Business VoIP Telephone Systems – Cost Effective?

Cost-effectiveness is a term that is rarely discussed when talking about business VoIP phone systems.

Most vendors like to advertise how inexpensive their plans are when compared to regular business telephone systems but low prices don’t necessarily equate to cost-effectiveness, especially for business organizations.

So makes a difference between low-cost and cost-effective solutions?

Cost Versus Cost Effective

Suppose an organization can purchase a piece of equipment for say $50. It might appear to be cheap but if the build quality is so poor that the device has to be replaced every six months, it is not actually cost-effective.

There may be multiple processes required to initiate purchase, track repairs and maintain documentation and all these costs add up. It might have been better for the business to purchase a more expensive device if it lasts longer.

The same principle applies to purchasing software, communication systems or any other equipment that a business requires. Apart from the initial cost of purchasing IP phones and the monthly subscription price, there may be other costs involved in switching over to VoIP.

If an organization does not account for these costs in the budget, the new system may appear to be much more expensive than initial estimates.

That being said, the threshold for cost-effectiveness will differ between companies. For a business that is struggling to stay afloat, the actual cost may be more important than the overall cost-effectiveness over the lifetime of the solution.

In general however, most organizations want to make decisions that serve the long-term needs of the company.

Hardware and Service Costs

For businesses that choose to go with hosted VoIP subscriptions, calculating hardware and service cost is pretty simple. The total cost will depend on the number and types of phones since IP devices can cost anywhere from $50-$500 each.

Quite a few businesses find that they can save money by allowing employees to use mobile VoIP clients and/or dedicated headsets with their computers. This way, there will be no need to purchase brand-new phones for every desk or employee.

Similarly estimates regarding the cost of service will be provided by the vendor, so there is not much to calculate there. In addition to these more obvious charges, the business may incur other expenses when transitioning to VoIP systems.

Network Costs

Hosted VoIP requires high-speed Internet, sufficient bandwidth and reliable networks. Not every business will be able to get started with VoIP on their existing infrastructure and some will be required to upgrade their Internet speeds or network hardware to support more traffic.

This is where the nuances of cost and cost-effectiveness come into play. When comparing VoIP with regular phone service, the former might appear to be inexpensive. But if the business has to spend thousands of dollars in upgrading their network, the costs might be more similar.

On the other hand, suppose the business is already scheduled to upgrade their wireless and wired networks, postponing VoIP implementation to coincide with that can make the project more cost-effective.

Sometimes when and how the organization implements VoIP can influence the total cost of the new system.

Training and Tech Support Costs

If the workforce consists of mostly younger employees, a business may not incur much expense for training. But sometimes, training is necessary particularly if the VoIP system is part of a bigger project like unified communications.

The same applies to tech support as well. Some vendors have extensive online resources and provide free seminars to clients. On the other hand, alternate forms of support may be more expensive.

As we can see, all these factors will determine the true cost-effectiveness of the new VoIP solution. To determine the cost-effectiveness of VoIP, the business must consider more than just the initial start up expenses.