Does a Hosted VoIP Solution Make Sense for Your Business?

Updated: February 04, 2010

You have decided (in theory) that a Hosted VoIP solution could add benefits to your organization and you are willing to take an initial crack at determining if you really want to explore this option.

Here are three steps to help you with this decision:

1. Look at your phone bills. Does your organization currently have enough outbound usage to warrant the per seat cost of a Hosted VoIP? Hosted VoIP is a license scenario, traditional phone services are per line, plus usage. This look will be similar the evaluation your organization did a few a years ago when the phone companies started offering unlimited calling for business. The difference now is Hosted VoIP gives you additional services, so this can't be your only determining factor. This may not give you the absolute "Yes, VoIP worth looking at", but it may give you the absolute "No, VoIP is too cost prohibitive now". A simplified example would be if you have 30 employees and the average monthly per seat cost of a Hosted VoIP is $39.99 then your current phone bills (monthly recurring, local & long distance usage) should be more than $1199.70. If you are not a heavy outbound phone usage company, you will need to find other value adds to justify your decision to the Executive Team or Owner. Remember to take good notes on price points, so that if the time is not now, you will have this information readily accessible when the same Executive Team / Owner brings the idea to you in the future.

2. Look at your internet. Do you have enough bandwidth? Per call bandwidth can be anywhere from 30k-90k on average per call, depending on compression technology. So if those same 30 people are on the phone at one time then you will need 900k - 2700k (Full T1's are 1.544 Mbps or 1544k) just for your voice traffic. If you don't have enough bandwidth, what are your upgrade costs for the bandwidth and routers you may need?

3. Look at your infrastructure. Do you have (minimum) CAT5e cabling? Do you have an IP Data drop and electric power outlet at every location that a phone station is currently and/or will be needed in the future? Do you have switches that can manage Quality of Service (QOS) or Power over Ethernet (POE), if needed? Are your data jacks labeled correctly with the patch panels? Do you have an up to date electronic "as built" of your facility(s)? The infrastructure is the "last three inches to the jack" that is most often forgotten during the evaluation planning. Trust me when I tell you that if this is not done, any savings realized or ROI projections will be lost when your infrastructure has to be upgraded last minute to make your solution work properly. Plan appropriately to avoid business impacting consequences.

If you can answer these questions with a certainty then it might make sense to look deeper into whether a Hosted VoIP solution is a viable technology for your organizational needs. Your "real" evaluation process will be a much more in-depth look at the above items in addition to evaluating service providers, Hosted VoIP packages, comparing value adds (auto attendant, voice mail to email, follow me options, etc), network requirements, number portability, infrastructure testing, potential CAPEX costs for upgrades...you get my point.

Moving to a Hosted VoIP solution is not as easy decision, but if you determine a Hosted VoIP solution could be a benefit for your business you should have a real implementation plan (article for another day) in place prior to moving forward with any contractual obligations.