Is a VoIP Phone System Right for Your Company?
Many companies begin their VoIP phone system search without really understanding that the perceived cost savings, with some additional system features, alone are not reason enough to upgrade or invest in this technology. To better understand some of the ins and outs of this technology, we've answered some frequently asked VoIP questions below:
- Why is it called VoIP?
- VoIP is an acronym for Voice over Internet Protocol.
Internet Protocol (IP) is the transmission standard or protocol that controls the routing and structure of data as it is sent from one computer to another on the Internet. Each computer (known as a host) on the Internet has at least one IP address that uniquely identifies it from all other computers on the Internet. When you send or receive data, the message gets divided into data packets. Each of these packets contains both the sender's Internet address and the receiver's Internet address.
- Without being overly technical, what does Internet Protocol do?
- IP specifies the format of the data packets and the IP addressing scheme. Most computer networks combine Internet Protocol with another transmission protocol called Transmission Control Protocol (TCP).
IP by itself is something like the postal system. It allows you to address a package and drop it in the system, but there's no direct link between you and the recipient. When combined, TCP and IP (known as TCP/IP) establish the virtual connection so that messages can be sent back and forth.
- How does Voice over IP work?
- The premise behind Voice over IP is fairly straightforward. Instead of using circuit-switched technology, where a dedicated path from caller to receiver is reserved for their entire conversation, VoIP phone systems treat voices as data, turning your words into tiny packets of information that are sent over data networks. As they arrive at the other end of the call, the data is turned back into audio.
To set up a business Voice over IP system you need several components. A central device manages the calls, the way a private branch exchange (PBX) or key system (KS) does in traditional phone systems. This can be a dedicated piece of hardware such as an IP PBX, a regular PBX that has been IP-enabled, or a server running specialized software.
You will also need phones and a data network. In many cases, you may be able to use your existing digital phones and computer network, although you may need to upgrade some of your network hardware.
Depending on your Voice over IP setup, internal calls are routed over your existing phone network or your computer network. Calls within the same office will typically be conveyed over your phone network, while calls to other company locations get routed over your computer network. Calls to external phone numbers get sent through the network to a gateway, which connects to the public telephone network. All of your calls connect seamlessly to any phone user - there are no compatibility issues to worry about.
- How can a company derive a positive impact from a VoIP phone system?
- There are various situations where a VoIP phone system can make a positive impact on a company.
If your company has multiple locations - branches, telecommuters, remote sales offices - that are already connected to the company's Local Area Network (LAN) or Wide Area Network (WAN), you are a prime candidate for a VoIP phone system.
You can share the full features of your phone system across all your locations. In addition, if you have an office in Toronto and one in Montreal, VoIP allows calls between them via extension dialing, making it a free call. For businesses with expensive monthly long distance charges due to calls between locations, this can be a very attractive reason to implement a VoIP phone system.
It can also save money at the time of setting up a new office - you can save the cost of running separate voice network for your phone system.
However, if you are setting up a new data network anyway, adding a parallel voice network at the same time is relatively cheap so the cost savings here might not be as large as you expect. In many cases, the best solution will be a system that uses existing digital phones within the main office and VoIP technology for calls between locations.
This combination of digital and VoIP technologies (commonly referred to as a Hybrid system) works well if you have a relatively new phone system - many new phone systems can be IP-enabled with software upgrades and minor hardware additions. Sticking with digital phones internally will save you money, as well as increasing the overall reliability of your phone system.
Most businesses fail to realize that they can install a new, lower-cost, digital phone system, and initially use only digital telephones, and later have it upgraded to support VoIP telephones.
- What are some of the features and benefits of a VoIP phone system?
- The single biggest advantage of VoIP is for businesses with multiple locations. With VoIP, any and all offices on a LAN or WAN can get the benefits of having a common office phone system, including extension dialing, seamless call transfers, and other features.
In addition to making it easier to communicate, this sharing of features can enhance collaboration as employees at different locations can truly feel like they are part of the same organization. Plus, if they are on the company network, the phone calls are free - even if your offices are located hundreds or thousands of miles apart.
Simply looking at your current phone bill for calls between far-flung offices can give you an idea of how much you can save. There are other cost savings that stem from the streamlined network infrastructure and improved administration.
For network administrators, VoIP means they only have one network to maintain instead of two. There is still separate phone system hardware to maintain - but only one network.
The Move, Add, Change (MAC) process also is greatly simplified, because almost all VoIP systems are configurable through a web interface that can be managed by the administrator.
This means lower ongoing costs - you will not need to call your supplier for every MAC. And because multiple offices are seamlessly connected, they can share a single receptionist, auto-attendant, and voice mail system.
Another significant benefit is for employees on the go. If remote users connect to the company network via a Virtual Private Network (VPN), VoIP allows them to make phone calls from the road at no extra charge.
One salesperson on an extended trip can save hundreds of dollars in mobile phone or hotel long-distance charges. All the user needs is a "soft phone" (software that lets a laptop function as an IP phone), a PC microphone, and speakers.
Other familiar and essential phone system features - like caller ID, call forwarding, simultaneous ringing across multiple phones, and other features you would find in PBX systems - are available in most VoIP systems.
VoIP also works with advanced Computer Telephony Integration (CTI) applications, such as call centre management. These popular applications can prioritize incoming calls based on the caller's identity and automatically open callers' account information as the phone is answered. However, there is little difference in this arena between VoIP and modern digital phones.
- What are some of the potential drawbacks of a VoIP phone system?
- The two main drawbacks to a VoIP phone system are a) the network requirements and b) the potential for outages.
Network demands
One challenge to achieving call quality is available bandwidth: high quality sound requires quite a bit of it.
The technology to compress audio and then to reconstruct it has improved to the point where VoIP sound quality over a high-bandwidth connection is as good as or better than that of regular phones. But some networks that are fine for existing data traffic are not up to the demands of VoIP.
Computer networks are designed to handle messy data-packets that arrive out of order, with some even lost, but in most cases the data packets being sent can easily be reconstructed before they are needed. However, voice conversations (packets) are not as tolerant to these kinds of disturbances.
Each packet of sound has to arrive in the correct order because they are being sent in real-time. If any voice packets are lost or out of order, the conversation sounds distorted, clipped, or disconnects. This is why VoIP conversations that rely on the Internet for transmission can have an uneven phone quality.
If your company plans to route external VoIP traffic over private data networks, much of this potential problem can be avoided.
Companies investigating VoIP phone systems typically have existing networks suitable for high-quality voice conversations. Frame Relay networks are ideal, but standard Ethernet networks also work well. However, an existing network might need to be enhanced with Quality of Service (QoS) application equipment.
QoS application equipment maintains a dedicated amount of bandwidth for voice calls by giving voice packets a higher priority as it is trafficked through the network. If there is network congestion, VoIP voice traffic is routed through first so call quality does not suffer. QoS applications are built into some VoIP phone systems, as well as some routers. They can also be purchased separately as upgrades.
Attempting to route VoIP traffic on a company network without QoS is a risk no business should take.
If you have an existing Wide Area Network (WAN) that routes data over the Internet, you can attempt to route VoIP traffic, but there can be no guarantee with respect to the quality of service. Internet call quality can reportedly be improved if the various offices use the same Internet service provider.
Outages
Unlike digital phone systems that get set up and basically forgotten, VoIP phone systems require more attention. Like any software application, your VoIP phone system server will require occasional upgrades and maintenance.
Since digital phones receive all the power they need from the phone system itself, they continue to work if there is a power outage and the phone system has a separate uninterruptible power supply (UPS) or an internal battery (as is standard with all NEC phone systems). In contrast, VoIP phones need to receive their power from a source other than the VoIP phone system to work.
Companies that have backup power systems in place can keep their digital phone system running even if the data network is unavailable.
By definition, VoIP phones are also network-dependent. For those companies, where phone service is absolutely critical, this can be a concern since computer networks can occasionally be brought down by a server crash or other problem. However, competent IT staff can prevent most outages with sufficient back-up equipment in-place and react quickly when a network outage occurs.
The risk of a potential network outage is the main reason many companies with a VoIP phone system implement a mix of digital and VoIP phones throughout their office. This approach provides some security with comfortable level of phone set redundancy.
- What else should be considered before purchasing a VoIP phone system?
- The rapidly maturing VoIP phone system industry means that there are many manufacturers with feature-rich systems that may be enticing to small firms.
Selecting a qualified distributor
Buying a VoIP phone system from a local distributor is the best choice for most companies. Typically, licensed, certified distributors have proven expertise, manufacturer support and the ability to respond quickly to urgent problems that require a site visit.
Checking that the distributor has manufacturer support is particularly important when buying a VoIP phone system -- this can be critical as upgrades are released or problems crop up.
Some distributors, particularly those whose background is in data networking, sell VoIP-only phone systems. This can drive up your upfront and ongoing costs unnecessarily when a Hybrid (digital/VoIP) phone system might be best for your needs.
Also, watch out for distributors that simply add VoIP to your existing data network whether or not it is fully ready to support voice traffic. They may later charge for network upgrades, should it be determined the VoIP call quality falls short of your expectations.
Completing a network analysis
Most importantly, ensure you request and receive a thorough analysis of your existing data network and a report on the potential impact VoIP traffic will have on it. This analysis should provide an appreciation of any future costs associated with enhancing the network for VoIP traffic.
VoIP pricing and implementation
VoIP phone system prices vary based on the features you require, your existing telephony infrastructure, and the state of your data network.
Do not be tempted to do it yourself - setting up and maintaining a VoIP phone system of any type requires specific expertise. There are many distributors that customize, install, and maintain VoIP phone systems.
Re-using existing phone equipment
Once you have decided that a VoIP phone system is right for you, the next step is to determine what of your existing telecom equipment you can keep, if anything.
Many new digital phone systems can be IP-enabled with software upgrades and minor hardware additions, and you may be able to use digital phones you already own. The potential cost savings are significant, and you can also increase the overall reliability of your phone system.
Open industry standards vs proprietary technology
You may also want to learn whether the phone systems are built on open industry standards. While all VoIP systems use the industry standard Internet Protocol (the "IP" in VoIP) to route calls, some use proprietary technology for administration or integration features.
Having a system run entirely on open standards can allow for greater flexibility in integration and customization. However, you may not be as concerned about flexibility as long as the features and costs match your requirements. The technology used in a particular system may impact whether you can leverage your existing equipment, so be sure to inquire about compatibility issues.
Connecting analogue devices
Lastly, some common business devices require analogue phone lines - notably fax machines, but also credit card machines, some security systems, and other devices. Make sure your supplier knows and accommodates these types of uses when planning to implement your VoIP phone system.
How significant should long distance savings be?
Before you commit to a VoIP phone system, evaluate the potential savings of free calling between all locations. If it is less than $250/month, think twice before making such a serious investment; and do not buy a VoIP phone system just for the sake of having the latest technology.
Plan for the future
The cost difference between including extra IP capacity at the time if initial installation and adding more VoIP components/licenses later is significant - consider adding room for growth.
Avoid someone else's VoIP phone system
Do not try to save money by purchasing a previously-owned VoIP phone system or components. VoIP technology is changing so rapidly that even last year's hardware is extremely dated. Plus, the installation cost does not change whether a VoIP phone system is used or new, which is a significant portion of the price.
With a previously-owned VoIP system, you also set yourself up for shorter life spans, higher upgrade costs, and more maintenance - in short, the deferred costs will almost certainly wipe out any upfront savings.
