The digital revolution has altered our lives in many ways overthe last 20 years. Some of the most profound changes have occurredin the workplace, transforming even the meaning of the term“workplace” itself.

Twenty years ago, nearly everyone in the insurance industryworked in a business location, even though their responsibilitiesmight frequently take them out into the field (i.e. producers,company marketing representatives, claims adjusters).

For most of the last 20 years, the major stumbling block forthose who wished to work from home has been the telephone. Mostbusinesses and individuals do not want personal home telephonesused to transact company business or to incur the costs andintegration complications of installing a business line in employeehomes.

But today, a significant and ever-increasing percentage of theAmerican workforce is working from home (or anywhere with abroadband Internet connection) on a full- or part-time basis. Amajor reason: web-based telephone service. Agents/brokers and theirstaffs are joining the ranks of remote workers in growingnumbers.

How did this trend get started? In 2003, Skype introduced aproprietary voice-over-Internet-Protocol (VoIP) service to allowsubscribers using a computer and Internet connection to make phonecalls with an online number. In January 2006, Skype added videoconferencing for its nearly 100 million users and, in May 2010,Microsoft bought Skype (and access to its then 750 million users)for $8.5 billion. Those numbers show that VoIP had captured thepopular imagination.

Meanwhile, mass-market VoIP services were being deployed byother vendors using existing broadband Internet access and allowingsubscribers to place and receive telephone calls in the same manneras they do via the public switched telephone network (PSTN). Today,full-service VoIP phone companies provide inbound and outboundservice with direct inbound dialing, call waiting, call forwarding,conference calling, and voicemail with optional email forwarding.Many offer unlimited domestic calling for a flat monthlysubscription fee, and some include international calls to certaincountries. Phone calls between subscribers of the same provider areusually free when flat-fee service is not available.

There are three options for connectivity to VoIP telephoneservice providers:

1. Dedicated VoIP phones designed in the style of traditionaldigital business telephones that connect directly to the Internetusing ethernet or wi-fi
2. An analog telephone adapter converting a conventional analogtelephone to allow it to connect to the Internet through a modularphone jack
3. Application software (i.e., a softphone) installed on acomputer attached to the Internet, which is equipped with amicrophone and speaker or a headset.

VoIP has many benefits, including advanced features that are notavailable from the PSTN, but its single biggest advantage is costsavings. Some of these benefits are:

• Phone numbers correlated to given locales no matter where youare located
• Plug-and-play connectivity: Your phone numbers move with yourphones
• Phone calls routed over a single network, without the need forseparate voice and data
• You can transmit more than one phone call over a singlebroadband connection
• Phone conversations can be secured using standard protocols(i.e. SRTP, or secure real-time transport protocol).

VoIP telephone services do have some challenges; notably, theymust be properly configured to deal with quality-of-service issuesand susceptibility to power failures. By contrast, these are notissues with which PSTN analog telephone services have a problem.Also, the nature of VoIP makes it difficult to locate callersgeographically; so emergency calls cannot easily be routed to callcenters and 911 support may not be available.

Even with the challenges, VoIP has undeniably become amainstream solution. My firm, for instance, works with agents andinsurers daily who mail their work-at-home employees an IP phoneand begin transacting business with them immediately. Their serviceon the corporate phone system is indistinguishable from theirin-office peers and the costs savings are compelling.