Costs and the rollout plan

Budgeting for VoIP depends on which offices are upgraded first: headquarters or remote.

Budgeting for VoIP depends on which offices are upgrades first: headquarters or remote.

Moving to voice over IP requires spending money on IP PBXs and other equipment. But how much to budget even for that depends on your approach to the VoIP rollout.

Two philosophies exist. One is to start small and grow, first outfitting a remote office or two. This is a good strategy for companies that need to purchase new telephone equipment for outlying offices - either to update aging key systems, to standardize a hodgepodge of equipment or when building new remote facilities, says Mike Kirch, a ROI specialist for Cisco.

Initial capital outlay is minimal. Your staff can gain experience with the technology on a small scale, and gather usage, cost and savings statistics before messing with a functioning mission-critical phone system at headquarters. This lets you better understand the needs for the largest offices, thereby maximizing ROI as you slowly bring VoIP to all sites. Savings can help offset the next set of costs.

The second philosophy instead says to do the hubs, then the spokes. You implement VoIP at the main office, and/or the call centers and large regional offices. You then tie in branch offices using smaller, less expensive PBXs, gateways or hubs. This approach offers "the highest return over the life of an enterprise implementation," says Jorge Blanco, a vice president for Avaya's converged systems and applications group.

This plan requires the highest upfront investment but offers several advantages. With the hub done, VoIP is managed centrally from the get-go. Companies engage in the biggest cost-savings for their largest populations of users first.

This is a good method for companies moving their headquarters into new buildings. It is also appropriate for those that have been using outsourced PBX services such as Centrex.

To decide which is right for you, "look for a payback period of less than a year," advises Ian Campbell, CEO of Nucleus Research, which specializes in IT ROI research. If you can't get such quick payback periods, he adds, "don't do it." A wireless IP WAN might help with toll bypass, or your long-distance provider will renegotiate lower rates for you, he says. "Think about negotiating before doing your VoIP ROI calculations."

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