Hidden costs of hosted VOIP

Many businesses rush into hosted VOIP investments, seeing the technology as an enormous cost saving - only to be disappointed with the results. Too often, this is because it is difficult to evaluate the true costs of VOIP, resulting in an unquantifiable return on investment.

Mitchell Barker, founder of WhichVoip, says too many businesses have no clue what they are implementing and are often shocked when the hidden costs of a hosted VOIP deployment offsets any potential cost savings.

He says organisations should carefully evaluate any VOIP from all sides, including strategic, operational and total cost of ownership views. "The first issue to consider is that of bandwidth. Traditional phone systems operate within their own networks, but hosted VOIP needs WAN and LAN infrastructure in order to work.

"Because of this, VOIP systems may have to share bandwidth with other business communications, and although bandwidth may not be a problem in the LAN, the WAN can become congested, resulting in jitter and delays. In order for a hosted VOIP deployment to be really effective, companies either need dedicated voice links, or increased network bandwidth, the amount of which will vary according to the number of users, projected growth and suchlike. An important thing to note when sharing voice and data on a single link is that you need to configure QOS (quality of service) and make sure that your network provider honours this QOS from the local device to the connection in the cloud. These costs must be factored in when looking at a hosted VOIP investment."

Another point to look at, he says, is the network. "LAN traffic, as it is internal, is made up of data packets that are largely unaffected by network congestion. VOIP data packets are very different in that it is a real-time protocol and therefore highly delay-sensitive. In this way, deploying VOIP means a thorough and objective look at the current network infrastructure, to make sure it can support VOIP data packets without sacrificing quality of service. The network analysis must look at the network devices, routing, power and configuration in order to get an accurate estimate of what is needed to support an optimal hosted VOIP implementation. The cost of assessing the network, as well as costs involved in adding capabilities where needed, can be quite high, and should be factored in to any hosted VOIP investment. In fact, you may even be required to run a completely separate network for your VOIP implementation, which would mean a dedicated network switch and cabling for each device."

One area in which many businesses fall short when implementing VOIP is that they underestimate scalability requirements, says Barker. "Not enough scalability can drive costs of hardware, power, and cabling infrastructure sky high when the business needs to roll-out hosted VOIP to more users than initially planned for. Be smart, plan ahead and make sure that additional system and storage resources are planned in advance, bearing revenue growth and user demand in mind."

Next, he says, comes security. Everything on the Internet is a potential target for hacking, denial-of-service attacks and spying, and VOIP is no exception. Because of this, security is a must with VOIP implementations, and more often than not, security isn't included as part of an installation as most VOIP providers are not in the security business. "Adding security can drive up costs enormously, but VOIP systems must be monitored and protected in the same way as other enterprise systems, as this doesn't come cheap. Depending on your network design, you may need to engage with the firewall team to ensure that the configuration is secure and allows for VOIP connections."

Finally, companies need to bear in mind costs associated with productivity and training. "All new systems mean user training and loss of productivity, as training is vital to help users get used to new systems and ways of working, and while they do, the result is lost productivity. Bear these costs in mind, and add them to the 'VOIP tab' before embarking on an implementation."

He says all these factors and more can drive up costs considerably, and make it very difficult to define the true cost of VOIP adoption in your organisation. "However, by asking VOIP providers the right questions, a lot of the confusion should be resolved, and bullets dodged before it is too late."