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SNHU - IT-340 Network and Telecommunication Management
Written by: Chris Bell - October, 2013

VoIP for XYZ Company Final Draft - Saves Money



It's very important for XYZ Company to upgrade from a standard telephone system to a Voice over Internet Protocol (VoIP) system because they're a growing business that needs to start handling more phone calls, over longer distances and from more locations. XYZ Company has been slow at adapting to new technology over the years due to budget constraints and because of the popular phrase, "If it aint broke don't fix it." However, some technology upgrades can prove to have a return on investment when they save the company time and prevent them from having to hire additional staff. There are numerous reasons for upgrading to VoIP including:

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Saving the Company Money


In order for new software to be worth the money it needs to prove that it can either save the company money or improve a process to the point where additional staff will not be necessary. As of now, the XYZ Company has 25 employees of which two are dedicated to answering and transferring calls. They stand by their customer service and want to continue to answer every phone call instead of using an automated recording. The good news is that the procedure of each phone call does not have to change because of a new phone system.

The company can get the affordable VoIP system installed by leasing a server online and paying a smaller monthly fee for each user than they currently do for each telephone line they have. An immediate savings should look attractive to any business owner but "new technology" can be scary to get involved in especially if you don't understand it all that well. XYZ Company would need to get a VoIP router for about $750-$1000 and replace the phones with IP phones for about $125 each. They don't currently have an auto-attendant, but should they require one in the future it will be much easier to set up through the VoIP system. Business practices change, technology changes and people adapt to the newest ideas quicker and quicker. Companies can fall behind quickly if they don't keep up with the Jones' and this isn't even an expensive change.

"Upgrading to a VoIP system saves growing businesses money in several ways," says Kennedy with PCWorld. He goes on to say, "Employees can connect cell phones giving them availability to their customers off hours and VoIP supports free long distance phone calls no matter what device is connected to it. The company will pay less money on hardware and technician visits during down time. Instead, the system will be handled by the IT department and connect directly to the broadband instead of through a land line."


Adding Additional Phone Lines


It will also be cheaper to grow the phone system once it's switched over to VoIP. A standard phone system has a PBX with a maximum amount of lines that are all paid for individually. Some have 8, 12, 24 or more lines that may not all be used right away, but they all still need to be paid for as a package. A VoIP online server will allow you to lease as many lines as you need even if it's an odd number. Also, sometimes a standard phone system will require all of the phones to be upgraded when increasing the size of the PBX because the current phones don't have all of the capabilities that the new PBX has to offer. That can happen especially when a company gets a second location where phone calls need to be transferred back and forth.

Once the company has enough phone lines through their VoIP server they might consider saving more money by purchasing a server of their own. Until that point, they should stick with leasing it online so that they can get used to the new technology. Buying a server can cost upwards of $2500 to $5000 depending on the quality and size.

Less Down-Time


XYZ Company has had a lot of problems with down time over the last 10 years. When the phones shut off there are two people to call, the one who installed the system or the service provider. Typically, there isn't much either party can do over the phone so that have to send a technician to your facility to analyze what happened. On the other hand, a VoIP system with a leased server has very little down time and only one person to call about issues. Since most of the hardware is at their location they can check it immediately to see what's wrong. Even still, the mistake is usually fixed before you even have time to call about the problem because their server hosts many other businesses as well.

Land lines have actual wires in your company that can become loose and disconnect. The wires come into the building to the PBX and then allocate to each phone line leaving many possibilities for loose connections. The VoIP "PBX" is actually a server that will be leased online and it connects to the company network. However, the downfall to this same feature is that when your Internet connection goes down your phone lines will as well. Since all of the phone calls are transmitted online the system will need a connection to the Internet to make any calls.

In the July 2013 report, Bandwidth Doesn't Matter; Availability Drives Enterprise Network Costs, authors Neil Rickard and Danielle Young write, "In the developed world, the marginal cost of bandwidth is so low that rightsizing capacity has little impact on WAN cost. However, the cost of improving availability remains high and downtime is less acceptable, making rightsizing network availability the key goal for enterprise network designers."

Dun & Bradstreet reported that companies have an average of about 14 hours of downtime per year, and most say that it was very damaging to their business practices. (Welden, 2013)" Companies want to be available to their customers when they're in need and that means anytime, not most of the time. A standard in the business world states that 80% of revenue comes from 20% of your customers no matter how big or small the company might be. If part of your yearly downtime comes during the time when one of your larger customers are in need they will consider other options going forward. Perhaps they could give half of the business to a second vendor in order to not have all their eggs in one basket. Situations like this could be detrimental to any business.

It's essential for companies to minimize downtime and have a plan in place for when downtime occurs. If you don't have a plan of attack you will lose customers during 14 hours every year and there's no telling who those customers might be. Perhaps, when phone lines go down the main business number can be transferred to a cell phone as a temporary fix.

Gateway


A gateway is similar to a server but it's much less expensive to purchase. Gateways can help save bigger companies a lot of money on long distance calls by putting one in each location. For instance, a company with two locations and T1 connections in place can purchase a gateway for their VoIP system. The phone call from the US will travel along the T1 line to their location in Africa, and bounce off the gateway as a local phone call. Having the T1 line isn't enough in this situation to turn long distance calls into local calls. Using this set up will allow a company to make calls from the US to Africa as local phone calls instead of paying long distance charges.

However, when small businesses lease VoIP equipment online they automatically gain access to the multiple gateway connections already in place. For instance, Vontage is set up to lease VoIP services and they do not charge anyone for long distance calls because, through gateways, they can make locals calls in Las Vegas from New Hampshire. Once you lease the software you become part of that package and simply pay a monthly fee per user.

Video Conferencing


This is where the "priceless" part comes in for XYZ Company. If a few thousand dollars isn't in the budget for a VoIP system then visiting customers on the west coast wouldn't be either. However, once upgraded to Voice over Internet Protocol, XYZ Company will be able to schedule face-to-face time with customers that they never have before. The owner of a small business isn't usually an IT professional, so details on bandwidth and gateways isn't the best approach to explaining a return on his investment.

Being able to conduct video conferences will allow a company to have many more face-to-face interactions with customers that they're trying to develop. Typically, companies will send a few employees on the road to visit customers with high potential, but is that really the best approach? A hired employee will need to go through a lot of product training before they're comfortable enough on the road alone. There are also travel costs, employee salaries and time-per-appointment factors to consider. How many customers can one employee visit compared to the amount of video conferences that can be conducted in house? One employee could conduct as many video conferences in a week that 2 employees on the road could conduct in a month and the cost would be thousands and thousands of dollars cheaper.


XYZ Company is also ISO 9001 certified as a wire harness manufacturer. They cut wire to length, crimp terminals and solder to customer specifications. Many times email and phone calls aren't enough to convey exactly what the customer is looking to receive, so we conduct many appointments that include a sales person and a quality employee. Being able to conduct these meetings through video conferencing will save the company thousands of dollars per year and maximize the amount of employee time in house.

As more and more companies advance technologically XYZ Company could end up trailing behind in the industry without VoIP software. Customers have different expectations that they expect from their vendors and, whether it's one customer or one hundred customers, you're expected to deliver. Video conferencing doesn't mean that all of the employees need to start contacting customers through video but it does need to be available for when a customer requests it. At this stage of the game a vendor should not have to say, "Sorry we don't have that capability here yet."

Sales Management and Owner Benefits


Who doesn't like talking directly to the owner of a company when buying their product? When you speak to management or an owner you feel as if they're going to be fair. With video conferencing it will be very easy for sales staff to notify their management of "appointments" that they can pop into for a quick face-to-face hello. At that point the customer would have seen their account manager and the sales manager at the cheapest possible cost to the owner. In the case of a smaller company like XYZ Company it could also be a good idea for the owner to step in for a minute to introduce him/herself to, again, leave the customer with a good feeling about the company they're about to buy products and services from.

Citrix Online reported that sales close rates went up 34% when upgrading to video conferencing. There's something about being able to look into a person's eyes that builds trust much quicker than hearing a voice over a phone. By seeing the person you're buying products from you can most likely figure out if they're in an office and they can literally show you the product you're about to purchase. I've gone to visit customers in my past and remember visualizing the person and their office based on a few conversations I had over the phone. However, when I arrived on the scene it was much different than I pictured. Not only would I have saved hundreds of hours of travel time by video conferencing instead, but I would have skipped the wondering part of who they were, what they looked like and if I could trust them the first time I spoke to them face-to-face.

Sales managers always want their sales staff to keep in touch with their customers, see their customers face-to-face and make sure that they are available to accept phone calls at anytime. With a "find me/follow me" option a call will be forwarded to their extension first and then to the mobile phone if the extension wasn't answered. As companies grow the sales staff gets farther and farther away from the receptionist making it difficult for the receptionist to know if each person is available at any given time. The "find me/follow me" option helps the customer get what they want, the sales person make more commission and the owner make more profits all at once.

Barge and Whisper


A VoIP phone system allows for two options that will strongly help XYZ Company grow and train employee's on the phone. The barge option allows the sales manager to listen to the conversation of the employee and customer without anyone knowing that it's happening. The whisper option allows the sales manager to actually talk to the employee without the customer hearing anything. This way the manager can help the trainee close sales during the early stages of their development. Both options will, again, help the entire company and the customer in need.

Better Work Ethic


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Companies usually put dress codes in place for their employees which will drastically change when a video conference can pop up on any given day. Employees will be expected to dress nicer everyday which improves attitudes and work habits. When a person dresses well they go about their day with a better attitude as if they can accomplish more. A person walking out of their house in sweats headed to the dump won't feel the same as a person dressed in a tux for a wedding. People that dress nicer each day accomplish more than those that don't.

Once VoIP software is available to all of the employees they can schedule appointments daily as if they're phone calls. Since it's a better way of building a quicker relationship with a customer the sales staff will feel like they're accomplishing more and, therefore, work even harder as a result. As you can see there is a chain reaction of good work ethic to come when upgrading to VoIP software which include a better dress code, better attitudes, more efficient sales calls and more profits for the company. Not only that, once the company makes more profits the sales staff will make more commission which gives them yet another incentive to work harder.

In conclusion, I think VoIP software would be an excellent way for XYZ Company to take the next step in growth. That doesn't mean every sales person needs to start scheduling 10 video conferences per week. It means that having it available and starting to understand the software will be a very good long term investment. We can all see where the world is headed and where it's not. It's not headed back to snail mail. It's headed directly to face-to-face contact for every interaction. Phone calls will be deemed unreliable and untrustworthy compared to video conferencing. It's important that they take a step forward by having VoIP software available instead of waiting for a customer to ask the question.


References:


Jason Kennedy (April, 2012). How Switching to VoIP Can Save You Money. Retrieved from:
http://www.pcworld.com/article/254659/how_switching_to_voip_can_save_you_money.html

David Welden (July, 2013). Downtime Numbers are Downright Distressing. Retrieved from:
http://www.fierceenterprisecommunications.com/story/downtime-numbers-are-downright-distressing/2013-07-25

Citrix. Retrieved from:
http://news.citrixonline.com/wp-content/uploads/2013/01/Increase-Sales-Close-Rates-by-34-Percent-with-Video-Conferencing.pdf

Amber Newman. 10 VoIP Features That Can Benefit Your Small Business. Retrieved from:
http://www.techrepublic.com/blog/10-things/10-voip-features-that-can-benefit-your-small-business/