How to compute the TCO of a VoIP system

If you want to get the most value out of a Voice over Internet Protocol (VoIP) solution, assess the actual cost of having one. There may be additional or hidden expenses that you might fail to consider, so analyze the total cost of ownership (TCO) to fully comprehend your telecommunications spend.

TCO is the overall sum of procuring, deploying, and operating a VoIP system over its life cycle, which is typically five years. A VoIP expert should be able to give you an informed approximation, but here’s what to expect:

Upfront costs

Upfront costs are largely determined by whether you buy a VoIP system outright or rent it from a third party. Although the former carries a steep upfront cost, payment does 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 initial 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 go to the fees of the consultant or managed IT services provider that designs, deploys, and configures your VoIP system.

But since you’re installing a completely new phone system, you also need to factor in costs associated with 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 fee.

If you’re managing your VoIP infrastructure yourself, you also have to take into account monthly power, cooling, and maintenance fees. If you opt for hosted VoIP services, however, you are only 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 the help of a certified CRM expert.

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 actual costs of VoIP, call our experts today. We’ll help you figure out which VoIP solution is most ideal for your business and budget.

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