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True cost model for VoIP

What is the best way to develop a true cost model for VoIP?

VoIP business cases follow the traditional ROI formula:

ROI = cumulative net benefits / total costs * 100%

As with any IT project, a complete model calculates the total hard and soft costs. Proven metrics and standards are hard to come by due to the infancy of the technology, forcing companies to quantify ROI for their specific organization since comparable case studies likely don't exist.

That said, companies can generate an ROI figure by accounting for the following hard and soft benefits and costs (including risk):

Ways to save for corporations

Hard Benefits

• Eliminate or reduce intra-office toll charges
• Avoiding service and support contracts on existing telecommunication system hardware and software, or fee-based services (like Centrex)
• Reduce expansion costs via lower costs for adds, moves and changes; lower user hardware costs
• Reduce the costs of telecommunications management and support via convergence of resources which can support the network and telecomm systems with an integrated set of less staff personnel

Soft Benefits

• Provide productivity benefits for remote and traveling workers who can be empowered with the same integrated capabilities as office workers
• Reduce user training and learning on phone and messaging systems
• Cost-effectively implement unified messaging for improved productivity handling voice messages, e-mail and faxes
• Reduce systems downtime and improve performance
• Empower call centers with advanced automation, productivity and service applications

Cost considerations

• VoIP telecommunication hardware and software
• IP phone sets or soft phones
• Network upgrades for possible quality of service and performance upgrades
• Implementation labor and professional services
• On-going support and administration labor
• Support and maintenance contracts
• Increased support calls and potential user downtime losses on initial deployment
• IT training
• User training
• Write-off, write-down and disposal costs for existing telecommunication assets
• Potential project risks
• Quality of service / performance
• User training and adoption
• Administration and support skill levels and resources
• Proprietary vs. open systems interoperability

Dig Deeper on IP Telephony ROI

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