Is VoIP Really Worth It?

Mark Allen

Reduced Network Management Costs

An ROI calculation should also include the ongoing expenses associated with managing the voice network, maintaining equipment, administering user changes, and supporting business growth. Cisco IP Communications solutions can help organizations reduce network management costs through several improvements.

• Improved staff productivity-A converged network is simpler to manage, freeing the time of support staff from routine maintenance and troubleshooting to projects that deliver more substantial strategic or operational value. For example, many Cisco customers in higher education report productivity improvements in the range of 10 to 40 percent.

• Option to reduce outsourcing-Because internal staff can work more productively, a company may choose to perform in house all or certain network support functions that were previously outsourced. Manufacturing company H.B. Fuller has eliminated outsourcing altogether in locations where a Cisco IP Telephony system is installed, yielding tens of thousands of dollars in savings each year.

• Growing networks, stable staffing-With the efficiencies of a converged network and IPC, network support staff can manage much larger user communities with the same number of personnel. One Cisco customer, the Ministry of Social Policy in New Zealand, was able to support an additional 2500 users with the same network support staff of 10 people.

• Reduced costs for moves, adds, and changes-Although the costs of moves, adds, and changes activity can vary significantly around the world, these expenses are estimated to be as much as US$75 to $135 each. IP phones support extension mobility, helping organizations reduce this ongoing cost. For example, a typical enterprise with 5000 employees that performs 2000 moves per year at an average cost of US$105 per move can save more than US$210,000 per year by deploying Avaya IP Office phones and voip solution. Click Here for pictures of the phones - http://www.simplyusedphones.com/voip.html

Improved Line Usage

By making more efficient use of communications lines, a converged network also cuts the recurring expense of service provider charges for traditional voice services.

• Reduced costs through toll bypass-Internal long-distance (toll) calls that were previously connected over the public switched telephone network (PSTN) can now be carried over the internal network at no cost. These savings can be significant for businesses with high volumes of internal calls among company locations, especially in areas with expensive long-distance rates. After Arizona State Savings and Credit Union IP Telephony solution, monthly long-distance charges dropped dramatically, from $11,000 per branch office to $3500 for the entire company.

• Lower voice circuit costs-The ability to use the data network to transport voice traffic has allowed Cisco customers to significantly reduce annual voice circuit costs. By using IP Communications solution, companies can eliminate redundant, expensive leased lines that interconnect PBX and voicemail systems. The flexible choice of a centralized IP solution can help network managers make the most efficient use of network resources while meeting local communications requirements. It may also be possible to consolidate unused T1 channels previously assigned to voice to create fully available T1 circuits that can be used as needed for all types of network traffic.

"By replacing a traditional network and implementing IP Solution, we realize a return on investment of $1.2 million per year," says John McGowan, CIO and vice president of IT, Florida International University.

Increased User and IT Productivity

The savings described in the previous sections are all "hard" costs-quantifiable and easily determined. The savings generated by improvements in productivity for users and IT staff are "soft" costs-less easy to predict.

The Sage Research study found that 86 percent of companies using IPC reported that productivity benefits have grown since initial deployment. For example, some survey respondents reported average time savings of 1.6 hours per move for moves, adds, and changes activity and four hours per week in all communications by each branch-office employee.

An estimate of savings generated by productivity improvements can be made by looking at factors such as those listed in Table 2. Of course, each business should consider the unique set of productivity factors that reflect its goals and operations.

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