Business Technology

True VoIP phone savings? Look behind the Cloud

10 min read

17 October 2016

Rafael Cortes, Foehn Head of Marketing, identifies some lesser-known cost savings offered by a Cloud Phone System

Rafael Cortes, Foehn Head of Marketing, identifies some lesser-known cost savings offered by a Cloud Phone System

The difference between savings and big savings

The cost advantages to be gained from cloud phone systems, and cloud-based systems generally, has been much publicised and even those of us who are not IT experts are aware of the headline savings and cash flow advantages. No upfront capital outlay, no IT management costs and pay as you go, per-seat pricing which includes maintenance costs, technical support and software upgrades.

Behind the headlines, though, things can be quite different. For some business managers, keen to save and make productivity gains, the mere mention of ‘cloud’ is a tick in the box and the details of the final costings are a mere formality. The claim that “It’s cloud-based so it’s going to save me money” is generally true when moving from an old onsite phone system, but a number of other factors can make a big difference in how much money will be saved.

The problem is that some providers of cloud phone systems are less transparent than others and, whether by design or by negligence, some costs are obscured by the Cloud hype until they surface months or years later, after the purchase decision is made.

Make no mistake, cloud phone systems offer the most value and highest return on investment of any small business telephony or contact centre solution. Our experience is that with close attention to business requirements and diligent deployment of the system, cloud phone systems can save businesses up to 75%.

So on a scale of 1% to 75%, how much do you want to save your business? The tables below show real figures achieved for our client Boston Borough Council. Your business may well be smaller than this example but the principles and percentages still apply. A saving of 41% over a five-year period was a significant bonus for the Council’s budgets, made all the more impressive when taking into account that the project was not straightforward and costs included new phone handsets, something not always necessary. (See the full case study here)

Boston City Council: 41% Savings Achieved over 5 Years

ANNUAL COSTING BREAKDOWN
Previous Solution Cost (£) Foehn Cost (£)
Annual Maintenance 9,300 DDI Range 1,824
Call Logging 1,200 214 Extensions 19,398
Cloud expansion 3,240
BT PSTN Charges 7,000 Call Costs 5,600
Voice Services 2,814
Line Rentals 23,000
Depreciation 10,200
Total Annual Costs £56,754 Total Annual Costs £26,822

 

41% RUNNING COST SAVING OVER 5 YEARS
Year Previous solution (£) Foehn (£) Saving (£)
Year 1 56,754 26,822 29,932
Year 2 56,754 26,822 29,932
Year 3 56,754 26,822 29,932
Year 4 56,754 26,822 29,932
Year 5 56,754 26,822 29,932
New Handsets 33,200
Total £283,770 £167,310  

£116,460 (41%)

 

Don’t let feature lists and prices cloud your judgement

Some companies price on an all-inclusive basis, with a single price per user, per month, with all features included. Others offer a very low starting fee, but then charge for additional features thereafter. These costs can escalate quickly.

The most reliable price guide is one that offers one price per user, per month, with all features included.

A set of standard cloud phone system features might be considered to include dial tone, voicemail, call transfer, conference calling, call divert and hunt groups. Other features might include call recording or the capability to integrate with applications such as CRM, Outlook, etc. So feature comparisons are important. Be careful of terminology as well. ‘Unified Communications’ is now a common term for a set of collaboration facilities – video, conferencing, messaging, etc. This set could be extensive or short, so careful inspection is required to see what you get for your money.

Customised features also need to be built into the value equation. IVR (Interactive Voice Response), skills based routing and hunt groups are all features where a more experienced provider might customise the service to your business requirements within the stated price.

Are network costs included?

Networks and their costs are a crucial consideration in acquiring a cloud phone system. The advantages of SIP over traditional ISDN lines, in terms of both cost and portability, are widely known. But appraisal of network costs, a significant proportion the total cost of ownership of a cloud phone system, doesn’t stop there. Ethernet Fibre, Ethernet First Mile and Generic Ethernet Access all offer important advantages over low performance ADSL and all at different price points.

Each offers its own set of different capabilities that need to be considered carefully in relation to your business requirements.

  • Quality of Service critical to your voice communications
  • Scalable bandwidths from Mbps to Gbps
  • Managed monitoring and Service Level Agreements
  • Installation and lead times
  • Uncontended performance and symmetrical speed on upload and download
  • Security and reliability across multi-site businesses

Look for savings in the bigger picture 

  • Make sure your system is scalable: For businesses with more than 25 users, VoIP can make big savings on lines, maintenance and support. So if you’re looking to grow beyond this size, be sure to use a system that is capable of scaling with your business.
  • Ensure good customer service: You’ll need good technical support that is available during your business hours and is capable of making moves and changes at your site.
  • Consider your networks carefully: If you’re still running on ADSL, investment in a business-grade connection will deliver greater reliability, better productivity and ultimately better return for your money.
  • Look after your voice: Ensure your network provides Quality of Service for voice delivery, ideally backed by a Service Level Agreement with the provider. It’s a small cost to avoid annoying your customers with poor quality calls.
  • Check your firewall: Invest in a managed service to configure your firewall settings and avoid disruption of calls.
  • Tighten up on security: IP networks are open to intrusion like any other data network so check with your provider for security measures that can minimize the risk of billing fraud and the losses that can result.
  • Pay attention to call costs: Check out the costs of national, international calls and calls to mobile phones that are bundled into your monthly fee.

Look at the bigger picture and where your business is heading in the mid-term

When budgets and time are tight, your existing phone system has problems and your team is demanding change, it’s a challenge to think long term – but that’s where the biggest savings come from. In five years, your business could change significantly but will your phone system. Scalability within your cloud phone system technology will offer huge savings compared with the expensive rip-and-replace alternative. Equally, the non-geographical features of a cloud phone system will save money when it comes to an office move.

Also consider that your cloud phone system is just a few integrations away from becoming a fully-fledged Contact Centre. Plugged into your CRM and configured to route calls, your cloud phone system can improve your ability to serve customers are greater speed and efficiency, without the expense of acquiring a specialist contact centre platform.

Longer term integration planning of this type is what drives the biggest savings and the actual integration costs can themselves be reduced by adopting a cloud phone system that is built on open source software. Working with Open source allows greater agility, higher quality and less cost compared to dealing with the proprietary software of the big vendors. The excellent standard of security, reliability and technical support associated with open source code demands serious consideration by any business considering plans to integrate their cloud phone with other applications and business processes.

To learn more about how to maximise savings from cloud phone systems see Foehn’s Top Tips and Best Practice for Cloud Phone System