For many organizations, however, the low cost and convenience of VoIP outweigh the potential security risks and possible phone outages. Despite its previous voice-line outage, Merrill Lynch recently signed deals with Cisco and Avaya for extensive VoIP rollouts in its headquarters and branch offices. (Merrill Lynch officials did not respond to a request to be interviewed for this story.)

In addition to saving money on long-distance calls and intra-office calls, VoIP users say they will also economize by managing one converged data network instead of separate voice and data lines. VoIP is also expected to bring multimedia services to the desktop and, in some cases, improve customer service. For example, customers trying to reach a Web-based, VoIP-enabled call centre would be able to click on a hyperlink to start a conversation with a live service agent. And travelling employees with VoIP can make and receive calls from their home office numbers via their laptops.

Prepare For Safe Dialling

For Steve Novak, CIO at the Chicago-based law firm Kirkland & Ellis, VoIP technology isn't new. In his previous role at 3Com, Novak was part of the team that made one of the country's first-ever VoIP calls at a Las Vegas trade show in 1997. "We set up an old Bell phone booth on stage and the call worked," Novak recalls. "People were stunned and I remember thinking at the time that the technology held a lot of promise."

Since becoming CIO at Kirkland & Ellis, however, Novak has taken a cautious approach to VoIP. Instead of moving quickly to install the technology throughout the law firm, which has offices in seven cities around the world, Novak and his team decided to move slowly and use VoIP on calls only within the company at first. VoIP security experts suggest that those new to VoIP take Novak's approach by implementing the technology within their organizations in a slow, phased process. Then, by the time they introduce the riskier public network connections, they will be more familiar with the technology.

"The most critical success factor for VoIP is rock-solid infrastructure," says Novak. In Novak's case, that means improving backup power with an uninterruptible power supply system, backed up by a generator and a fully redundant network. He even suggests running power over Ethernet (PoE) to provide extra redundancy. "If you have a cable break, you can't tolerate loss of voice," Novak says. "Data has never been driven to the same real-time requirements."

Now when an attorney in London calls the company's San Francisco office, the call is routed out of a traditional PBX into the firm's IP backbone and converted to an IP stream across a WAN. When it arrives at the destination, it's converted into standard time division multiplexing (TDM) and sent to a legacy PBX. So while Kirkland & Ellis is eliminating long-distance charges by using the IP system, it is not yet hooking into the public network from the firm. In the current configuration, it hasn't yet run VoIP out to the desktop in a significant way, so it is not yet taking big security risks. As the company plans to replace ageing legacy telephone infrastructure during the coming years, it will move to a primarily VoIP network. "By that time we will be better prepared for the security challenges," Novak says.

Heller of Arizona's Medicaid agency agrees that a gradual approach to VoIP helped him prepare for the security challenges of a VoIP implementation. The agency first started using VoIP for long-distance calls between offices four years ago. After an initial period of training and piloting while the agency still had its two legacy PBX systems to fall back on, it decided to replace the system with VoIP at five of its metro Phoenix offices and 11 call centres; its remote offices are still using the PBX systems. Heller says the Arizona agency is saving $US425,000 a year after scrapping the traditional circuit-switched phone system for its main offices and call centres. But first he implemented strenuous safeguards, including the encryption of voice traffic, separating voice and data networks, and using a long list of intrusion protection and antivirus products. His team also monitors the voice servers at all times.

Investing in base infrastructure and encryption can add to the cost of moving to VoIP. But Novak says that the VoIP-related investments - which in his case included moving to a pure IP network core - added to the company's overall network security. "Purely financial savings are not enough to drive you to VoIP at this point," he says. But companies that don't move to VoIP will miss out on some important technological advantages. In his case, VoIP will increase mobility and collaboration by allowing his firm's attorneys to reroute their voice traffic anywhere in the world while they are on the road.