VOIP Passes Nissan Road Test

"The idea was never if it should happen, but when it should happen," said Steve Lydston, IS manager for Networks and Security for Nissan North America Inc., based in Gardena, Calif. With an eye toward saving money and improving corporate collaboration, Lydston studied VOIP for several years. When he judged the time to be right, Lydston embarked on a plan that would span several years, gradually bringing VOIP into all company offices and factories.

"We take a very conservative view of things. We dont want to put the company at risk of serious outages," said Lydston. "We purchased technology to allow us to IP-enable all of our locations, but so we would not have to jump into everything at once." The move to VOIP started almost three years ago, said Lydston, and it will go on for three to four years.

Nissans culture may be conservative, but with the company close to bankruptcy in 1999, dramatic changes were needed. In the face of industry watchers predictions that Nissan would be acquired, Chairman and CEO Carlos Ghosn launched the Nissan Revival Plan and its sequel, Nissan 180, which is in the final year of its three-year life span. The number 180 is derived from the goals of the plan: to sell 1 million more units globally this year than in 2001, to achieve an 8 percent operating profit margin and to reduce debt to zero.

The implementation of VOIP, and the money savings it is expected to generate, is one component in the massive global initiative. But dollar savings arent the only reason for the move to VOIP. Enabling closer collaboration across far-flung worldwide operations is another. Videoconferencing between design and manufacturing engineers is a key goal.

VOIP is entering a new era of mainstream adoption. Click here to read more.

Nissan is not alone in its "not if, but when" approach to VOIP. For example, Visteon Corp., the automobile parts consortium, which counts Nissan as a customer, is in the middle of a massive VOIP rollout as well. Visteon has already deployed 6,000 IP handsets and will connect another 6,000 this year, according to Mike Loo, director of global IT strategy and infrastructure for Visteon, based in Van Buren Township, Mich. With the help of IBM Global Services, Visteon is deploying mainly Cisco Systems Inc. and some Avaya Inc. equipment, Loo said. He is counting on 30 percent monthly savings compared with previous telecommunications expenses, which were for mainly antiquated Centrex services. Like Nissan, Visteon plans to enable engineers to collaborate via videoconferencing. Eventually, Loo said, he plans to enable videoconferencing between Visteon and its customers, including Nissan.

As part of a worldwide company with French partner and controlling shareholder Renault in the Renault-Nissan Alliance, Nissan makes its own purchasing decisions but coordinates them with the global organizations of Nissan and Renault, both of which are moving to VOIP, Lydston said. Exercising its prerogative of choice, Nissan inked a sole-source deal in September 2002 with Siemens AG for VOIP equipment, including the entire line of OptiPoint handsets, ranging from entry-level to high-end models for executives and conferencing-capable phones for meeting rooms.

Lydstons drive to implement VOIP is on two main tracks: one for existing facilities, the other for new buildings. The first to be all-VOIP are smaller, new locations because significant savings—in one case, 12 percent of the cost of the building—have been possible by running only one Category 5 cable to each cubicle or office, instead of running phone wires as well.

However, the savings from VOIP calls for long-distance are not so dramatic that they would warrant a rip-and-replace approach to existing phones. Instead, Lydston said he will replace existing phones as they become outdated or stop working.

Next Page: VOIP fits into collaboration strategy.