The Estimation Of The Expenses and Advantages For The IP Telephony Implementation

benefits of voip over traditional telephony

Cost-Benefit Analysis

While analyzing VOIP service implementation projects, it is necessary to distinguish between common costs and benefits that are the most important for the organizations, and specific only to individual industries or companies.

First, to assess the benefits that the new technology can bring, it is necessary to attract employees who are not IT specialists. The discussion with the heads of departments, managers, and ordinary employees should be initiated to identify existing problems of production nature. Then, with the help of IT staff (or better yet, with the collaboration of producers and technicians), the ways how to use VOIP to solve these problems and, ultimately, improve profitability, increase productivity, or reduce costs should be determined.

Secondly, it is necessary to estimate direct costs of a technical nature – such as the implementation, investment, and training – that will be used to determine the balance of costs and benefits. Define the time period for which the cost analysis will be performed, as well as the depreciation schedule and the percentage of net present value.

The following cost categories should be considered:

Setting up VoIP system and calculating its costs. During the first two years, the actual costs of implementing VOIP at a typical company are approximately 20% higher than the costs it would have incurred in the case of TDM. As experience is gained, these costs are reduced to the level of TDM.

  • Switches. This item includes the cost of purchasing new PBXs for IP networks or refitting existing ones.
  • Telephones/terminal devices or applications. This includes IP phones and softphones.
  • Gateways. Often needed to connect TDM- and IP-networks, if the company does not use SIP-trunking throughout the corporate network (which is rare so far).

Modernization of the LAN. VOIP requires switches powered over the Ethernet; In addition, many companies use uninterruptible power supplies as backup sources. The cost of upgrading the local network is 32 to 46% of the total cost of the VOIP implementation project. (See Figure 2: LAN upgrade costs, page 3.) These figures include the costs for Ethernet-powered switches, UPS, management and staffing, and the cost of maintenance for the first year.

Management/monitoring tools. Many companies make the mistake of forgetting to include the cost of management and monitoring tools in the estimate. The purchase price varies from zero (for open source software) to several million dollars. On average, a small or medium company spends about $ 20,000 for each monitoring tool purchased from third-party suppliers, and a large company – about 200,000.

Training. Many equipment suppliers include the cost of the training course to the price of the product. If it is not included, companies spend from 1 to 5 thousand dollars for the training of one IT specialist; for the training of the end users, the most effective way is the use of their own IT staff.

Licensing and maintenance of equipment. Manufacturers of equipment are increasingly moving to the model traditionally used in software sales – a relatively low selling price with a higher cost of maintenance and licensing. If earlier the cost of maintenance was 10-14%, now it has grown to 16-22% of the price of equipment.

Global network operation. This is the cost associated with using a converged global network. Typically, they include payment for network services, such as MPLS, Ethernet, and/or SIP trunking.

Current operating expenses. This is the cost of network management and maintenance related to the payment of staff. They are made up of the salary of the staff of the company-customer and the cost of services of third-party organizations that serve the VOIP system. It also includes electricity and cooling of the system.

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