Calculating the Real Cost of a VoIP Upgrade

Upgrading to VoIP is a great business decision: not only do you save money over the costs of a traditional landline phone system, but you also get added features and utility that boost productivity and customer relationships. But while a VoIP system saves you money down the line, there is the cost of the upgrade to consider. In this post, we’ll explore the different factors that play into the price tag on getting a VoIP phone system.

Decide How You're Going to Deploy VoIP

There are different ways of implementing VoIP in your workplace, all with their own benefits and drawbacks. We went into detail about the ROI of each deployment in an earlier blog post, but here’s the short version:

• Cloud-based: In a cloud-based or hosted VoIP system, the vendor “hosts” the necessary VoIP infrastructure in its own buildings or data centers, allowing for faster implementation and lower capital expenditures. The vendor takes care of maintenance and installation. Cloud-based VoIP usually operates on a monthly subscription and cost per line, making it ideal for small to mid-sized businesses who want a top-of-the-line phone system without paying the big bucks.
• Premise: An on-premise VoIP system requires the business using the system to purchase and install the necessary infrastructure in its own building or data center. Because of installation and maintenance costs, premise VoIP costs significantly more than a hosted solution, but gives the business full control over its phone system and security, and makes it easier and cheaper to expand to more phone lines. Large to enterprise-sized businesses usually find that premise systems offer a better ROI than cloud-based over time.
• Hybrid: Hybrid VoIP usually refers to a system that uses both IP telephony and an existing PBX phone setup. Hybrid systems can be costly, but make it easier to switch to full VoIP for companies that already have an extensive PBX phone system.

Determine What You Need for Your Phone System

Every business has different needs, and VoIP systems offer so many features that it’s unlikely you need them all. To make sure that you’re paying for exactly what you need, go over the features offered by your VoIP provider and see which ones you can see your business implementing and utilizing over the next two years. For instance, mobile VoIP is a foundational feature, but your business may not need options like an auto attendant that can answer basic customer queries. If you don’t see the practicality, it’s probably not worth the cost, no matter how flashy the feature.

In addition, be sure to determine how many lines you need currently, and add on any projected expansion or additional lines that will be required. By including expansion costs in your calculations, you get a better picture of how much your upgrade will cost.

Calculate Your Capital Outlay

Depending on your deployment and your needs, capital outlay can vary greatly. With a hosted solution and only ten lines, your outlay could range from nothing to ten handsets and a network upgrade. With an on-premise system, the outlay will be much greater. Once again, determine what you need before you start purchasing, and talk to your provider about options for reducing cost.

Understanding the cost of upgrading to VoIP can help you make a business case for making the switch. While the price of moving to IP telephony can give a business pause, the long-term benefits and savings make VoIP a smart move for business growth.