How To Buy a VoIP System

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Does your business make long-distance phone calls on a regular basis? Do you have employees at multisite offices or in remote locations? If so, you might want to consider getting Voice over Internet Protocol (VoIP) for your business calls. With VoIP, your calls are routed through your computer, allowing them to be conducted without long distance charges no matter where in the world you are calling. This is particularly beneficial to businesses working with international employees and contacts but it can also be useful for businesses that operate at multiple locations.

VoIP can be an excellent tool for communication and a great way of reducing phone costs for your business. But it's not right for every business, so you'll want to look carefully at whether it's something that you want to invest in now. Things you'll want to consider include the amount of money currently being spent on calls, the cost of setting up and maintaining your VoIP system, and the possible drawbacks of using VoIP. A closer look at these topics can assist you in making your decisions.

Here are some things to think about before you get invested in VoIP:

  • Does your company regularly make internal long distance phone calls? If so, what is your current system for doing so and what is the approximate monthly cost of that system?
  • Does your current ISP have a VoIP option? VoIP is relatively new and not all ISPs offer it yet. Those that are may or may not provide bundled service packages that make the change worth its cost.
  • What is the cost of VoIP offered by your ISP, including any hidden costs such as equipment, networking, training and tech support?
  • What kind of equipment will be necessary for VoIP set-up?
  • Is your small or midsize business already on a local area network (LAN) or wide area network (WAN), which facilitates setting up VoIP and reduces initial set-up fees?

Does Your Business Need VoIP?

Your business might benefit from VoIP services if:

  • Your business has locations at multiple sites, or remote employees who are already connected through a LAN or WAN. Companies that are already networked find that making the transition to VoIP is relatively low-cost (whereas those that aren't networked should factor in the setup fees).
  • Calls to multiple numbers are often made simultaneously by your business.
  • It would benefit your business to be able to receive voice mail as e-mail messages, as well as to be able to forward business phone calls to employee mobile and home phones.
  • Multiple employees are located in remote locations.
  • On-site employees are located in a region where it is common for personal cell phones to have different area code numbers. For example, businesses located in the San Francisco Bay Area often have employees who live in any of a number of different area codes. If regular communications occur with the far-flung employees' home or cell phones, long distance charges can be high.
  • Your business already engages in many forms of remote collaboration, including conference calls, and costs may be reduced by going through a VoIP system.
  • Your business deals with clients and customers in a variety of different locations, especially internationally, or your business growth plan includes marketing to such areas. While you won't get the reduced cost on calls to non-VoIP clients, you can plan to communicate through VoIP with the employees who are hired in the new locations. VoIP can facilitate those calls.

Types of VoIP

There are two different types of VoIP service. The first is often used by individual consumers. Also known as Internet Telephony, this type of VoIP uses a standard landline and broadband service with an adapter and a VoIP subscription to connect all calls. While some businesses are small enough to consider use of this kind of VoIP system, most businesses will be looking at the second kind of VoIP system. This type of system, designed to link multisite locations to a single line, uses equipment installed at the location to route phone calls through the Internet.

Additionally, you should know that there are two VoIP phone options: hosted and premise-based. Hosted VoIP uses no phone lines and has a single broadband connection for both data and voice. Calls are generally charged per use. In contrast, premise-based VoIP uses standard phone lines connected through the Internet and requires a second broadband connection (one for data and one for voice). Calls are generally charged per line. This is the route many businesses take.

Equipment for Premise-based VoIP

VoIP is relatively easy to set up, particularly for businesses that are already connected to a single network. However, some new equipment will be necessary. This equipment includes:

  • A Private Branch Exchange (PBX), which is the hardware that manages the phone calls through the Internet. You may be able to use your existing phone system and upgrade it with IP-enablement software.
  • Landline phones. VoIP calls are routed through the Internet but go through a standard phone. The phones used by your business, especially if digital, may work; double-check their compatibility. Be aware, however, that VoIP-specific phones (such as those made by Polycom and Cisco) are generally a better bet for businesses and are usually considered worth the initial output cost because they offer far more call-handling and management functions than standard office phones.
  • Accommodations for landline phone needs. If you have other office equipment that uses your existing landline (such as a fax system), you may need to purchase software to upgrade the systems and make them VoIP-compatible.
  • Laptop add-ons for employees to use VoIP away from the office.

The Drawbacks of VoIP

Before determining that VoIP is right for your small business, you should take into consideration two major VoIP drawbacks. First, there are problems with maintaining an Internet-based system that don't occur with a standard landline. Inevitably, you'll have software difficulties and Internet outages that will prevent VoIP calls. Because cell phone communication is so prevalent today, this may not be a large problem for most businesses but it should be considered.

The bigger issue is that VoIP increases your network demands. Your broadband connection needs to have enough bandwidth to maintain call quality. If this is a concern, your business should look into Ethernet networks and frame relay networks to improve quality of service. Your company may also require an additional Quality of Service (QoS) application which upgrades the VoIP system to improve communication.


The bottom line is that the bottom line matters. Costs to consider include:

  • Initial set-up, including extra equipment that might need to be purchased to make VoIP work with your existing system.
  • Training costs. Will your staff need to be trained on the system? What will this cost if an IT person is needed for the training? What will this cost in terms of time lost to training?
  • Maintenance costs (monthly lease fees). Know the details of your plan including per minute, per use or per line VoIP charges.
  • Troubleshooting and IT assistance costs. Many companies assist with initial setup at no charge but expect fees for later troubleshooting.
  • Bundle options. In the past, VoIP bundles have been for individual consumers (combining home phone, cell phone, broadband, and digital cable) but companies are starting to roll out VoIP bundles for businesses.
  • Expected savings. Consider the amount that your business currently spends on long distance calls as well as the projected amount that will be spent in the upcoming year based on your business growth plans. Compare this with the cost of VoIP. Also consider other expenses saved, including the enhanced productivity allowed by remote collaboration via VoIP. And think about areas where your business can cut back because of VoIP; for example, if you have secretaries at every site answering phones, you can streamline that work to one secretary. Additionally, network administrators will be maintaining only one network, saving time and money.

Additional Considerations

After weighing the pros and cons, you have to make the final decision about whether VoIP is right for your business at this time. If you decide that a VoIP purchase is a good idea, consider these final tips for the purchasing process:

  • Shop around. This sounds obvious but many business buyers go straight to their own ISP and don't go any further. Explore all of your options before making a VoIP purchase. Consider using a licensed reseller for the purchase.
  • Get and understand manufacturer support. Your VoIP system will eventually have problems; at the very least, it will require upgrades. Be sure that you know the details of how to obtain help and services.
  • Ask in advance if you will have all of the admin passwords to make simple changes. You want a VoIP system that you can access yourself for things like changing users; you don't want your business to have to foot the bill for an IT person to do that.
  • Be sure that your bandwidth capacity will be sufficient. The keywords to look for here are "low jitter," "low latency" and "low packet loss."
  • Find out whether add-on services are available (for example, an 800 number for your business) that you may need or want to consider in the future and what the options are for adding-on after the start-up date.

VoIP is increasingly popular among businesses, especially as the potential for remote collaboration is being employed by more businesses. However, it comes with initial and ongoing costs. If the costs outweigh the benefits, don't be afraid to wait until VoIP is a little less of a newcomer technology before making the call for your business.

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