Is Your Company Ready for Internet Phone Technology?

By now you have probably read about Voice over Internet Protocol (VoIP), a technology that allows you to make and receive calls over the Internet instead of via regular phone lines. While some technology-savvy individuals have been using this technology for nearly 10 years, improvements in quality, reductions in price and some incredible features are leading many businesses to make the switch to a VoIP system.

In fact, according to the Federal Communications Commission, 2% of U.S. businesses currently use some form of IP telephony, and this number is expected to grow to 19% by 2007 as more companies realize the positive impact that VoIP can have on their business. Understanding the benefits and the drawbacks of IP phone systems versus traditional, analog-based phone systems is important before deciding if an IP phone system is right for your company.

The Benefits

When asked to identify the most important benefits that VoIP services provide, almost every business owner places cost savings and increased productivity at the top of the list.

COST AND TIME SAVINGS:

In addition to reducing your phone bill in most cases, VoIP can typically save businesses money in a number of ways. For instance, whereas analog phone systems require separate voice and data lines, VoIP allows for a single network to run both voice and data, resulting in lower costs. And since adding or removing users and other changes can be done by the customer or by making a simple support call, your business saves time and money by eliminating on-site technician visits. On top of that, you can keep your existing telephone number.
Before switching to an IP phone system, Property Resources Corporation (PRC), a New York–based real estate management company, encountered frustration whenever it wanted to add employees to its phone system. The old, traditional system required them to call an 800 number in Houston, Tex., and wait 24 hours for someone to be dispatched locally. Now they call a local number for the same task and the new numbers are added within a matter of minutes.

PRODUCTIVITY:

Many organizations have significantly increased their productivity through enhanced features available through VoIP technology, such as a centralized phone system for multiple location businesses, remote access for telecommuters, softphones (software that allows calls to be placed and received through a laptop or PC), Web access to voice mail and “Locate Me” features that allow several numbers to ring either all at once or sequentially. If, for example, an employee is away on a business trip, he can simultaneously check his e-mail and his voice mail on his laptop as well as view, play and save his voice mail from any broadband-enabled computer. An employee can also set up a business phone in her home with all the functionality of the VoIP system, allowing her to dial a four-digit office extension from her summer home in the Hamptons, for example. Executives and mobile sales staff especially find these tools to be useful because they can operate their office phones from virtually any location with broadband Internet access or reroute calls directly to cell phones, so that they never miss a call and always remain accessible to clients and colleagues. PRC’s president, Frank Linde, notes “Our staff must be available at all times to ensure rapid response to client requests. With an IP phone system, not only can our staff reach each other instantly, but our clients can reach us instantly as well.”

The Drawbacks

Although the reduced operating expenses and increased productivity associated with adopting an IP phone system have the potential to significantly reduce costs for organizations

over time, purchasing an in-house IP phone system can cost hundreds to thousands of dollars per person for business-grade equipment and service. Depending on your current office network design, you could wind up spending additional money and time addressing concerns such as proper wiring, sufficient availability of power sources, and a stable network configuration before installing an IP phone system. Typically, a business with fewer than 10 employees may not find it worth it to go to a business grade VoIP system. Also, while technological advancements have greatly improved the sound quality of IP telephony — to the point where it is virtually indistinguishable from a regular call — there remains a perception that IP phone systems still have lower call quality.

Companies that use the “public” Internet may have some quality problems, but those that use the private, dedicated networks that businesses typically use will not.

OPTION — OUTSOURCING YOUR IP PHONE SYSTEM:

For companies that want to avail themselves of the benefits of a VoIP phone