The IP Multimedia Subsystem (IMS) is the basic network architecture for Next Generation Networks (NGN) which is intended to bridge the divide between the traditional circuit switched and packet switched networks, thereby providing a single network capable of providing all service offerings. IMS is based on the IP infrastructure and it enables the convergence of data, speech and video on the same network platform. The IMS forms the basis of Fixed Mobile Convergence (FMC), where fixed-line operators are striving to provide mobile access and mobile operators are trying to provide fixed access. This is done to provide both services to a customer in a single device. The IMS is based on Session Initiation Protocol (SIP), which is a text-based protocol. The IMS will generally create additional signaling traffic in the IP based networks, so there is a need to take necessary precautions to minimize the signaling overload. This research is based on how the performance of the IMS can be improved by optimization of SIP as well as IMS elements. An analysis and characterization of the signaling traffic generated by IMS has been performed and how the signaling traffic can be reduced by the compression of SIP using the Burrows Wheeler Transform (BWT) has been explored. The queuing models of the IMS have been formulated and the mathematical approach has been used to find the impact of implementing the Hyper-Threading technology on the IMS Elements.