The number of decisions that need to be made within a business on a daily basis can be staggering. Some are as simple as the number of reams of paper that need to be ordered for the copier, while others have a much broader impact. Deciding on the provider for IP telephony, for instance, is of critical importance. If you make the wrong choice, business communications feel the impact.
To that end, it’s not always the best approach to select IP telephony providers based on price alone. For one thing, price is not always indicative of the quality of service you will receive. Second, pricing is often one of the most confusing things about making an IP telephony decision. Is the price presented really the price you’ll pay? Is the advertised price really just for tiny companies? Is there enough of a price benefit to warrant making a change to this technology?
Let’s dive in a little deeper and answer some of these questions.
Total Cost of Ownership
You can’t really evaluate the cost of IP telephony without understanding the total cost of ownership. That means you need to take into account the benefits you’ll enjoy, like increased workforce productivity, enhanced business intelligence, deeper customer relationships and freed-up IT resources. At the same time, you also need to consider the upfront costs, implementation costs, operational costs and more.
You’ll need to determine the equipment necessary, hardware that must be in place, maintenance of this equipment and hardware, any managed services offered by a third party, required training and potential certifications. You may also need endpoint licenses for apps, while paying for month per-user subscription fees for IP telephony offered through the cloud.
Bringing in the Numbers
The key challenge to determining total cost of ownership (TCO) is that you don’t necessarily know all of the numbers. You may have an idea of the vendors you’re considering, but even all of the costs associated with their offerings aren’t disclosed to clients until it’s time for contract negotiations. Your best bet is to rely on experts in the field who already assess current offerings and vendors so the numbers you use are much closer to actual figures. Just be careful when using “averages” to determine your costs as highs and lows — this could skew results considerably.
When determining the cost advantages of IP telephony, it’s clear that businesses can achieve significant savings. According to Robin Gareiss, president of Nemertes Research, small businesses can save as much as $218 per employee each year by making the change to IP telephony. Medium-sized businesses can benefit as well, driving as much as $280,000 in savings per year with a new on-premise system. Large companies drive the best TCO swings, with the potential to drive nearly $5 million in savings over five years.
To best determine the costs associated with IP telephony and whether or not a change makes sense for your company, talk with our experts at Copper State Communications. We make it our job to understand the challenges, costs and benefits associated with new communication strategies. We’ll help you determine true TCO so you can make an informed decision.