Business Cost Saving Using VoIP

By Ryan Ayers
Updated: January 27, 2011

Over the last several years, the trend in business telephone systems has been a distinct shift toward VoIP systems from traditional analog phone systems. A recent study by Infonetics Research showed that 36% of large businesses, and more than 23% of medium sized businesses, have already made the switch. The combination of feature-rich options packages and a significantly lower overall cost are the primary driving factors.

How VoIP is Different than a “Traditional” Phone System

Traditionally, phone calls have been placed using a pair of dedicated channels that are dependent on geography and are subject to availability. This means that each time a call is placed, a connection needs to be established and then maintained for the duration of the call. This process requires a physical infrastructure in order to work, and is limited by factors such as call volume, distance and cost.

VoIP calls are made using data lines to access the Internet and utilize a process called “packet-switching” to transfer voice data. This is a process in which the voice data is assembled into “packets”, disassembled, sent via the Internet to its destination, and then reassembled – all with enough speed to provide continuity during the call. Because it utilizes the Internet, rather than using physical phone lines and routing equipment, VoIP is not dependent on a set of dedicated channels to complete a call – and is not hampered by issues such as distance, call volume or availability.

The Bottom Line for Businesses

All of this technical jargon translates directly into cost savings for users of VoIP phone systems. For businesses in particular, who frequently have multiple lines in multiple geographic locations, VoIP presents a cost effective way to create a structured, cohesive telephone system at a significantly lower price point.

Aside from its added features and versatility, VoIP generally lowers costs in ways such as:

  • Allowing businesses to set up and store a local prefix phone number – allowing for frequent calling within a certain area code without incurring long distance charges. This also allows for toll-free calling from customers within a specific geographic area.
  • Significantly lowering and/or eradicating long distance and international charges, as well as lowering charges for services such as toll free phone numbers.
  • Eliminating the need for service and maintenance charges associated with the physical components of traditional telephone systems.
  • Reducing or eliminating the service charges and staffing needs associated with revisions to your network (switching/moving extensions, additional lines, changes to features, etc.).

While allowing your business greater flexibility and increased productivity tools, VoIP systems have the ability to dramatically lower your overall cost for telephone service.

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