Ford to cut cord on 8,000 phones

Ford to cut cord on 8,000 phones

Ford Motor is replacing the traditional wireline phones of 8,000 employees in its product development department with wireless phones from Sprint. The move, believed to be the largest of its kind, continues a trend that's well underway in the consumer world but just getting started in corporate America: Businesses are eliminating some, or all, of their wireline desktop phones in favour of going all-wireless, all the time.

Ford Motor Co. is replacing the traditional wireline phones of 8,000 employees in its product development department with wireless phones from Sprint. The move, believed to be the largest of its kind, continues a trend that's well underway in the consumer world but just getting started in corporate America: Businesses are eliminating some, or all, of their wireline desktop phones in favor of going all-wireless, all the time.

"It's really about mobility," says Jeff Lemmer, IT manager of telecom services at Ford. Product development "is a group that tends to physically move around a lot. It is real important from a communication standpoint that they are able to interact openly and freely with each other."

Experts say that all-wireless is not yet a common choice - or necessarily the best one - for all corporate customers. Wireless minutes can cost up to 10 cents more per minute than wireline. Products that let companies integrate wireless users with their PBXs are lacking, and wireless coverage - inside and outside buildings - can be troublesome.

"We see a high rate of replacement, up to 16 percent, where consumers are giving up their landline phones for wireless," says Kneko Burney, chief market strategist for customer and service provider markets at In-Stat/MDR. "When we asked business users that make buying decisions for their company the same question, only 5 percent indicated they would even consider it."

But Burney says that number could reach 15 percent over the next three to five years when more small businesses opt for all-wireless, and more large businesses begin migrating departments.

Ford, which has more than 327,000 employees, isn't waiting. The nation's No. 2 automaker has already migrated 800 employees from landlines to Sprint's wireless service. That transition occurred after Ford spent much of the fourth quarter working with Sprint to build out in-building coverage in Ford's Dearborn, Mich., buildings. It was the most challenging and time-consuming part of the rollout, Lemmer says. To ensure service coverage and optimum reliability, Sprint has deployed network infrastructure within Ford's facilities.

"We are actually removing our existing landlines, and the cell phones will become the primary telephony communication device for these employees," Lemmer says. "Therefore, it was important we have a good quality of service before we actually did the deployment."

Sprint also beefed up its coverage throughout southeastern Michigan to ensure Ford's employees would have reliable service while traveling around town. The in-building buildout was part of Ford's overall deal with Sprint.

Ford's desire to improve communications between its engineers is the main driver behind its use of Sprint's Ready Link walkie-talkie feature, along with standard cellular service. Ready Link lets users click a button on the side of their phone to instantly access other users who are on a directory that's uploaded to each phone before it's issued.

While moving users exclusively to wireless phones might raise concerns about excessive personal calls, Ford has a long-standing wireless use policy that also applies to these 8,000 employees, Lemmer says.

Ford doesn't expect to migrate many other employees to the wireless-only project. "We see it as a niche (deployment) for certain types of users that are highly mobile," Lemmer says. The company also didn't consider cost cutting an objective.

"We were able to look at what we are paying currently for landlines and pagers and felt that this was really a cost-neutral, not a cost-saving opportunity," says Lemmer, who declined to provide cost details.

Cost is actually one of the big drawbacks of migrating to an all-wireless environment today, says Bob Egan, president of consulting firm Mobile Competency. "Many users may not have the leverage to get out from under bulk-rate plans," he says.

That translates to companies paying much higher per-minute rates for wireless vs. wireline usage. "The industry average is about 4 to 5 cents per minute for wireline and about 14 cents per minute for wireless. That's a big disadvantage," Egan says.

Another challenge today is integrating wireless users with legacy PBX switches. In Ford's case, the company is putting that integration on the back burner because it is in the midst of a large VoIP deployment.

In September, Ford announced one of the largest VoIP deployments, with 50,000 phones. SBC Communications Inc. is managing the US$100 million project.

Integrating wireless with Ford's VoIP and Centrex system will be the second phase of the wireless project, says Allyn Phillips, manager of extranet infrastructure. "We are currently exploring that with SBC."

But for 2005, Ford's wireless users will not have access to typical PBX features that most in the corporate world take for granted, such as four-digit dialing, call transfer or call forwarding. Users still will have features such as caller ID and voice mail, but they will be supported by Sprint rather than a corporate PBX.

Products that offer wireless-to-PBX integration are not mature, Egan says. There are a handful that do the job, but not many from which to choose. Mitel Communications, Ascendent Telecommunications and Orative are among the vendors that make products that let users integrate their wireless phones with their PBX or add software to wireless phones to have them act more like desktop phones attached to a PBX. Analysts expect more choices in the next 12 to 18 months.

Despite Ford's desire to eventually integrate its wireless users with its VoIP and Centrex systems, it has no plans to integrate wireless with the small pockets of Wi-Fi it has deployed in the near term.

SMBs making the move

While Ford's wireline-to-wireless project might be the largest to date, smaller businesses also are making the transition.

A year ago, NovaSol, a scientific research firm, moved its offices in Honolulu and took that opportunity to ditch its traditional phones for wireless devices.

"There were multiple reasons for the switch," says Jim Cummings, director of quality and operations at the company. The move would cost the company up to US$30,000, which included moving all the phones and wiring the new office space. The company's telephony expenses were also high, Cummings says.

"Because our customers are folks like the U.S. Department of Defense and largely on the East Coast, I was spending a lot of money on long-distance service," he says.

That led to a decision to migrate all 80 employees to Verizon Wireless service.

While money was a factor, it wasn't the main motivator. Like Ford, NovaSol wanted to increase its communication capabilities.

"If I have people on the East Coast at an Air Force base and they need information right away, calling our office in Hawaii and getting someone's voice mail is not acceptable," Cummings says. "With a five- to six-hour time difference, that means we lose a day."

Although Cummings doesn't expect to reduce much of his telecom expenses over the next five years based on the move, he says "you just can't put a price on the benefit of being able to talk to someone right away."

Like NovaSol, Dana Corp., a manufacturer of products for the auto industry, took the opportunity to get rid of some of its landline phones when it moved to a new facility in Auburn Hills, Mich.

Many of Dana's employees already had two phones: the one on their desktop, plus a mobile phone. It didn't make sense to keep both, says Rich Henry, IT manager.

The policy within Dana is that all sites must connect to the company's main PBX, Henry says.

Dana's wireless service provider, Nextel Communications Inc., provided WirelessConnect, a product from Ascendent that facilitates wireless-to-PBX integration. That means workers in Dana's headquarters in Toledo, Ohio, can forward calls directly to wireless users in Auburn Hills, where the company assembles drive shafts for General Motors Corp. and Chrysler.

The Ascendent system lets wireless users reach Dana's landline dial tone, which lets them use four-digit dialing to reach fellow employees.

There are still more than a handful of landlines at Auburn Hills, Henry says. Most support teleconferencing equipment in conference rooms.

While Henry likes the increased flexibility wireless phones offer, and the fact that he linked up to the company's main PBX, he says it's not a panacea. There are still quality issues with wireless. "It is less reliable than landline-based systems, but it does seem to be getting better," he says. -- Network World (US)

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