The ROI of VoIP

When it comes to VoIP, most network managers are satisfied that the technology works. The challenge is developing cost analyses: What will the new technology cost to roll out and support, and what benefits can companies expect to reap?

There's no single shrink-wrapped answer. But Nemertes Research interviewed 65 IT executives at leading-edge companies across a range of industries and developed real-world guidelines for analyzing the costs and savings that can result from VoIP projects.

Step 1. Preplanning is key

In most projects, the first stage is preplanning in which companies assess the network, including present and future applications requirements and future business plans, such as new moves, company growth, and merger and acquisition possibilities.

It's at this stage that companies answer the fundamental question: Is it worth moving to a converged infrastructure, and if so, at what pace?

Once companies decide the technology is worth further exploration, they enter the official "planning" stage, during which they should perform several tasks, including assigning a project leader, evaluating management and security options, and working to raise end-user excitement in the project.

Most importantly, they're developing a detailed ROI to validate the project financially.

Step 2. Determine start-up costs

Start-up costs fall into two general categories: operational and capital. In both cases, the figures in this report represent actual costs that companies participating in the research study incurred, starting with the planning stages and ending once the initial troubleshooting was finished.

For operational costs, companies provided the staff hours or actual dollars devoted to the baseline network assessment, project planning, installation of the IP PBX(s) and accompanying handsets, and troubleshooting. Companies that installed a unified messaging system or audio/video bridge with their initial implementation also included the time it took to handle those tasks.

Capital costs are defined as the IP PBX, phones and network equipment explicitly installed for the initial VoIP rollout.

Part of the planning phase includes a baseline-network assessment, or a network readiness study. Companies typically budget about $20,000 for the assessment, though larger companies spend $50,000 or more. Typically, a vendor, systems integrator, value-added reseller, carrier or internal IT staff evaluates the organization's network, running simulated voice traffic over it to determine what upgrades are necessary.

The baseline network assessment has become a crucial part of any VoIP implementation. Although some companies abide by the finger-to-the-wind test, a growing number of IT executives strongly suggest conducting such an assessment, despite the cost. "VoIP is so new to us. We'd be concerned with what it does to our data traffic. We can't take it casually," says Irving Tyler, CIO of Quaker Chemical Company in Conshohocken, Pa.