May 2007 / May 2007 - Voice Over IP

In the past few years Voice over Internet Protocol (VoIP, or Voice over IP) has been generating a lot of talk in the business world. Like most buzz-worthy technology though, the questions seem to outweigh the answers. In this month’s Tech Brief we’ll discuss what VoIP is and what impact it could have on your business. We’ll also dig into some of the myths and challenges surrounding VoIP as well as provide you with a list of questions to think about if you’re looking to make the switch.

What is VoIP?

VoIP is a category of hardware and software that enables people to use the Internet as the transmission medium for telephone calls. This is accomplished by sending voice data in packets using Internet Protocol (IP) rather than by the traditional circuit transmissions of the Public Switched Telephone Network (PSTN).

There are three types of VoIP implementations available.

• Individual phones for home use through companies like Vonage and Comcast
• Small/medium business deployments which are replacements for key systems
• Enterprise deployments which include advanced features such as call centers and multi-site architecture

How Coud VoIP Impact Your Business?

According to a marketing study performed in 2006 by the Radicati Group; 74% of all corporate telephony lines will be IP-based by 2009. The push towards VoIP for businesses is steadily gaining momentum. Here are just a few of the reasons why so many companies are making the switch:

• Toll Bypassing – VoIP offers cost savings on long distance calls.
• “Looking Bigger” – VoIP can give the perception of a larger, more unified organization. This is due to the ability to route calls to home offices and maintain a consistent, professional response within the organization.
• Unified Messaging – A flexible remote sales force is enabled through email/voicemail integration.
• Application Integration – Increased operational efficiency through improved agent response time and a lower number of databases being managed and improved.
• Move/Add/Change Efficiency – IP phone extension moves and changes are much easier to accomplish. Active Directory allows for easy voicemail integration and account creation.
  1. What type of system should you implement – pure VoIP or hybrid? Some vendors offer pure VoIP systems while others offer hybrid systems that combine digital sets with IP. If you have a legacy system that’s digital you might be better off installing a VoIP module and making a hybrid system. On the other hand if you have an older system, one that can’t be upgraded, or you just don’t like what the vendor has to offer in regards to hybrid systems; switching to a pure VoIP system would make the most sense.
  2. Where will your hardware be located? Local or remote? Be sure your vendor makes it clear whether you are buying the VoIP hardware and keeping it at your site, or just using their hardware remotely. Some companies will sell you just the handsets and a router for your office while performing all call management offsite at their location. If your hardware is remotely located you won’t have to manage it and the overall cost could be much less expensive. But, if your vendor goes out of business or you sever the relationship, you could be out of luck.
  3. What kind of experience / references does the vendor have? – As with any major service/technology purchase, thoroughly research your vendors and ask for a list of references. Make sure the vendor you choose is experienced with all facets of VoIP and has a good reputation.
  4. Will your VoIP solution be converged or unconverged? – A converged VoIP solution involves combining your data and phone network together; unconverged keeps them separate. A converged solution is less expensive since there is one set of hardware to manage and maintain. It also lets you leverage many features and functionalities that you wouldn’t be able to utilize otherwise. But if your converged solution is installed or managed incorrectly, you could end up with poor call quality. If you plan to implement a converged solution, make sure you’re prepared to spend the extra money to do it correctly.
  5. What will the implantation schedule be? - Be sure to ask your vendor how long the implementation will take, if there will be any downtime (and if so, how long it will last), and when your system will be ready. Plan accordingly based on the agreed-upon timelines.
  6. What will the prerequisite network hardware/services entail? – If you plan on implementing a converged solution, your phone system will run on top of on your data network. Is your vendor going to use what you have in place on your network or will they provide it themselves? Will they configure it or will you? We strongly recommend you have your phone and network solutions providers meet face-to-face to work out all these details. It’s much more efficient to get all of the relevant parties in the same room as soon as possible so everyone will be on the same page.

VoIP Myths

As with any new technology, there is a lot of misinformation out there regarding VoIP. Here are some of the most common myths:

Voice Quality/Dependability is Not up to Standards
This was true in the early stages of VoIP (1998-2002) when quality of service was still in its infancy. Back then, standards had not been fully developed and products were still essentially in the beta state. Current implementations of VoIP, if properly designed and implemented, have the same level of redundancy and reliability as PBX (Private Branch Exchange) systems.

Total Cost of Ownership is Greater Than Return on Investment (ROI)
VoIP systems originally were more costly than standard phone systems and therefore the ROI calculation was based on the increased cost for implementation. Current systems cost the same or less than an equivalent traditional PBX system and have the potential to also replace some network infrastructure, further reducing costs and adding efficiencies.

You Need an Internal Support Staff
A wide variety of implementation options now exist, from hosted solutions to fully managed systems. Monitoring and alerting tools are also available to allow full remote support from an outside provider. Whereas traditional PBX systems always required support staff for move/add/change functionality, this is not the case with VoIP.

VoIP Challenges

Although there are a lot of incorrect myths regarding VoIP, there are also some true challenges that you should be aware of before implanting a system.

Bandwidth/Quality of Service (QoS) issues
The single largest current challenge with VoIP is the appropriate analysis, design, and implementation of the network. To realize the full value of VoIP, convergence (data and voice traffic passing over the same network) is key. However, a poorly designed network without proper QoS tools can create network disruptions and invalidate all the potential gains of VoIP.

Features/Benefits are Unnecessary
Like all investments, business owners need to fully understand and educate themselves on what features and benefits will provide real business value versus which ones are just cosmetic or are not applicable to the specific business or market they’re in.

Questions to Ask

So you’ve decided to implement a VoIP system for your business. Before signing on the dotted line you should be sure that you’re getting the right solution for your business from the right vendor. Here are some questions you should consider during your decision making process:

Need Answers?

The transition to VoIP is a major technology decision for your business and as such should be approached with as much information as possible. Thrive has a great deal of experience working with VoIP and phone vendors. We can help you analyze which solution is best for your business. If you have any questions about VoIP, please contact Thrive.