Talk is Cheap for Small Businesses with VoIP

We've noticed a trend among the small- and mid-sized companies we serve: you're responding to very similar challenges. Your businesses are growing. Your customers expect consistently great service. Your employees are increasingly mobile. Your budgets are stretched.

There are technology solutions that can help you rise to these challenges. And one in particular that our customers inquire about more and more: Voice over Internet Protocol.

Better known as VoIP (and pronounced voyp), the technology is changing telecommunications by allowing people to make voice calls—including local, long distance, mobile, and international numbers—for a fraction of the price using a broadband Internet connection instead of a regular phone line.

With VoIP, small- and medium- sized businesses are drastically reducing monthly telecom expenses, cutting capital expenditures, improving productivity and exploring new business applications. Case in point: We installed VoIP for Integra Logistics nearly two years ago and the company realized a 200 percent savings in phone service cost almost immediately.

This article will provide you with the answers to basic questions about the technology (What is VoIP? Is it right for my business? What equipment do I need? What are the costs and benefits?) and recommendations for VoIP hardware, software and freeware. Read on to learn the basics of VoIP.

What is VoIP and How Does it Work?

Voice over Internet Protocol (VoIP) is the family of technologies that allow IP networks to be used for voice applications, such as telephony, voice instant messaging, and teleconferencing. VoIP entails solutions at almost every layer of an IP network--from specialized voice applications (like Skype) all the way down to low-level quality measures that keep those applications running smoothly.

VoIP is a new communications technology that brings with it several new capabilities that really change the meaning of the term telephone call. Basically, it means voice transmitted over a computer network and is often spoken in the same breath with another term, IP Telephony.

Simply put, your voice is converted into data packets and transmitted over a network. So what does this mean for you and your business?

IP Telephony can help lower costs by moving all your communications—voice and data—to a single manageable network. Site-to-site call costs are eliminated and teamwork is vastly improved. You can link people, products, office sites and customers in more efficient, more effective ways, making you highly competitive. Email, voice calls and voicemail, calendars and conferences all come together in one integrated system.

This convergence of data has been invaluable for Tony Johnson, Chief Financial Officer at Integra Logistics, who said the added flexibility and quicker response times translate into even greater customer satisfaction.

“Having the phone functionality and interface on our PCs has made a huge difference,” Johnson said. “The ease of taking my computer wherever I go and being able to answer a call on it is great. I was working from home on my laptop and got a call to my office phone number that I was able to answer, real-time, on my computer, without mobile forwarding, voice mail or waiting. My calls automatically forward with me wherever I am.”

What Equipment Do I Need?

Surprisingly, the list of equipment needed to enable and support VoIP is rather short. And chances are you already have most of the required components.

A broadband (high speed Internet) connection is required. This can be through a cable modem, or high speed services such as DSL or a local area network. A computer, adaptor, or specialized phone is also required.

Some VoIP services only work over your computer or a special VoIP phone, while other services allow you to use a traditional phone connected to a VoIP adapter.

If you use your computer, you will need some software and an inexpensive microphone. Special VoIP phones plug directly into your broadband connection and operate largely like a traditional telephone. If you use a telephone with a VoIP adapter, you'll be able to dial just as you always have, and the service provider may also provide a dial tone.

Is VoIP Right For My Business?

Successful companies, large or small, are always looking for new ways to solve problems. It goes without saying that technology is a key business enabler, helping businesses do more, communicate better, and increase both productivity and revenue.

It doesn't matter whether you've only got one office, or if your production or distribution facilities extend across the state or world. At some stage you'll need to pull together colleagues or suppliers from different locations to talk things through. This is where VoIP technology really shines.

VoIP technology makes collaboration effortless and cost effective, bringing all your communications tools—voice, email, instant messaging and more—into one interface. Your employees can call in from anywhere to join a conference call that won't cost a bundle.

So what types of businesses truly stand to benefit from VoIP? If, for example, your company manufactures products and sells them through nation-wide sales representatives, or if you communicate daily with a network of customers around the globe and phone service bites a big chunk out of your overhead, then VoIP is a cost-saving technology you should seriously consider using.

Our client Integra Logistics is an Alpharetta, Georgia-headquartered supply chain services provider with office, staff, customers and vendors throughout North America. Daily long-distance contact with these people is critical to Integra's business. Johnson reports that with VoIP, Integra Logistics realized about 200 percent cost savings over the traditional phone system. “VoIP was easy to manage because it dealt with networks, which an IT guy could take care of, versus a specialty phone system,” he said. “We immediately saved 20 percent on long distance costs, which was huge.”

On the other hand, if your company conducts its business locally and doesn't spend much on long-distance telephone service, then VoIP may not be the best communications technology for you.

What Are the Costs and Benefits of VoIP?

The benefits for a business in using VoIP are usually broken down into three basic areas: cost savings, improved features and capabilities, and simplification of operations and business applications. While many aspects of the first two categories are clear, there are hidden benefits that may not have occurred to those new to the VoIP market.

Today, VoIP is best known for its ability to cut telecom expenses. The capital and operating cost savings associated with VoIP can be substantial and often reduce the costs of a traditional PBX-based service by between 30 percent and 60 percent.

While VoIP equipment is usually cheaper, it is an additional capital expenditure and you will also need to purchase new end user equipment such as hand- and headsets. The ongoing operational cost savings is very clear and you should be prepared to evaluate any plan you consider against your existing plan to see concretely your ongoing cost savings.

Although VoIP has clear advantages in terms of price, capabilities, features and long-term extensibility, there are still some issues with the technology. Most of these are short-term in the sense that solutions to the problems are being explored and over the next year or two these will disappear as issues.

The biggest issue is inconsistent service quality. You've got to put up with the occasional hiccup in your voice service, caused by the one thing legacy telephone technology has built-in that VoIP doesn't: guaranteed quality. Because VoIP uses packets to transmit data like other services on the internet, it cannot provide the quality guarantees of old-fashioned, non-packet-based telephone lines.

Johnson mentioned that Integra Logistics has had some issues with quality of service with regards to the size of voice data packets being handled over a small amount of bandwidth; overall that's been the only hardship. “We rarely have quality issues except during conference calls,” he said. “But overall the service has been great.”

Bottom Line

VoIP has the power to improve your company's telecommunications environment by reducing communication costs and delivering features that truly improve productivity. The promise of reduced telecom costs is real and compelling, often creating the business case to move to VoIP. Having said that, in our experience, most VoIP business customers see the largest benefit from the productivity boost delivered by IP-enabled features such as unified messaging.

In the long run, VoIP networks will become the industry standard. The decision you make is whether or not now is the right time to make the move. You will need to look at how the change will affect your business. Will you need to change data networks and other infrastructure? Will you need to change your internal processes? If so, how? And finally, where and how will your business benefit from this new service?

Call on Hardwyre to help you find the answers to these pressing questions. We're standing by to analyze your business processes and IT infrastructure, and then recommend, install, configure and support the right technology solution for you. Give us a call at 501.851.2880 to talk with a highly trained and certified Hardwyre Network Engineer.