Making a business case for VoIP

Nearly everybody is familiar with the cost benefits VoIP typically delivers, but there are actually many more reasons for considering a switch from conventional to IP telephony. Ed Tittel outlines what managers need to know in this tip.

Voice over IP (VoIP) refers to a broad mix of technologies that permit existing IP networks to ferry phone conversations

along with all the other kinds of data such networks carry nowadays. Nearly everybody is familiar with the cost benefits VoIP typically delivers, but there are actually many more reasons for considering a switch from conventional to IP telephony, even in companies that operate their own private branch exchanges (PBXs) or other large-scale elements of conventional phone system architecture. Far from just considering the switch, in fact, an increasing number of companies and organizations of all sizes are making or have already switched to VoIP. Recent projections from analyst firms like Gartner and IDC foresee ongoing triple-digit percentage growth in this market for some time to come.

The appeal of VoIP

Cost savings do provide a primary impetus for many of those who end up researching VoIP, irrespective of the decision that results from their efforts. That's because VoIP can help cut costs at nearly every part of the communications path: individual user handsets, phone switching, call processing, voicemail systems and other back-end telephony gear. For many organizations, cutting out long-distance charges and foreign exchange line use for site-to-site communications also has great appeal, because it enables companies to leverage existing (and possibly parallel) data links they already operate. The simplification of the resulting network environment is also desirable, because it allows existing data network infrastructures to include telephony services with their current mix of protocols and services.

The cost of VoIP

Managers should not overlook the costs involved in switching from existing telephone handsets and systems to VoIP replacements. But many are finding that modern VoIP handsets -- which often include built-in multi-port 100 Mbit or Gbit Ethernet switches, firewalls and DHCP and NAT servers -- provide opportunities to upgrade network infrastructure at a modest cost at the same time that replacement phone systems are introduced.

More on this topic

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Topic: Making the VoIP decision

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More VoIP tips

Of course, it's also important to model and plan for the impact of phone traffic on existing IP networks. Voice communications place quality of service constraints necessary to ensuring good voice quality, so it's often necessary to add more bandwidth and upgrade network backbones and infrastructure elements to handle the increased loads voice traffic can bring. On balance, however, most VoIP adopters report modest-to-substantial cost savings from making the switch, even when the costs of amortizing and installing new equipment are factored in.

Productivity benefits

But there's a great deal more to VoIP than just converging voice and data traffic over the same wires. The convergence of the telephone and the PC desktop is perhaps even more compelling to most companies, from a productivity standpoint.

Let's take the popular VoIP application Skype as an example. Indeed, those who call within the Skype network pay for no such calls, but SkypeIn (accepts inbound calls from POTS networks) and SkypeOut (permits placing outbound calls to POTS networks) fee-based services make these phones work just like any other conventional phone (and are competitively priced).

Better still, the Skype environment permits workers to maintain address books that make calling other parties a matter of a few mouse clicks. The Skype desktop also supports instant text chat and file transfers and keeps a log of all activities and interchanges. Most Skype users report great increases in productivity and in the speed at which they can carry out work-related tasks, especially when they communicate with other members of the Skype network. These same advantages accrue within most VoIP telephony applications, including offerings from Cisco, Avaya, Nortel and many others.

Other benefits

There are other, profound benefits managers should consider as they ponder how IP telephony maps into their future plans:

  • IP phones can present arbitrary phone numbers to outsiders, so that sales or inbound call operations can present local phone numbers to customers or consumers, no matter where they may be located.
  • Users and their IP phones can move around inside an organization or on the road. Their phones keep working normally, as long as they have access to a sufficiently fast Internet connection for voice traffic to work. (With most offices, hotels and hotspots running at broadband speeds or better nowadays, this is becoming an increasingly reasonable assumption for mobile staff as well as for staff that moves regularly among organization sites or offices.)
  • Applications that integrate with VoIP are really just getting going; the capabilities mentioned for Skype don't include integrated calendaring and scheduling, contact database integration, or integrated voice/text/e-mail messaging -- but many more powerful commercial systems do include these things.

Deployment considerations

Making the switch doesn't have to be an all-or-nothing proposition, either. Many outfits find themselves daunted by facing a switchover for hundreds of PBXs and infrastructure elements and tens of thousands of handsets. Fortunately, not only can much of the VoIP server gear emulate PBX systems, but VoIP vendors have also bent over backwards to simplify integration of PBX with VoIP in enterprise settings. This kind of capability makes it easy to start with a pilot project, work out all the kinks and make sure all related software, messaging and voicemail elements are working properly, then to enact a phased deployment during the switchover process.

Cisco explains how they made that switch themselves in The Road to IP Telephony: How Cisco Systems Migrated from PBX to IP Telephony (Cisco Press, 2004, ISBN: 1587200880). The book also includes a detailed planning and deployment guide for other organizations interested in working through the process.

Thus, there's a lot that companies and organizations can (and should) get out of VoIP, which makes this particular technology switch worth fighting for.


Ed Tittel is a regular contributor to numerous TechTarget Web sites and the author of over 100 books on a wide range of computing subjects from markup languages to information security. He's also a contributing editor for Certification Magazine , and edits Que Publishing's Exam Cram 2 and Training Guide series of cert prep books. E-mail Ed at etittel@techtarget.com.
This was first published in November 2005

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