Just a few years ago, Voice over Internet Protocol (VoIP) was something only large companies could consider, but today more and more small and mid-sized businesses (SMBs) are adopting VoIP technology. According to a 2006 Infonetics study, VoIP adoption in North America is expected to more than double by 2010 among all enterprises, but will triple among small organizations. Yet, there are still many conflicting messages about VoIP in the marketplace, and it isn’t always easy to sort out the facts.

Having run a business-class VoIP company since 2000, before many companies had even heard of the technology, I have seen VoIP evolve from a technology that businesses found exciting but didn’t trust, to the highly-reliable, productivity-enhancing tool that it is today. In truth, the process of deciding whether VoIP is right for your business is not as daunting as it may seem, especially when you’re equipped with the facts. First, we’ll start with the basics.

What is VoIP? What Can It Do for My Business? Very simply, VoIP takes voice, and converts it into IP (Internet Protocol) data packets. These packets are then transmitted over broadband data connections rather than traditional phone lines, and the signals are then translated back into voice at the destination. When done right, it’s a seamless transmission that sounds just like, and in many cases, better than, regular phone calls.

Because it’s IP, business-class VoIP provides major benefits that are unattainable with traditional phone service. These benefits include telecommuting, auto attendant, four-digit dialing between offices, remote office support, dial-by-name directories and more. Traveling workers can make phone calls and check voicemail wherever there is a broadband connection available. There are also cost savings to be gained by integrating voice and data, eliminating the need for two separate networks in an office. Redundant network connections available with VoIP enable business continuity, allowing operations to continue in the event of natural disasters, power outages, or other disruptions. There’s also flat-rate calling and Internet usage charges, which helps lower monthly expenditures and makes them more predictable.

Weighing Benefits and Costs: Does VoIP Make Sense for Your Company? Despite the savings that businesses can gain from switching to VoIP, cost savings is normally not enough to get businesses to make the leap. Although VoIP can deliver substantial savings on an ongoing basis, the upfront equipment investment and ongoing technical resources required to successfully install and manage an IP-based phone system can be costly for some companies. In fact, most businesses switch not because of the savings gained, but because VoIP can help them do business better.

However, VoIP is not the right choice for all businesses. Small business owners, especially, should undertake careful consideration before deciding to switch to VoIP. Many SMBs have limited internal technical resources and expertise, and for this reason, cannot risk experiencing quality and reliability issues that arise with new deployments, much less spare staff to manage a new, complex rollout.

Nevertheless, many companies agree that VoIP’s benefits outweigh its costs. With VoIP, businesses can easily reconfigure phone systems or scale up with staff changes. Also, unified communications capabilities allow companies to appear more coherent to both external and internal constituents. For example, Argus Research Group, an investment research firm with offices throughout Manhattan, Long Island, Connecticut and the United Kingdom has used their outsourced VoIP phone system to consolidate communications and streamline operations across multiple office sites.

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