So you manage a small business – 25, 50, maybe 100 plus employees. You’ve got a great team, you got through the recession in one piece and business has been growing steadily since. You’re happy things are going in the right direction but there’s a niggle in the back of your mind. Recent years have seen an influx of bright new competitors, so-called “born-in-the-cloud businesses”, whatever that means. These kind of companies have customer service that is slicker, response times that are quicker, and prices are more competitive Your customers are taking an interest.
But why? Your people have more experience and your product is better. The clue comes when you come to contacting them. By phone, email, text or web site, response is always quick, even if your contact is out of the office. You’re always put through to somebody, without waiting, and that person is always fully armed with your customer history. Clearly, these company’s communications have got something that yours doesn’t have.
It’s called VoIP (or Voice over Internet Protocol, if you’re interested) and it has revolutionised telephony and business communications over the past ten years. Instead of running your phones and computers over different networks it “converges” them onto one. When that happens, you can make voice, messaging, email, video and a whole lot of applications interact together as “unified communications”. Effectively, your communications are applications, not hardware, and that means you can run them from anywhere – your office, a data centre, the cloud or a third-party service provider. It also means you can streamline your working practices, work remotely, save time and accelerate your business.
“Haven’t we got that?” you say. The chances are that, if you’re like the majority of UK SMEs, the answer is “no”. Your phone system probably still runs on “TDM”, not IP, from a metal box (PBX) in the store room at the back of your office. You can transfer calls, take voicemail and set call forwarding, but not a lot more. Your video conferencing system collects dust in the boardroom but employees prefer running Skype on their computers or smartphones. In fact they prefer their mobiles for everything.
At the next board meeting, you announce “We need a VoIP phone system” and suddenly, just when you thought you’d found the instant solution to transforming business productivity, your 25 year-old, X-Generation, way-too-clever IT manager asks: “Which one? On-premise, managed service, hosted, private cloud, public cloud, hybrid cloud, or Skype for Business?”
Unknown to your IT manager, the truth is that they are all amazing, slick, innovative, “cool” VoIP solutions that can transform your business performance. The challenge is selecting the system that your business needs. The choice depends on the way a business wants to operate today, with a view to the future of its communications strategy.
At this point it’s tempting to dive straight into the exciting features VoIP has to offer, but that comes later. First you need to address some basic questions and decide on your comms strategy and the type of system your business needs in the longer term.
Do you want to upgrade your old system to VoIP?
If the scenario described above resonates, then you are hardly likely to go this route, but some businesses do. If you invested heavily in your current system, or you need only moderate VoIP functionality, or you’re going to move offices and replace your system in the mid-term – you may want to convert your TDM based system to IP. This can be done by introducing IP gateways and SIP trunking connectivity that convert your communications to IP. It will save money on calls between offices and deliver limited additional features but these are false economies. It’s also a rather dated solution that by current standards is clunky and just puts a sticking plaster over the real issue. Also, this route may cause problems in getting support from the system vendor. Far better is to consider a full replacement with a modern, dedicated VoIP phone system, particularly a hosted solution. You’ll be surprised at how much cheaper, simpler and effective this approach can be.
How do you want to pay for a new system?
The rise of hosted, managed and cloud systems, where the system is owned by a third party that offers access charged on a “per seat” pricing model, has gained huge popularity amongst businesses that prefer to put their money to work in the P&L rather than incur capital expenditure. However, the extra-low interest rates of recent years have encouraged some businesses to undertake outright purchase. It’s not just hardware you’re paying for though. Consider also the cost of upgrades, maintenance and depreciation – all additional costs that a hosted pricing model normally includes in the monthly payment.
Where do you want to locate your new system?
Some businesses prefer to keep the system on site. Compliance or mandatory security regulations may demand this or business leaders simply, and rather irrationally, perceive data centre hosting as insecure. This couldn’t be further from the truth. Data centres employ the latest, state of the art network security, anti-virus software and data backup that wouldn’t be affordable to most SMEs. Furthermore, the data centre building offers far greater protection and environmental control to ensure the physical protection of equipment, all backed up by business continuity systems and “redundancy” to support disaster recovery.
Do you want to own your system or subscribe to a hosted service?
The total cost of ownership for a VoIP phone system extends far beyond the purchase price. Upgrades and maintenance plus the cost of monitoring, management and general support need to be taken into account. A hosted contract normally amortises these costs into the monthly payment and, importantly, includes a service level agreement to ensure your communications run trouble-free. From the outset, though, the chances of technical problems with a hosted system are small because the equipment is always maintained at the highest, most up to date specification. Similarly, the system is managed by a trained and experienced support team, something that can be a challenge for a cash-strapped, business IT department.
A hosted system also keeps you in control, usually equipped with a management console that lets you change configuration of the system, add or remove users, assign features to specific employees and monitor performance. In this way, you gain the upside of ownership, with management and control of services, but you don’t inherit the downside costs.
Is a managed service an option for the SME?
The pressure on IT resources is a problem common to many businesses and in these circumstances a managed service can be an appropriate solution. Whether the system is on site or located in the data centre, managed service providers will enhance, run and maintain your VoIP phone system to guaranteed service levels. For low-resource IT departments or businesses embarking on an out-sourcing strategy, this approach meets objectives, but it comes at a price and it delegates control into the trust of a third party. How will they respond? Are they agile enough to make small but crucial changes to configurations, like a ring strategy for example? For larger organisations with specialist technology and multi-national branches, a managed service with an established network of resources in overseas countries can provide best value for money. Less often is this an SME benefit.
The owner-managed, on-site PBX from the big-brand vendors may still be a valid solution for a minority of businesses but the tangible competitive advantages of cloud and hosted alternatives are powerful.
The middle road followed by hybrid cloud systems and the big-brand cloud options (Microsoft, Google, etc) may suit the big enterprise. For the smaller business, though, the agility and customer support of a cloud communications specialist offer the basis of a more productive long term partnership.
The high level view of VoIP phone systems given above is just the first, strategic part of your journey to that goal. “The Journey to VoIP Nirvana: Part 2” gets down to specifics and asks the question, “When should I consider a cloud phone system?” Stay tuned next week to read all about it.
In the meantime, download Foehn’s complete “Cloud Phone Systems Buyers Guide Series” to learn more about the options and what your business needs to consider when investing in this high performance communications technology.
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