Case Study

How A Collection Agency Recovers Money Using Networked Telephony

Customer Profile
Company: Accounts Recovery Corp.
Headquarters: Victoria, British Columbia
Offices: Four locations - Victoria; Burnaby, B.C.; Burlington, Ontario; Laval, Quebec
Employees: 250

Accounts Recovery is a long-established, privately-held collection agency that pursues payment of overdue accounts and defaulted loans on behalf of major banks and credit card companies in Canada.

The Challenge
Most of Accounts Recovery Corp.'s 250 employees spend a significant part of each day on the phone, either making calls to or receiving calls from creditor clients, debtors and others. As a result, by early 2001, the company's phone costs, including charges for local Centrex services and long distance calling, had ballooned to more than $45,000 a month. Cost of collection is a key metric in this competitive industry and minimizing by any means possible is vital. "We knew that we could attack those expenses and bring them down to a much lower level," says Joe Polard, Vice President and Assistant General Manager at Accounts Recovery Corp. The question was how?

The Solution
After reviewing several alternatives, mainly traditional PBX systems, Accounts Recovery selected Glenbriar Technologies Inc. of Calgary, Alberta to design a networked IP phone system that would link the company's four offices using a variety of connection services and media. The company also took the opportunity to install upgraded Ethernet local area network infrastructure in each office to support the phone system, including data switches and CAT-5 cabling.

The solution includes:

• A 3Com® SuperStack® 3 NBX® Networked Telephony Solution capable of supporting up to 750 users coupled with a CPU, which sits in the company's Victoria headquarters and manages and controls network links among all four offices.
  
  
• SuperStack® 3 NBX® systems in each of the three branch offices.
  
  
• 240 3Com NBX® business phones.

The Benefits
With only two of the offices transitioned over 100 per cent to the new system, Accounts Recovery Corp. has already almost halved its telephone costs - a total projected savings of more than $20,000 a month. "Conservatively, we expect the system to pay for itself in a year, possibly less," Mr. Polard says.

Some of the savings are a result simply of abandoning expensive phone company Centrex services, under which each employee had a dedicated local line, and taking advantage of the line pooling capabilities of any private telephone system. The 170 employees in the two B.C. offices now share about 55 local and 24 long distance lines - down from 150 Centrex lines in the past.

Glenbriar also established a telco-supplied dedicated 10-megabits-per-second data link between the Victoria and Vancouver offices. All inter-office calls are now routed over this link using the 3Com system's voice over Internet protocol (VoIP) technology, thus eliminating regular long distance charges. Employees in both offices can also use this wide area network (WAN) link to call anywhere in the other office's local calling area without paying long distance charges. Projected savings on long distance amount to over $15,000 a month.

At the Burlington, Ontario office, Accounts Recovery is purchasing a flat-rate local calling area service that gives it local dialing access everywhere in the 416 (City of Toronto) and 905 (Greater Toronto Area and Niagara Peninsula) calling areas. Once broadband WAN links are established with the Burlington office the company will be able to use the same VoIP technology and IP network routing to call anywhere in the Toronto area through Burlington free of long distance charges.

To achieve the same objective of low- or no-cost long distance on outbound calling, Glenbriar will install a DSL link to the Internet from the Montreal office, the company's smallest. Long distance calls will then be routed over the public Internet. Accounts Recovery's telecom provider in Montreal guarantees a quality of service over this connection that will provide near-toll-quality voice calling on the Internet.

Accounts Recovery can also save toll-free line charges on incoming calls originating in the Toronto area if B.C. employees remember to give contacts their local Toronto-area phone numbers. The NBX system will automatically route calls from Burlington over the WAN using VoIP to the employee's extension in Victoria or Vancouver.

The SuperStack 3 NBX system's flexibility in supporting virtually any kind of service or medium without requiring the use of expensive routers and gateways gave the Glenbriar proposal a price advantage over competitors, says Bruce Thompson, the company's Director of Marketing. That flexibility means Accounts Recovery has more choice - the network includes E10 (10-megabits-per-second fiber), PRI (Primary Rate Interface) ISDN, DSL (Digital Subscriber Line), analog line and VPN (Virtual Private Network) connections - and can therefore more easily negotiate optimum rates from ILECs and CLECs.

In Victoria and Vancouver, the company has already renegotiated local line rates down from $38 to $23 per month each. Lower line rates coupled with the cost benefits of line pooling produced a saving of about $5,000 a month on local line charges.

Finally, Accounts Recovery expects to save money on moves, adds and changes - including sophisticated custom set-ups - by doing its own system programming through the NBX system's browser interface. This would not have been possible if the company had opted for a traditional PBX system, Mr. Polard believes. "With 250 employees, there is a fair amount of turnover here," he notes. "But the NBX system's browser interface makes it very easy to do moves, adds and changes."

Accounts Recovery is already experimenting with the SuperStack 3 system's computer-telephony integration features, but the immediate priority today is financial benefits. "If it can't lower costs or enhance productivity, it doesn't get much attention around here," Mr. Polard says.

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