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VoIP vs. LD rates

Is toll avoidance a valid reason to deploy VoIP when LD rates can be found at .025 per minute or less?

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The economic benefit to your company depends on the number of domestic long distance and international calls you make, the level of service you expect from your calling provider, and costs to migrate to a Voice over IP (VoIP) network -- including set-up and training.

In today's tightened spending economy, companies require a solid business case to evaluate the bottom-line value of VoIP. As a side benefit, this will also act as a tracking tool through the implementation, to ensure the company can evaluate and reap the potential rewards of the solution.

VoIP carries great promise to reduce telecommunication and networking total cost of ownership and empower businesses with new capabilities and agility. But because the technology is relatively new, case studies with a quantifiable ROI are difficult to find, and an in-house evaluation is most likely necessary.

Here's an overview of what to look for when making the business case for investment in VoIP technology:

Ways to save for corporations

  • Eliminate or reduce intra-office toll charges
  • Avoiding service and support contracts on existing PBX hardware
  • Eliminate the need for on-going Centrex services -- and charges
  • Reduce expansion costs via lower costs for adds, moves and changes; lower user hardware costs
  • Reduce the on-going costs for separate voice messaging systems
  • Provide productivity benefits for remote and traveling workers who can be empowered with the same integrated capabilities as office workers
  • Reduce user training and learning on phone and messaging systems
  • Cost-effectively implement unified messaging
  • Improve security
  • Reduce systems downtime and improve performance
Additional benefits for call centers
  • Virtualize call centers, allowing more flexibility in the center's configuration -- either helping consolidation efforts, or providing enterprise capabilities to telecommuting call center workers
  • Improve customer support services and reduce abandoned calls and call times
  • Improve customer satisfaction and reduce customer turnover via improved call center services
Cost considerations
  • VoIP telecommunication hardware and software
  • IP phone sets or soft phones
  • Network upgrades for possible quality of service and performance upgrades
  • Implementation labor and professional services
  • On-going support and administration labor
  • Support and maintenance contracts
  • Increased support calls and potential user downtime losses on initial deployment
  • IT training
  • User training
  • Write-off, write-down and disposal costs for existing telecommunication assets
Potential project risks
  • Quality of service / performance
  • User training and adoption
  • Administration and support skill levels and resources
  • Proprietary vs. open systems interoperability

This was first published in November 2004

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