During the voice over Internet protocol (VoIP) evaluation process, one of the key factors separating vendors from each other is the total cost of ownership (TCO). If you’re only looking at direct costs, such as hardware or subscription fees, you end up having a rude awakening when it’s time to look at your total costs. The typical enterprise has telecom expenses as one of its biggest expenses, with Dimension Data finding many companies failing to account for factors causing cost fluctuations, such as increasing data costs and higher operational costs associated with employee-owned phones. So how do you figure out the TCO for your VoIP solution?
The capital expenses (CAPEX) cover the costs that are one-time or otherwise limited in scope. These are capital investments related to VoIP, which cover hardware, installation costs, configuration and procurement costs. Training costs included under CAPEX are one-time costs, such as purchasing a training program or the costs associated with implementing a learning management system.
Your CAPEX costs for a VoIP solution vary greatly depending on whether you choose a cloud-based or on-premise VoIP system. A cloud-based system has limited, or no, hardware needs beyond a network infrastructure capable of handling the voice data traffic. An on-premise VoIP has much higher CAPEX costs, due to the hardware requirements and software licensing fees.
Many VoIP expense management issues come from the operational expenses (OPEX) of the system. The VoIP solution has a variety of ongoing costs associated with it, with the cloud-based systems taking the lead in this expense category. Here are the typical OPEX associated with VoIP deployments:
Cloud-based VoIP solutions typically have a subscription cost billed on a monthly, annually or usage basis. The pricing structure varies between vendors, with some giving you a pay-as-you-go system and others charging a flat rate for access. Support and maintenance costs are built into this subscription fee, although support may be limited without an add-on service agreement.
If you don’t handle in-house support for your VoIP system, you need to pay for assistance from an IT services company or the VoIP vendor. Some cloud-based services also require additional payment for more extensive support options.
Cloud-based VoIP vendors handle maintenance costs, but on-premise systems place this cost entirely in your lap. System maintenance costs cover everything from updating the software to performing preventative maintenance on potential issues.
Cloud-based VoIP vendors also typically handle software upgrades, although the subscription cost may change to reflect a different ongoing software license cost after major upgrades. On-premise systems need to purchase software upgrades as the vendor enhances functionality and security.
Ongoing Training Costs
These are all other costs associated with training, including self-service training, than the one-time training costs, which fall under CAPEX.
Your network costs also impact the VoIP OPEX. Monitoring, security and connectivity are a few factors to consider when making this calculation, especially if you upgraded your network to accommodate the VoIP solution.
Full visibility into the TCO of your VoIP solution helps you understand exactly how much of your budget you’re allocating on a regular basis. The costs run far beyond the amount required to set up the VoIP hardware and pay for ongoing subscription costs. Remember to also account for any network costs heavily linked with the VoIP solution.