Many companies are experimenting with IP telephony in branch offices,notes Quigley, adding that it's a low-risk strategy that more shouldadopt.

At the very least, IP convergence should be part of long-term planningnow, says Angus. Most firms should also now be making moves toconvert, upgrade or expand infrastructure to accommodate futureimplementation of converged systems.

"A lot of the things that companies are definitely going to want to dowith IP convergence in 2005, they won't be able to do if they don't makechanges in 2002 and 2003," Angus warns. "If you haven't thought aboutit at all or you've been continually brushing it off, then you've made amistake and you'll be playing catch-up next year."

In fact, only about 40 per cent of companies have started to make themove to IP, and fewer than one per cent have completed the migration,Angus estimates. Gartner Group data also shows a slow migration.IP-capable systems accounted for 10 per cent of new phone system salesin 2001, up from three per cent the year before. They will account for20 per cent this year.

But there is nothing wrong with that, says Mark Fabbi, vice presidentand research director with Gartner Canada. "We think the adoption rateshould be slow. We don't feel there are compelling application reasonsfor doing it right now. Total cost of ownership [compared totraditional telephony] is break-even at best. In the vast majority ofcases the network needs to be upgraded. And IP terminals are not cheap- we're still in a pre-standard environment."