When Does VoIP Make Sense For Your Business?

The Voice over IP (VoIP) landscape has exploded in the last five years. In its early implementation, Internet-based telephony was a hassle to implement, inconvenient to use, and far less reliable than regular or traditional phone service.

Today, our cup runneth over with VoIP services and providers, with pricing and features packages appropriate for everyone from individual/home users to small/medium businesses to the very large companies.

VoIP lines can connect seamlessly to regular lines and wireless numbers; to the end user, making a VoIP call no different from placing a call on a cell phone or landline.

VoIP advantages
Early adopters of VoIP were motivated primarily by cost; depending on their phone usage and long distance habits, they could save tremendously on phone bills because:

  1. Most VoIP plans don’t charge extra for domestic long distance (and some services offer free international calls to certain countries, as well).
  2. VoIP services often include, at no extra charge, features for which the traditional telephone companies impose extra fees, such as caller ID, call forwarding, three-way calling, and voicemail.
  3. VoIP has not been subject to all of the taxes and government-imposed fees that make up a large portion of the typical phone bill.

The big tradeoff in the early days was a lower quality in voice transmission and occasional dropped calls—pretty much the same disadvantages that plagued cellular phone service in its early days.

However, as VoIP has matured, transmission quality and reliability have improved to the point where they’re now close to that of regular telephone service. VoIP users are also drawn by other advantages of IP-based voice services, including the ability to have VoIP phone numbers in the area code of your choosing, regardless of where you’re physically located.

In effect, this gives you a low-cost way to maintain a virtual “local” presence in cities in which you do business so that customers there can call you without long distance charges, at much lower cost than alternatives such as an 800 number.

Another great advantage is that many VoIP services offer free voicemail services such as e-mail notification when you receive a call (along with a .WAV file of your voicemail messages sent to your e-mail address) that are either not available or cost extra with traditional telephone service packages.

VoIP disadvantages
VoIP technology still has a few disadvantages when compared with traditional phone service. Most notable is the inability to make phone calls during an electrical outage or when the Internet connection is down for any reason. In addition, some services that depend on phone lines, such as monitored alarm services, may require a landline, although there are now some alarm companies that offer service that works over a VoIP line.

Businesses that must rely on their phone service should take steps to ensure that their disaster recovery/business continuity plans cover their VoIP service.

Measures might include maintaining some regular telephone lines for emergency use, backup generators, and/or redundant Internet connections with failover capability.

Finally, VoIP services are subject to the same security concerns as other Internet traffic.

Selecting VoIP services
Small businesses may be able to save a lot of money by using VoIP services primarily aimed at consumers, such as Vonage or Sunrocket. These and other consumer-level services offer small business plans with online account management and may include a separate fax line.

A good solution for a small or home-based business that only has two to five employees and needs only a couple of phone lines is to order two VoIP boxes and plug both into a two-line base station system that supports multiple two-line handsets. Each worker can then use either line.

Larger businesses may need features that consumer level VoIP providers don’t offer, such as the ability to transfer calls, put calls on hold, or create conference calls among more than three parties—although in some cases the telephone equipment you choose can allow these activities, even if the provider doesn’t offer them. Larger VoIP providers generally include features like conference calling, music on hold, call queuing, scheduling and remote office features, and fax support.

Regardless of the size of your company, VoIP is now a viable option to traditional phone service, and may allow you to get more features and a wider scope of calling at a lower cost.