Choosing a VoIP vendor: A buyer's guide
A collection of articles that takes you from defining technology needs to purchasing options
Editor's note: The first article in this series provided a detailed explanation of what Voice over IP (VoIP) is and how it works. This article examines three major use cases that highlight the benefits of VoIP. Future articles will explore how to buy a VoIP system and which service would best match your organization's needs.
Once a business realizes VoIP's potential, many questions may be raised -- not just about the technology, but also its business value. New technology usually implies risk. But in the case of VoIP, that concern should be nominal.
While many businesses are still learning about the benefits of VoIP, the technology is mature enough to replace legacy telephony. This consideration is important since the underlying time-division multiplexing (TDM) technology has served businesses so well for so long.
When understanding the need for VoIP, this history is relevant because the bar was set so high. TDM is expensive, but delivers outstanding quality and reliability. For IT departments, TDM does not pose any major network challenges, and for management, the business case has to be strong to consider replacing something that works so well.
Migration to VoIP usually requires a breakdown in an organization's telephony -- either a system failure or a capacity limit. In this scenario, keeping the phones running usually trumps other needs. But in most situations, three common VoIP use cases drive the migration.
VoIP use case #1: Reduce telephony costs
Curbing costs is the standard use case for VoIP, resulting in savings of approximately 20% to 30%. Enterprises usually switch to VoIP as a cost-savings measure for two reasons. First is a specific need to cut telephony costs, especially as free or near-free services like Skype become more prevalent in the enterprise. Second would be a broader mandate from management to reduce operational costs, in which case anything under IT's domain would be fair game.
Moving to VoIP will address these objectives right away, but longer term, the magnitude of savings will diminish. Businesses will realize immediate savings for the service itself, as the monthly line rate will be less than TDM, and many enhanced features incurring additional charges with standard telephony are included free with VoIP. Furthermore, with VoIP, domestic long-distance calls would essentially cost nothing and international calls will certainly be less.
Economically, this adds up to bottom line savings, but that must be contrasted with the overall cost of migration to VoIP. On the plus side, notable cost reductions exist with network convergence, where telephony traffic shifts from the dedicated voice network to the data network. Migration to VoIP also has the potential for hardware savings, as the cost of IP-based phone systems and handsets will be less than continuing with legacy systems.
However, there may be hidden costs with network upgrades to support VoIP on the LAN, and possible penalties for ending existing contracts with telephony vendors. Enterprises upgrading from a legacy telephony system to a VoIP setup would need to expand their network capacity to carry voice traffic and possibly add SIP trunks.
Furthermore, new network management capabilities would be necessary to prioritize voice traffic and provide appropriate VoIP security protection. Finally, the organization would need VoIP-specific network infrastructure such as media gateways and session border controllers. Overall, lowering costs can be a solid use case for VoIP, but only if the switch is made with these factors in mind.
VoIP use case #2: Hit the refresh button
Businesses cannot stay competitive with legacy technology, and VoIP can be a catalyst for change. On a functional level, legacy technology may be reaching its natural limits, forcing enterprises to replace their aging TDM systems. Typically, businesses have a telephony environment that works well, but only for its intended purpose. However, once employees adopt new technologies on their own, legacy telephony usage falls off.
Compared to other voice modes -- either Web-based or mobile -- TDM cannot support the way people communicate today. Mobile work styles are becoming the norm, and employees cannot be truly productive when tethered to their desk phones. While VoIP is still emerging on mobile devices, PC-based modes are common and can go a long way to supporting employees working away from their desks.
Furthermore, employees increasingly rely on other Web-based modes such as email, chat and video, and VoIP natively integrates with these, whereas TDM cannot. As the drop-off in desk phone use becomes more evident, the benefits of VoIP for business are clear.
A more strategic use case is the overall network environment. Unlike legacy telephony, VoIP is not a standalone application. Beyond supporting real-time voice, VoIP adds value by integrating with other data applications over the LAN. This takes VoIP to a higher level, where voice can seamlessly mix with video and text-based modes, not just for internal communication, but when dealing with customers as well.
VoIP also provides businesses with the opportunity to migrate their phone management to the cloud. Legacy telephony has been managed on premises, but hosted options based in the cloud are gaining favor for VoIP, which may lead to a broader type of technology refresh. Cloud-based services further expand VoIP's versatility.
Businesses may not see these possibilities until they take a deeper look at VoIP -- and when that happens, attention will shift to the network, raising new questions about how best to support all this. Rather than simply updating an existing telephony system, VoIP can lead a business to look at a broader technology refresh, especially around the investment needed to deliver these capabilities.
VoIP use case #3: Improve productivity
This use case builds on the previous one, but can also stand on its own to support a VoIP buying decision. Here, however, the focus is on employees rather than what's best for IT and the network.
For most businesses, productivity is subjective, so the use case is difficult to quantify. Metrics do exist for this, but they are not widely used outside the contact center. VoIP can make employees more productive in various ways.
Two prime examples would be visual voicemail and ad hoc conferencing. VoIP provides email alerts with MP3 audio files for voice messages, making it easier for employees to manage missed calls from anywhere. With today's dispersed workforce, ad hoc audio conferencing enables collaboration in ways that TDM could never support.
The real-time nature of voice makes collaboration more efficient when compared with near-real-time applications such as email or chat. When businesses make productivity a cornerstone of becoming more competitive, this VoIP use case will become self-evident for management.
Think short and long term
VoIP isn't the only way to boost employee productivity, nor is it the only reason to upgrade the network, but the use cases can be very strong. This largely depends on whether the decision to switch is driven by IT or management. The overall takeaway is VoIP can provide short-term and long-term strategic benefits for the organization.
Thinking about VoIP strictly as a vehicle to save money is a valid driver, but a narrow one that undermines the bigger picture value proposition. Businesses had no reason to think this way with standard telephony, but they do with VoIP. Throughout the rest of this series, we will outline the factors to consider -- including the benefits of VoIP -- when making a purchasing decision.
Learn some best practices for migration to VoIP.
Determine the best way to transition between PSTN and VoIP.
Strengthen your VoIP infrastructure.
Jon Arnold asks:
Does your organization face rising costs from legacy telephony?
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