Cutting the costs of VoIP

Cutting the costs of VoIP

How to reduce hidden costs and find secret savings in a VoIP roll-out.

Ongoing operational costs

Ongoing operational costs also varied by vendor and roll-out size. Perhaps the most interesting general finding is that operational costs scale quite well. The more users on the system, the more users each IT staff member handles. In other words, the per-user cost generally drops drastically when the roll-out size increases.

On average, companies spend US$473 per unit, per year to operate their IP-telephony system. This figure takes into account the number of staff hours companies spend per year maintaining and managing the system internally, multiplied by the average hourly rate of the staff involved. Additionally, it includes the cost of third-party management services. Those costs combined, divided by the number of end units in the system, provides the per-unit cost.

For small roll-outs with fewer than 300 users in the system, the per-unit cost is US$1,152. It drops drastically for roll-outs with more than 5,000 units online. Those organisations spend only US$37 per unit. The ratio of IT/telecom staff to end unit increases. Most of the work required is at the switch or the management or monitoring system. So there is not a proportional IT-to-employee correlation as the number of employees on the system increases.

Savings estimates

It's clear how organisations are spending money when it comes to VoIP, but how are they saving money?

Despite published reports to the contrary, companies are saving money with VoIP, but those savings may not show up immediately. We still find companies saving money in WAN costs, cabling, ongoing operational costs and administrative duties.

Companies also are spending more money in other areas, including operational start-up, repair and handsets.

Organisations save 15 percent to 40 percent on their WAN costs when they move to VoIP, and the average is 23 percent. The savings result from three primary areas:

  • Migration to MPLS, typically from frame relay, ATM or leased-line networks. VoIP is the driver to switch to MPLS, but the overall costs for the same-speed circuits are less.
  • Integrated access, whereby companies combine voice and data over the same access lines, thus eliminating underused pipes.
  • Integrated core circuits. Organisations combine their voice and data networks with an average use of 60 percent and peak use reaching 75 percent to 85 percent (on extremely well-managed networks). They eliminate the need for idle, higher-speed circuits in the core.

Cabling a new building for an all-IP network continues to save organisations about 40 percent compared with wiring for TDM and IP. In some cases, companies even consider using all-wireless networks that eliminate the need for many desktop drops. But for now, the majority are using Category 5 or Category 6 cable with one or two drops per desktop, rather than the TDM world's three or four drops.

MAC continues to be a big cost-saver when a company switches from TDM to VoIP. The trouble with large enterprises is that they don't see all the savings at once, because their roll-outs evolve. Companies are spending US$124 per MAC, on average, with a range of US$65 to US$400, depending on the city where the MAC takes place and whether a third party is handling it. By switching to VoIP, those per-MAC costs drop to less than US$10.

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