UNIFIED COMMUNICATIONS TECH TIP
VoIP management tools: Calculating ROI
Gary Audin
12.11.2006
Rating: -3.57- (out of 5)
|
Return on Investment (ROI) is one of those phrases that get thrown about frequently, but very few people know what it means and what to do with the calculation. When it comes to calculating ROI for Voice over IP (VoIP) management tools, IT encounters some difficult issues: What should be included? Will the ROI be believable? How should we present an ROI calculation? The management tools have to go beyond fault and failure management for VoIP. The measurement of performance and traffic flow is important because a poor-sounding phone call may be as useless as no phone service.
The definition of ROI from www.investorwords.com is: "A measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt. ROI measures how effectively the firm uses its capital to generate profit; the higher the ROI, the better." The first part of this definition is beyond the IT department's responsibility. The second part, maximizing the capital investment, is what the IT ROI should address. An effective ROI calculation will require the IT staff to know more about the operation of the enterprise.
ROI = Perceived Benefits/Value - Anticipated Cost/Investment
In the past, ROI calculations used the reduction of IT staff and associated costs as justification for management tools, according to Richard Whitehead, CTO for C
To continue reading for free, register below or login
To read more you must become a member of SearchUnifiedCommunications.com
larus Systems. "The staff reduction justification was successful and easier to prove." However, he says, "IT staffs have been trimmed to the point where this argument does not work as well anymore."
Staff reduction may be one component for the ROI calculation. Many other factors need to be determined. These benefit factors will be divided into hard dollar savings (relatively easy to calculate), soft dollars (more difficult to estimate), and indirect soft values. The softer the component, the harder it is to calculate. The ROI analysis should cover three years of operation. There will be startup costs in the first year that will not occur in the next two years. The startup costs should be pro-rated over the three years. With the rapid changes in technology, it is difficult to look beyond three years.
Benefits/Values
Cost/Investment
In the final analysis, the more homework you do when calculating the ROI, the more successful you will be when justifying the management tool procurement.
About the author:
Gary Audin has more than 40 years of computer, communications and security experience. He has planned, designed, specified, implemented and operated data, LAN and telephone networks. These have included local area, national, and international networks, as well as VoIP and IP convergent networks in the U.S., Canada, Europe, Australia and Asia.
|
|
|
|
|
|
