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The VoIP market is expected to exceed $183.7 billion by 2027. While Voice over Internet Protocol is being adopted at a record pace today, some business owners are still unaware of what it is or what benefits it offers.
If you find yourself in this category of businesses, now is a good time to learn the answers to a few questions, such as:
- What is Voice over Internet Protocol?
- What are the benefits of Voice over Internet Protocol?
- How does Voice over Internet Protocol work?
Keep reading to learn the answers to these questions, along with the pros and cons of VoIP for your business.
What Is VoIP?
Table of Contents
Voice over Internet Protocol or VoIP may sound complex and confusing. However, it’s not as complicated as it may seem.
VoIP is a technology that lets businesses make calls via their broadband internet connection instead of a traditional analog phone system.
It works by converting sounds into a type of digital voice communication. Once converted, the sound is moved through your internet broadband.
Put simply, a VoIP system means you use your internet connection to make calls.
Pros and Cons of Choosing Voice over Internet Protocol for Your Business
Now that you know what it is, it’s time to learn more about what it offers. You can ask more specific questions to a company offering IT support specializing in VoIP.
While this is true, a basic overview of the pros and cons (found below) of VoIP will help you decide if it is right for your business.
Pros of VoIP
Before we consider the cons of VoIP, it’s important to understand the countless benefits. Let’s take a look, starting with the price point:
More Affordable
This is a benefit that most businesses can’t afford to overlook. Finding ways to reduce expenses is a must when it comes to your bottom line.
One way that modern businesses are doing this is by utilizing a VoIP phone system.
Some businesses can cut their phone bill by more than 50% with VoIP (this varies from business to business). Keep in mind, though, moving to VoIP doesn’t guarantee reduced costs.
While this is true, you will see some considerable cost savings.
The Cost of PBX
Private branch exchange or PBX is a piece of hardware you must keep on-site. It connects your landline phones in your office and is usually quite expensive.
In some cases, it can cost tens of thousands of dollars.
Some may argue that IP phones cost the same; however, the cost varies based on what features you choose.
Also, PBX installation is expensive. It can cost a business between $500 and $2,000 per user. This means even smaller businesses with just a few employees must invest in physical hardware.
You don’t have to have this expensive hardware with a VoIP system. That’s because your broadband connection will power the service.
Eliminate Additional Wiring Costs
Using your broadband connection means you can eliminate additional wiring. That’s because a VoIP network provides for both data and voice on the same channel.
In most cases, your VoIP desk phone only requires a single ethernet to connect. You can also go completely wireless with VoIP, which results in even more cost savings.
Calling Costs
VoIP calls are more affordable than those made on the PSTN (Public Switched Telephone Network) or a traditional circuit-switched phone.
Part of this cost relates to the reduction in data carriage costs. When first offered, data was too expensive for most small businesses. Even larger organizations would face significant bills.
Thanks to faster internet speeds, the cost for moving data has fallen, too. VoIP can help you save on both domestic and international calls.
Simple Conferencing Capabilities
If you don’t have to have dedicated phone lines, conferencing with multiple people is much easier. The traditional phone systems will allow conferencing, but you must pay for an additional service and host several callers every time.
If you choose VoIP with a converged data network, the features are native. This means their cost is already built into the affordable cost of the VoIP service you receive.
Along with hosting conference calls easily, VoIP allows you to transfer different media formats, too. This includes text, video, and images.
During your video or phone calls, you can significantly improve your ability to solve issues or conduct presentations on the go.
Additional Features
With a VoIP system, you have many features that will help improve your business’s operational proficiency. One example is the ability to forward voicemails to text or email using a mobile app or instant messaging.
If you would rather text than make a phone call, a VoIP system has this need covered. It is possible to send notifications to your customers using business SMS, which allows you to manage your business easily and on the go.
A VoIP phone system lets you use softphones and mobile apps to check voicemails and transfer calls. This means that desk phones aren’t as valuable during your day, and not having one won’t impact the service you provide your customers.
You also receive more advanced features, such as call reporting, advanced statistics, instant messaging, video conferencing, real-time call center monitoring, and call recording. While these features can also be offered with traditional phone systems, they are too expensive for most small businesses.
With a VoIP phone system, you have the most advanced features on any device you choose.
Portability
The comfort and convenience offered by a VoIP phone system can be used across the globe. If you have a broadband connection, it’s possible to log into your VoIP phone system. Doing this will provide you with a dial tone.
No matter where you are, if you have access to the internet, you shouldn’t have any problems with cost or connectivity.
You can also access your VoIP system through email or while you are on the road. All you must do is take your IP phone or headset and easily contact clients or staff with a low-cost call.
Improved Call Quality
Since VoIP uses your internet connection, it offers a much higher call quality than the alternative.
With a VoIP system, you get HD voice thanks to internet connectivity. This provides clarity and crisp audio.
Higher Scalability
Scalability is another benefit offered by VoIP systems. It also makes it an attractive option for businesses that are still growing.
While this benefit of VoIP is discussed often, do you know what it really means?
Most business owners prefer a phone system that will grow alongside their business when given the options.
With a VoIP solution, you don’t have to worry about buying costly hardware or adding dedicated lines as your business grows.
Consider all the different situations where this could be beneficial. For example:
- Opening a new branch or store
- Experiencing a spike in demand for the holidays
Regardless of the situation, you can instantly change your preferences based on what you need. You don’t have to worry about buying more hardware or paying for additional lines.
Fax Over IP
When you opt for a VoIP phone system, you will receive Fax over IP services. This is typically included in your service charge.
With fax over IP, you can eliminate the higher costs of long-distance facsimile. This will also improve compatibility between the machines and the overall reliability of service.
Remember, fax information is moved in data packets. When sent over the internet, it will improve efficiency significantly.
What’s even better, you don’t even need a fax machine to receive or send a fax.
Simple to Manage
A VoIP system is easy and straightforward to use. Employees and administrators can begin using it quickly and be able to learn new features as they go.
Even better, using it doesn’t require a degree in telecommunications.
If your employees are used to using a traditional phone system, they will find transitioning to a VoIP solution quite easy.
The VOIP system was designed for two basic users. The first user is the one who has the mindset of “change is hard.”
With these, the VoIP system was designed to work the same as the traditional phone system they are accustomed to.
The second user is the one that has the mindset of “change is exciting.” VoIP phone systems offer user-level access that is completely new.
Some VoIP users want more control over their own phone and extension. Changing the answering rules, running reports, and adjusting time frames can all be done with a VoIP system.
Easy Initial Setup
Another huge benefit of VoIP phone systems is that they are simple to install. You don’t have to hire a technician to run wire through the building.
Modern IP phones are plug-and-play. You can use your current Cat5 or Cat6 wiring rather than having a dedicated connection. While you have the option to use a dedicated ethernet, it isn’t necessary.
The setup of the VoIP system can be handled in a few ways. Also, what is required will vary based on the provider you use.
Bigger providers may program your phones off-site and ship them to your office. They will rely on you to plug in the phones and stay hands-off.
While some companies offer a how-to guide, others will provide on-site training. It’s best to think about what is best for your company and employees to ensure the right setup option is selected.
Cons of VoIP
While the benefits offered by VoIP phone systems are extensive, there are also some disadvantages you should know about. Being fully informed will let you know if this system is right for you and your team.
You Must Have a Reliable Internet Connection
Your VoIP solution will only work as well as your internet connection. If you have low network bandwidth, then the service will likely suffer.
VoIP doesn’t use a lot of bandwidth. However, you do need low latency on your network.
Jitter and Latency
Besides speed, you also may deal with connection issues. That’s because your VoIP system will be affected any time there is a disruption in your internet.
All internet-based technology deals with issues of jitter and latency. These situations occur when the data packets encounter transmission delays or if they aren’t reassembled properly.
Limited Location Tracking
Since VoIP is accessible and portable, it’s challenging for a third party to originate the location of a call.
If a call comes from an IP address and there is no GPS data or cell tower information that can be tracked, pinpointing a location is impossible.
While most callers don’t require this information, it can be a problem if a call is made to 911 or the police. In these cases, you must communicate your location to receive help.
Is Voice over Internet Protocol Right for Your Business?
As you can see, there are several advantages offered by Voice over Internet Protocol. While this is true, there are also some disadvantages you need to be aware of.
Fully understanding what VoIP is and what it offers will help ensure you make an informed decision for your business. It’s also smart to speak to a few different service providers to get service quotes when choosing a supplier.
Did you find the information and resources available helpful? Are you looking for more information on topics like education, digital marketing, technology, and business? If so, make sure to read some of the other blogs and guides we have posted.
