This article was written by Graham Hill, who has worked in the telecommunications industry since 1976. He is the founder of Foxhall Solutions, which provides a range telephony services, including VoIP setups, to small and medium sized enterprises.
Many small businesses will already have a telephony network built around traditional analogue lines but this does not mean they can’t use VoIP technologies. Migration is easy and can deliver a range of savings. VoIP can also benefit multi-site companies which employ office-based and mobile workers.
What issues do small businesses face with traditional telephony services?
Traditional telephony services can provide a range of issues for small businesses:
- Long-term contracts: small businesses are cost-conscious and need to be flexible to adapt to changing markets. Traditional telephone systems tend to lock businesses into long-term contracts on inflexible technology that requires radical change to up-size, down-size or add features to.
- Line limitations: line types are limited to analogue with no Direct Dial Inward (DDI) and caller ID facilities, and are expensive to rent and install with long lead-times from order.
- Proprietary limitations: traditional phone systems are proprietary and therefore, when they reach end-of-life they are no longer able to be supported. Spares become difficult and expensive to obtain, and expertise in how to maintain and configure the systems disappears due to its specialisation.
- Tough to relocate: staff moves are difficult with traditional telephony, because an extension phone is cabled out from a programmed port on a hardware card. If that extension is moved, there need to be system changes made to re-route that connection, or re-program the telephone system to accommodate.
- Expensive to link networks: traditional telephony has mechanisms to extend its connection to branch and home offices using expensive and proprietary technology. So it is expensive and difficult to provide home-office support, or connect branch offices in different towns.
- Expensive tariffs: major carriers offer what appear to be good alternative tariff deals, but in a lot of cases a fairly basic review of a telephone bill will reveal that these have hidden clauses that negate their value. Some examples are capped call rates (but most business calls are only around two minutes), minimum charges (you may pay for a two-minute call if you are only on the call for a few seconds), and pre-paid packages (will you make that many calls?).
How can VoIP technologies meet the needs of small companies?
Carriers providing VoIP services are trending to work short-term (12 month) contracts, especially for trunk lines that bundle multiple connections. Systems are purchased outright, so there is no long-term hardware lease or maintenance contract. VoIP platforms do not have hardware break-points so system changes are simple and carried out without needing to source additional system components (except when a VoIP gateway is required to a new type of telecoms service).
VoIP systems can connect to ‘traditional’ ISDN (digital telephone lines) and analogue line services, and still need this facility due to some areas not being able to provide adequate broadband to carry SIP trunks for the business. However, in most cases, a single broadband line can carry up to 12 simultaneous SIP trunk calls, and therefore, cost of lines in regard of both install and monthly rental are cut dramatically.
A single line and broadband may cost around £30 per month, with line and broadband install costing around £150, but additional trunk lines in that service are installed at £0.00 and rented at just £2.00 per month. Compare that with line installs of £120 for analogue lines, around £300 for ISDN2e (two ISDN lines bundled together), and rentals of the same for between £12 and £15 per channel, per month.
An IP-PBX (the VoIP system) can be configured to work with different phone companies, and the system configured to route calls depending on what number is dialled e.g. one carrier may offer great call rates to Europe, but not so good locally, another may be excellent locally, but not so good to Europe. It’s easy to shop around and get the best of both worlds in this scenario.
VoIP systems are put together from components that may be replaced or added to with equipment manufactured by many different suppliers. This means that if the PC being used for the VoIP server fails or is just too old, it can be replaced with the latest type and the software and license moved to the new machine. The phones may be replaced and the same with any hardware devices. Software upgrades can add and enhance features on the VoIP platform.
Support costs are lower, because the nature of the VoIP system makes it simple to access both the core system and the phones using remote access across internet – just in the same way that PCs and servers are supported. Changes and fixes can be applied quickly without the need for site visits. Staff moves are simplified also, because the VoIP phones can simply be unplugged and moved with the staff member. The phone will work with its programmed extension numbers and features, from any data connection point that’s patched into the local network.
How do multi-site VoIP technologies for SMEs work, and what benefits are there?
VoIP systems make it extremely easy and very inexpensive to extend a company phone system out into the internet. Using either desk phones, smartphones with VoIP apps, or soft-phones running on PCs or laptops, it is possible for home-workers, branch-office workers - and even supplier partners and customers – to become part of a company’s VoIP system structure and make ‘internal’ calls between extensions, completely free of charge.
This type of connection has no geographic boundary as it is limited only by the reach of the internet.
Hardware or software based phones may be configured to access the company’s VoIP system via a remote connection into the same broadband router as is configured to access SIP trunk services. This means that an internal call goes across the Internet, by-passing carriers and incurring no call costs. It also means that when remote extensions make outgoing calls via the carriers, they do so via the company VoIP system at favourable rates, and via a platform that gives the company centralised call billing.
The simplicity of setting up this type of extension means that it is easy for a company to set up remote connections to cover all sorts of staff, supplier, customer and weather related issues. Wouldn’t it be nice to know that when you are snowed in in February, you can still take your calls as though you were at your desk?
What are the cost savings for small companies when switching to VoIP?
There are ‘hard’ cost savings, and productivity bonuses that come from the use of VoIP technology.
Hard cost savings
Cost savings come from reduction in install costs due to the low cost to implement SIP trunk solutions, vs traditional analogue and ISDN (digital) lines (£120 to install an analogue line vs £0 for a VoIP line). Further savings come in the form of lower on-going line rental (£12 per month for an analogue line vs £2 per month for a SIP trunk), and lower call tariffs of around 1p per minute vs BT’s published tariff of 7.5p per minute.
It is possible to customise a VoIP system so that calls to mobile phones can be routed across the mobile phone network at mobile to mobile rates. In cases where companies pre-pay for their set of mobiles, this is a way to ensure that no further costs are incurred in calling staff on their mobiles. Calling other mobiles is also cheaper, because although mobile tariffs vary, calling a mobile from another mobile is always cheaper than from a land-line.
Some smart-phones (e.g. the iPhone) can connect to WiFi services and are able to run VoIP applications that turn them into extensions off of an IP-PBX. This means that it is possible to make calls from the phone through the internet and bypass the mobile phone provider. This makes it possible to call the office while travelling, at zero cost.
Productivity savings are numerous. These come from changes in strategy involving home-workers, after-hours support and diversion to and simultaneous ringing of mobile phones. The flexibility of VoIP systems and their ability to change the nature of the telecoms service for a company on very short notice, means that the company can react quickly to change, and can use their telecoms structure as a tool in that change.
What kind of installation process is there and how long does it take?
A straightforward IP-PBX system could be generated and installed in around five working days for an SME. This would involve installation of a VoIP server PC, a voice-aware network switch, and the configuration of a second router to prioritise voice on a second Internet connection.
Note that these installs would separate voice and data flow on and off the Local Area Network (LAN) through use of a second VoIP router that interfaced a second broadband service to be used exclusively for voice transmission. This ‘VoIP’ router would carry traffic to and from the carrier on the end of the SIP trunks, and also be the internet target for connection of remote extensions.
During install, incoming call plans would be generated to ensure that calls are routed and answered as the company needs them to be both inside and outside of business hours. Additional services such as voice-mail and auto-attendant can be configured during install, or later as the company develops its communications strategy.