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Is VoIP’s Main Value Cutting Costs or Generating Revenue?

Internet telephone services now are mostly viewed as a way to cut costs. That's changing, however, as customers recognize its flexibility and feature richness.

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The answer is that right now it is mostly about cost cutting, but that is beginning to change. A recent survey done by Deloitte found that 84 percent of businesses are deploying VoIP technology as a mechanism to reduce costs. I view the adoption of VoIP as having three phases. The first was telephone network bypass, allowing businesses to bypass the telephone network and save on telephone service charges. The second is the improved efficiency of convergence including deployment and management of a single “converged network," a single IT resource for management of both voice and data and centralized management of voice over multiple locations. The third phase is convergence at the applications level where new end-to-end applications integrate voice and data together improving productivity and customer satisfaction.

Today, businesses are utilizing VoIP to connect offices together and deploying IP-PBXs, thus saving money on their telephone bills and lowering the operational charges of their voice networks. We are beginning to see the use of the technology to improve productivity as well. VoIP allows the voice office applications to be extended over the internet to employees that are out of the office. Businesses of all size can now practically take advantage of the benefits provided by unified messaging. VoIP technology is supporting CRM applications for much smaller businesses that typically took advantage of the applications in the past.

Tomorrow we can expect to see VoIP become a technology that is embedded in a wide variety of IP applications. Voice will not be separate application but rather will simply be an aspect of a broader application that makes the application richer and more compelling. Clearly, eBay feels integrating Skype into their auctions (as well as other Web-based applications) will make auctions more compelling and improve transactions. This phase of adoption is just beginning, and we cannot yet imagine where it will take us. Employees of small and medium size businesses will access productivity-enhancing IP applications that support voice, anywhere at anytime, through a wide variety of interface appliances.
--Chuck Rutledge, vice president of marketing, Quintum

With all the recent technological advancements in VoIP quality, it’s time to take a serious look at what it can offer your small business, whether you’re considering upgrading or replacing your current phone system. VoIP delivers a powerful set of applications that can serve to reduce cost as well as generate revenue.

In the near term, many small businesses will be attracted to VoIP based on price–or total cost of ownership–alone. VoIP will assure feature parity relative to all existing phone systems, such as PBXs and Key Systems. It will readily provide functionality such as voicemail, transfers and three-way conferencing as part of a standard package. The technical configuration also makes use of voice and data services, converging communications at the workplace over one pipe. This often brings efficiencies and savings to the business owner. Likewise, all long distance charges are consolidated, eliminating the need for complicated long distance bills from another vendor. All of this is standard with VoIP implementation packages offered by more and more service providers across the country. And, if a small business chooses a fully managed or hosted solution, there is also space savings–you no longer need a “telephone closet”–along with easier maintenance and feature upgrades over time.

What isn’t as obvious to small businesses is the ability to use VoIP as a revenue generator and a productivity enhancer, because it brings with it many new and compelling feature capabilities. VoIP delivers a truly personalized communications system that allows end-user level customizations to fit each personality within an organization. The CEO can selectively receive calls from his/her top customers, while automatically routing all other calls to voicemail; the "road warrior" salesman can have his office phone ring his cell phone seamlessly so as to never miss a call; even the front desk receptionist can use simple point-and-click functionality to ensure every call is answered and routed to numerous options. A small business can also implement an auto attendant menu to pre-screen calls, maximize time savings, and play company ads while on hold.

As more small businesses adopt VoIP systems, they will not only realize the cost savings and lowered total cost of ownership, but they will quickly learn about VoIP’s inherent flexibility. Added productivity for your staff, as well as improved customer relationship management functionality present meaningful opportunities to generate revenue for your business.
--Rich Grange, President/CEO, New Global Telecom

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Carl Weinschenk is the Editorial Director of SmartBiz.
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