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Top reasons to use VoIP at SMBs: Check IT List

The final VoIP decision: Tom Pisello offers an in-depth analysis of why VoIP can (or cannot) be a good investment for SMBs.

Is Voice over Internet Protocol (VoIP) right for your business? There are many telephony solutions to choose from, and it's very easy to get lost in all of the choices and vendor hype. (See SMB Buying Guide: VoIP.) Indeed, VoIP telephony has some great advantages, but it might not be for everyone. Here are some tactical and strategic tips for deciding if VoIP is for you:

  1. Setting up a new office
    When it's time to set up a new office, it's often easy to go with a simpler and often less expensive analog or private branch exchange (PBX) phone system. But is this the right long-term decision for the business, and does it really cost less? Indeed, analog and PBX phone systems cost less to purchase and are easier to set up than VoIP. But the lower up-front cost is usually offset by higher ongoing change costs to handle growth and business changes, separate management and support costs from the business network, and calling costs. When examining the TCO over the complete lifecycle of the systems, VoIP is typically 10% to 30% less expensive than a competitive PBX system, even though it often requires a higher up-front investment. And this analysis does not include the incremental user features, application and productivity benefits, and agility that VoIP can deliver, providing additional return on investment.

    Action item: Examine the overall lifecycle cost of each option, because the up-front investment is only 20% to 30% of the TCO.

  2. Upgrade required to an existing analog/PBX solution
    Many smaller companies have older phone systems that are barely working or require substantial upgrades to handle the next wave of growth or business reconfiguration. Prior to investing, the cost of the upgrade and maintaining the current telephony system should be compared against the investment and costs of the VoIP system to see which is less expensive over the next three years, and which can deliver the business benefits needed.

    Action item: Make incremental upgrades if maintenance contracts, upgrades, ongoing management and support are more expensive than upgrading to newer technology like VoIP.

  3. Transition from an existing Centrex (Hosted PBX) contract
    To avoid the investment in their own PBX, many small and midsized businesses choose hosted PBX systems whereby the phone system maintains the central hardware and local handsets, support and maintenance (sharing its cost across many similar businesses), and the company pays per user per month for the service and calling plan. For many, outsourcing the telephony system is smarter than managing the technology themselves. However, many of these contracts are old, and companies are paying too much per user compared with newer Centrex contracts or do-it-yourself solutions.

    Action item: Consider a hosted IP-telephony system to replace the existing and often expensive Centrex contract. This allows you to receive the business benefits of IP telephony without having to invest in the equipment, setup, management and support. Certain contracts limit coverage areas, so national companies should check coverage. Also, many hosted IP telephony systems don't have the latest technology that can give the company essential productivity features and application functions.

  4. Multilocation companies with high intra-office call volumes
    One of the basic elements of VoIP is that intra-office calls among company locations can be routed via the IP network, rather than the toll-based phone voice network, avoiding intra-office toll charges. For some companies, 60% of calls and calling costs can be avoided. However, if you consider current calling plans, volumes and patterns, these promised VoIP savings may be pie in the sky.

    Action item: Analyze current calling costs to see if the savings will be real.

  5. Many remote/branch and home offices without local support
    Many current legacy phone systems require that each branch office have its own central hardware, and changes require a physical reconfiguration at the central system. With VoIP, local hardware is often just a network router, and remote users are more easily supported as they are just another node on the network, helping to aid in debugging performance, quality of service, hardware failure or other issues using a wealth of remote network-monitoring and support tools.

    Action item: As nodes, the remote users are easier to support, and the current networking staff can manage the systems. This helps consolidate resources. If there are many users to support remotely, it may be worth a proactive upgrade to VoIP to reduce current telephony management and support costs.

  6. Dynamic environments with high moves, adds and change (MAC) volumes including fast growth, frequent merger and acquisition activities, reorganizations or flexible workspaces
    With VoIP, phone sets can often be relocated by simply unplugging them from the current network port and plugging them into a new port. They don't require central system changes or reconfiguration. Similarly, new phones or sites are often added more quickly because most of the configuration is a simple software click and update or plug/plays.

    Action item: Dynamic environments are ripe for VoIP. High change or growth organizations should proactively consider a switch to help save in MAC labor costs.

  7. Improving worker productivity
    Many organizations have remote workers and mobile workforces that require constant contact with the home office and require that they have similar features from their home offices. Others have high-priced, high-value resources in competitive markets -- where any productivity edge means big gains for the business. Features such as find-me/follow-me and unified messaging can deliver huge productivity gains for the knowledge workforce on the run or looking for the edge.

    Action item: Staffers can often loathe change and new technology. Understand the receptiveness of the workforce to the VoIP phone features, as reluctant users often do not adopt features, leaving the expected productivity gains unrealized.

  8. High audio conferencing usage and/or planned videoconferencing
    Many organizations have employees in many locations, or conduct virtual meetings with clients. VoIP solutions integrate audio and videoconferencing features and make these cost-effective and easy to use, empowering the virtual meeting space, particularly with the easy addition of video.

    Action item: Integrated VoIP audio-conferencing capabilities can have limitations and can tax bandwidth. Weigh the feature requirements against real functions, and take into account the added network capacity tax and expenses.

  9. Setting up or upgrading a call center
    With VoIP, the phone set, PC and various applications can be integrated, delivering better features and function to call center staff. Call centers can be virtualized, often locating personnel in different locations but maintaining or enhancing functionality. Intra-call center transfers can be eliminated, often justifying the investment in organizations with multiple call center locations and high intra-center transfer traffic.

    Action item: Investigate the advanced call center capabilities and how they can reduce current call center costs and improve customer responsiveness and service.

Tom Pisello is founder and CEO of Orlando-based Alinean, an ROI consultancy and software provider. He can be reached at For more information and exclusive access to server TCO analysis tools and white papers, visit

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