Cutting Costs With a VoIP Business Phone System

8/12/2019 Cutting Costs With a VoIP Business Phone System

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Cutting Costs with a VoIP Business Phone

System

VoIP_News 29 days ago | Comments (0)

VoIP business phone systemsare hyped as a

way for small businesses to cut costs. They aretouted as being more flexible, scalable and

feature-rich than traditional phone systems, for

a lot less money. Is it true? If so, how does it

work?

Cut Costs, Add Value

Basically, VoIP cuts costs because it uses the

internet to send and receive voice calls, rather

than traditional phone lines. Service,

maintenance and upgrades for traditional

telephony cost a lot more than internet telephony. And, a VoIP system comes

packaged with productivity features such as on-the-fly conference bridging that wouldcost extra with traditional telephony.

A VoIP business phone system works the same basic way as a home Vonage

account: desktop phones connect to the internet via a router/server (at home, this is

likely your cable modem; for a business, its an IP PBXeither on-site or managed by

a cloud/hosted provider), and you make and receive calls just as you would with a

traditional desk phone.

The reduced capital and operating costs of VoIP systems are game-changers, said

John Hoag, an IT consultant and associate professor at Ohio Universitys McClure

School of Information and Telecommunication Systems. A VoIP PBX replacement is

a modest expense. VoIP software is often open sourced, and the additional cost forbandwidth is much less than its TDM equivalent.

For a business with an existing commercial-grade internet connection, Hoag

estimated the cost for VoIP bandwidth can easily be 75 percent less than the

equivalent TDM bandwidth.

A VoIP business phone system doesnt just cut costs; it also adds value in a variety of

ways, many of which address the need for mobile communications. For example:

routing calls from an employees desk extension to their cell phone when they are

traveling or out of the office. Unified communications features like integrated inboxes

(voicemail, e-mail and fax) and tie-ins with customer relationship management(CRM)

tools increase employee productivity and support business growth.

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The big step forward isnt necessarily IP, but other features integrated with voice to

make people more efficient and productive, said Michael Finneran, Principal at dBrn

Associates.

So, even if all you can do now is focus on the voice benefits of VoIP, its still a good

idea to enlist the expertise of a phone system supplier or other consultant to look at

expanded communication tools. That way, you can buy confidently with anticipated

future needs in mind.

On-Premise vs. Hosted

A fundamental question that will come up early when shopping for a VoIP business

phone system is: Do we want an on-premise system or a hosted system?

In a nutshell, with a hosted PBX, phones plug into the local area network (LAN) via

Ethernet cables, a router connects the LAN to the internet, and the IP PBX service

provider does the rest. With an on-premise system, a local PBX server box connects

the LAN to the internet and, sometimes, to the public switched telephone network

(PSTN) as well.

For most businesses, an on-premise VoIP phone system has a lower total cost of

ownership (TCO), said Finneran. But, a hosted provider gives you access to new

technology and upgrades immediately, and allows you to get the new system up and

running a lot faster.

With a hosted provider, most money spent on the phone system becomes an

operating expense, Finneran noted. You can rent phones and pay for service, and

have almost no up-front investment. Its usually not practical to totally eliminate capital

expenditure (CAPEX) because of LAN upgrades like adding Power-over-Ethernet

switches and new cable drops, and more or faster routers and firewalls. Still, if the

CAPEX budget is pinched, going with a hosted option may be the best choice.

TCO and ROI

A typical VoIP business phone system requires:

Ethernet local area network (LAN)

Broadband internet connectionIP desk phone for each employee

IP speaker phone for each conference room

On-premise IP PBX or off-site hosted IP PBX provider

VoIP/internet telephony service provider

Uninterrupted power supply (UPS) for all network equipment

The most effective way to determine TCO for these items, and identify cost

reductions, starts with a needs analysis. Then, research options and prices and

choose vendor(s) and service provider(s). The last step is actually purchasing a

system, installing and configuring it, and training staff.

Return on investment (ROI) calculations depend on whether you choose an

on-premise or hosted phone system.

Hoag explained that in the case of on-premise, ROI is calculated by looking at when

the reduced cost of VoIP bandwidth catches up with investment in the phone system.

With hosted VoIP, most of the systems cost shifts to the OPEX side; ROI amounts to

comparing recurring costs now with previous support, annual equipment upgrades,

and phone service.

Bottom Line

With careful research, your new VoIP business phone system should at very least

provide the same voice capabilities as your existing system with a lower TCO. But,


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almost certainly you will also gain value in the form of mobility and other features that

help employees be more productive and better serve customers. The payoff from that

is a gift that keeps on giving.

About the Author

Mae Kowalke is a journalist and communications professional who

specializes in covering business technology. She has written

extensively about VoIP, CRM, ERP and a range of other

technologies, both as a reporter and a blogger.

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Keyword Tags: VoIP; voice over internet protocol; business telephony; VoIP features; VoIP

Venefits; cutting business costs

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Cutting Costs With a VoIP Business Phone System