprise voice architect and unified communications (UC) architect.

Bergstrom's team is gradually eliminating a constellation of analog PBXs that were scattered across the globe -- scattered and so numerous that he couldn't get an accurate count of just how many the company had.

"In Peoria alone we had eight PBXs," Bergstrom said. "Throughout the company it was hard to get an exact number. We had corporate standards, but if you go through the different business units, with independent thinking and evolution through acquisitions and divestitures, we started collecting a lot of different types of equipment."

Citing corporate policy, Bergstrom steadfastly declined to discuss any of the vendors Caterpillar is using for this project. However, given that he recently presented his IP telephony project as a customer case study at Cisco Live in Orlando, it's safe to say that Cisco Systems had some involvement in the undertaking.

A first step in the IP telephony project was to consolidate call routing into three "regionalized information centers," Bergstrom said. The Peoria headquarters serves North and South America, while similar centers in Belgium and Singapore serve the rest of the world.

This centralized approach to IP telephony has helped Caterpillar in several ways, he said. For instance, the total cost of ownership for voice is dropping because the company has consolidated systems and support.

"I don't have to maintain two different networks. I have one network for voice and data," Bergstrom said. "And instead of going out and putting in systems that have capacity for 500 phones in a remote site that might only have 200 phones, we put in a centralized system so we can slice that up more efficiently."

Also, with centralized IP PBXs, Caterpillar no longer has to put voice switches in each regional office. "That's one less thing to take care of. There's not equipment on site," he said.

Consolidation of support has been a revelation, Bergstrom said. He no longer needs a person at each regional office to manage voice. He can use his staff centrally, which makes them more efficient.

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"If there's somebody at each of those sites maintaining that system, and it only takes them a little bit of time every week, that little bit of time is relative, because to make a change they've got to remember a password, and they've got to remember commands, and they've got to remember how to get in there," he said. "It can take 30 minutes to an hour to do something that from a centralized standpoint takes a matter of minutes only because we're more familiar with it. Our people are more efficient because of the economy of scale."

The transition to IP telephony has been very gradual for Caterpillar, with no hard cutover from analog to IP. Bergstrom said the transition began with 50 phones in the IT department in Peoria. As the organization became more familiar with how the system worked, they expanded outward, reaching a point where the company was converting about 1,600 phones a week.

At first, Bergstrom contemplated using contract labor to physically install the phones, but through conversations with business leaders, he realized that he had an untapped resource available.

"Caterpillar said, 'Why can't employees help us?' There was a campaign at a supervisor level," he said. "Our team can have a team-building exercise by plugging in phones at night. I didn't think it would work, but it did. Surprisingly, people wanted to help. They were excited about a new technology and excited to get rid of old phones that they had had for 10 years."

It took about 18 months to convert corporate headquarters to IP phones, Bergstrom said. "The reset of the enterprise, we're just going to let things go through attrition or depreciation or some other sort of driver."

With IP telephony rolling out steadily, Bergstrom is now turning his attention to unified communications. Caterpillar is exploring its options with presence and using unified clients.

"We're struggling with it as a company, trying to figure out how to get there," he said. "We're focusing a lot right now on presence and a unified client. I would say the unified client is at the forefront of what we're looking at right now. It's bringing all that stuff together so that the end users on the desktop have all the tools they need. We're going to have to figure out what the costs are and what the value is. Do we do it widespread or in pockets, and what is the smartest way of doing it? Also, do we do it all at once, or do we do pieces of it and layer [them] on top of each other?"

The IP telephony switch has already paid productivity dividends, particularly in the company's contact centers. The switch to IP phones coincided with the installation of new IP contact center technology.

"Before, we had disparate contact centers," Bergstrom said. "We're starting to bring them together. What that enables you to do is to virtualize. The contact center exists in a cloud instead of a site. You can pick agents from wherever you want."

Bergstrom said he can take people with different skill sets and blend them among different contact centers. Those people can move in and out of different call queues to take calls based on situations. As a result, Caterpillar's contact centers have reduced their average speed-to-answer by 60 seconds and increased their call volume by 15%.

"It's not often that you increase call volume and reduce your speed-to-answer at the same time," he said.

Let us know what you think about the story; email: Shamus McGillicuddy, News Editor

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