Q

What are some good ways to measure VoIP ROI?

Learn some good ways to measure VoIP ROI from expert Jon Arnold.

What are some good ways to measure VoIP ROI?
This is a good question in the sense that the answer is easy, and it has more value in terms of understanding how VoIP actually provides value to a business. ROI is usually associated with hardware or products, and often involves a capital expenditure. The product being purchased is costly enough that it will have a long lifecycle, over which time the business will derive utility (a return), eventually reaching the point where the utility equals the cost of the investment, hence the return on investment. ROI is usually measured in years, but as telecom offerings have evolved from costly hardware to less costly software, ROI cycles are now shorter, and measured in months.

The ROI metric does not really apply to VoIP in isolation, since it is a pure service. There is little upfront cost and rarely any capital expense to deploy VoIP, and as such, it really isn't an investment. The benefit of VoIP is primarily based in lower telephony costs, and there is no investment element to speak of. To gauge the value of VoIP, the metrics are tied to the monthly savings in telephone expenses -- long distance, a la carte features, MACs, etc. These are usually expressed in percentage terms compared to what the business was spending previously. It is not unusual to hear of businesses reducing their monthly telecom costs by 20% or more when using VoIP.

These explanations of VoIP and ROI are quite basic, but are worth reiterating, as VoIP is often used interchangeably with IP telephony. They are distinct elements for businesses transitioning from TDM, and sometimes VoIP is considered part of an IP telephony solution. However, the distinction should always be kept in mind – VoIP is a service, and IP telephony usually refers to the hardware and/or software used with a VoIP service.

This was first published in August 2009

Dig deeper on IP Telephony ROI

Pro+

Features

Enjoy the benefits of Pro+ membership, learn more and join.

Have a question for an expert?

Please add a title for your question

Get answers from a TechTarget expert on whatever's puzzling you.

You will be able to add details on the next page.

0 comments

Oldest 

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to:

SearchMobileComputing

SearchNetworking

SearchTelecom

SearchITChannel

SearchEnterpriseWAN

SearchExchange

Close