The situation is a long way from that now, but Li, CEO of Pionic Technology, is working hard to change that.

“Right now, if you are a small business you have to call the phone company to install your telephone service and hire an IT company to come in and set up your computers,” he said. “Data and voice are two separate networks and managing access to the services requires a lot of technical expertise that is over the heads of many small business people. That’s why it is so expensive.”

Pionic provides a network access infrastructure that lets small businesses manage communications services efficiently. “A lot of people provide communications services,” said Li. “The problem, and the expense, comes in managing the services. Our solution lets small businesses manage those services using a simple interface with technology that lowers both direct and indirect costs.

“If you are a small business with five people, you could wind up with eight or more phone lines,” he said. “Incoming calls, outgoing calls and internal calls use up phone lines quickly. With our solution, for a five person office, you might need only two incoming phone lines, but we could provide you with unlimited internal and outgoing lines.”

Li cited one customer, a travel agency, who was able to dramatically reduce their costs with Pionic technology. The agency, with six offices across North Carolina, had 32 separate phone lines among the offices. “We were able to reduce their lines to fewer than 20,” said Li, “and elevate the level of service. We were able to offer them auto attendant, voice mail, call query, interactive voice response, and call prioritization services while reducing their per minute line charges from four cents per minute to two cents per minute.

“Those services are expensive to implement with traditional service providers, but Pionic technology can provide them easily and inexpensively.”

Pionic resolved several issues for the agency that not only saved them out-of-pocket dollars, but also improved their operating efficiency and customer satisfaction. Prior to the Pionic implementation, calls to a local office would ring busy if all agents were on other calls. With the Pionic system, calls are automatically routed to other offices if no agents are available locally.

The Pionic system also prioritizes incoming calls and routes them to the most productive agents, notifies customers how long they will be on hold if they are waiting for a designated agent, and allows in-calling customers to choose between an English, Spanish or Chinese speaking agent for service “This was important because they had three distinct customer segments,” said Li, “and both the customer and the agent were at a disadvantage when, for example, a Spanish speaking customer tried to communicate with a Chinese speaking agent.”

The Pionic system was able to offer a further cost savings, and an added convenience, by making all inter-office calls internal calls, accessible via a four digit extension.

“They were paying long distance charges every time they called between offices,” Li said. “Now, calling from the Raleigh location to the Charlotte location is like dialing the office next door.”

Pionic is able to offer customers these savings because their technology receives incoming calls via a standard carrier line, but it reroutes the calls through the Internet using VOIP (voice over internet protocol) technology. While this technology is not unique to Pionic, Li noted that Pionic’s approach to the technology is unique.

“With Cicso or Nortel, you have to spend a lot of money to buy into their Internet telephony system,” said Li. “We designed our system to use the customer’s existing telephone equipment. If you are setting up a new office, you may decide you want a $200 or $300 phone. But in most situations, a small business will want to use their existing phones. They just want them to work more effectively.”

Pionic started in 2004 when Li and former classmate Dong Zhou got together with two colleagues and began analyzing the market for business opportunities. They identified a weak link in small businesses’ ability to manage access to communications services and discovered that it was a market that was not being served.

“We did a lot of preliminary research and found that the big companies like Cisco and Nortel realized that small businesses were a market, but they were focused on larger businesses to maintain their profit margins,” said Li. “They work for companies with 10,000 employees to 5,000 employees to 1,000 employees. Our business model is to serve lots of smaller companies. Our customers are companies with five to 10 to 25 employees.

“There are 7.5 million companies in the US and 80 percent of them have eight or fewer employees. Most of them don’t have the technical expertise to manage their own communications services in the current environment.”

Once they identified small business as their primary target, they analyzed the needs of various businesses and crafted offers they could take to potential customers based on industry segments.

“We have a pretty good idea of what is needed and we are in the process of proving it out with customers,” said Li. Pionic is refining its offer for individual market segments, such as agent-based businesses like travel agencies and real estate agencies, and professional services businesses like law firms and medical practices. As they implement solutions for individual business, they are perfecting the service mix that each sector needs.

“Our goal is to take the technical expertise of IT and telephony professionals and put it in a box that provides the features small businesses need to easily manage their communications services,” said Li. “So instead of having to buy a telephone switch and a router, and instead of having to call the telephone company or an IT company every time you need to adjust your service, you just buy our box.”

And the Pionic box is where Li hopes to realize his goal of making communications services as transparent as television for the end user.

“Our goal is to provide a simple device that is inexpensive,” said Li. “Something you can buy at Best Buy or Circuit City, plug it in and go about running your business. We want it to be so simple you don’t even need a manual in the box. And it will provide your router, VPN, switch, firewall, PBX – anything you need to run your business with a simple interface that is easy to manage.”

Pionic offers several related products, including: CD Phone, a mobile solution that literally lets you carry your voice and data services on the road when you travel, and the Pionic Sense-All Sensor Network, a remote monitoring system.

Pionic got its start in the Technology Incubator at NC State University’s Centennial Campus. Li, who has two degrees from NC State, says it was a good environment for the fledgling company.

“It was good for us not only because it provided a technical environment in which to develop our products,” he said, “but also because we were in the middle of a group of small, growing businesses. We were able to observe their needs and offer solutions to other companies in the incubator.”

Pionic is transitioning its offices out of the incubator so they can bring on more employees. “The incubator’s success really comes when a company leaves,” said Li. “If a company doesn’t outgrow the incubator, it hasn’t achieved its potential.”

The company is moving to a North Raleigh location that provides space for hundreds of small businesses. The move will not only allow them to hire more people, it puts them in the middle of their target market.

“The first day we moved in, our neighbor was moving to a new office and they had a problem with their phone system. We discussed it and they said, hey can you guys set it up for us? So the first day we were there we got our first new business. That’s why we moved there. We want to be as close to our potential customers as possible.”

Pionic currently has five full-time and three part time employees, and they expect rapid growth.