How to calculate the TCO of VoIP

How to calculate the TCO of VoIP

Picking a VoIP solution for your business can be tricky since there are so many data plans to choose from. But here’s a pro tip: Calculate the total cost of ownership (TCO) and not just the monthly fees.

What is TCO?
TCO is the overall sum of procuring, deploying, and operating a VoIP system over its life cycle, which is typically five years. An experienced VoIP expert should be able to give you an informed approximation.

Upfront costs
Upfront costs are largely determined by whether you buy a VoIP system outright or rent it from a reputable third party. Although the former carries a steep upfront cost, payment will not continue indefinitely. This makes sense for large, fully staffed corporations with massive budgets. Meanwhile, the latter option is better for small- and medium-sized businesses that prefer to pay a small monthly subscription rather than make a huge investment.

Beyond the price of the VoIP package, upfront costs also include additional costs like headsets, webcams, and a stronger network connection to ensure crystal-clear calls.

Implementation costs
A majority of implementation costs goes to the fees of the consultant or managed IT services provider (MSP) that will design, deploy, and configure your VoIP system.

But since you’re installing a completely new phone system, you’ll also need to factor in costs associated to training employees on how to use the VoIP system effectively and securely.

Operational costs
This covers monthly recurring costs of voice and data plans. For example, some service providers charge local and long-distance calls per minute, while others offer unlimited local calls for a fixed monthly cost.

If you’re managing your VoIP infrastructure yourself, you’ll also have to take into account the monthly power, cooling, and maintenance fees. If you opt for hosted VoIP services, however, you’ll only be billed for maintenance.

Upgrade costs
You should also set aside some room in your budget for VoIP upgrades. For instance, to improve customer service, you may need to integrate customer relationship management (CRM) software with VoIP, but that requires a certified CRM expert to facilitate the entire integration process.

Evaluating all the costs that apply to your business will give you a clear idea of how much you can expect to pay for your VoIP system. If you’re having difficulty calculating the real costs of VoIP, call our experts today. We’ll help you figure out which VoIP solution is most ideal for your business and budget.

Published with permission from TechAdvisory.org. Source.


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