Re-posted from Dec. 2007
I think that part of the job of a senior executive is to foresee the risks that you can do something about……..and do something about it. You may never get the credit you deserve for championing a cause like this. But you will look like the smartest person in the room when a disaster strikes and you’ve already planned for it. Your boss or your shareholders will wonder what other things you’ve planned for that they haven’t thought of………..making you INVALUBLE to the company. Take three minutes to read this post, I think it will be worth your time.
Hosted VoIP is a service offering whereby your phone system would be owned by the hosting company and sit in a secure data center, accessible to you by dedicated T-1, the Internet or one of many different types of private data networks. I must admit, I am surprised at how many companies I talk to about hosted VoIP who quickly dismiss it because of the pricing structure. I am not an accountant but I did earn a finance degree from the University of Akron. During that time, we extensively studied concepts like Return on Investment and payback period for an investment, along with numerous other ways to analyze a potential investment. To me, it doesn’t take much analysis to determine that Hosted VoIP solves some of the age old telecommunications problems that have faced owners and senior managers for years. Problems that one cannot be blamed for not solving in the past because hosted VoIP had not been invented. I’m not talking about features or call quality, what I am talking about is fault tolerance and disaster avoidance. Without fail, every executive I talk to about their voice and data services informs me that those services are ‘the lifeblood of their business’. They tell me that they are losing thousands of dollars per hour when their customers try to call them and receive a busy signal or a “temporarily out of service” message. Why then, are they so reluctant to invest relatively few dollars per month to protect themselves from 80%-90% of the events that can cause this to happen?
One reason is that many of those decisions NOT to move forward are made behind closed doors without input from their trusted adviser. Their trusted adviser will remind them of all of the disasters that can occur to take their voice and/or data services down. And worse, they will have little or no control over when those services will be restored. Their only recourse is to drop everything else on their schedule and frantically call their provider and yell, beg and threaten lawsuits if their services aren’t restored ASAP. Hopefully at that point, the decision makers will realize that a small monthly premium is more than worth potential for loss.
It may cost an extra 20% per month to use a hosted VoIP company compared to your current telecom expense. But it’s not just extra cost. There are some tangible, justifiable elements that go into the pricing. For instance, they are typically located in a secure data center with backup batteries and diesel powered generators, dual entrance for electricity and telecom services, multiple phone carriers possibly delivered via fiber optics (as opposed to copper), state of the art fire suppression and temperature control, power regulation equipment and 24/7 monitoring. These data centers typically cost more than a million dollars to build and obviously there is a maintenance cost. To pay an extra 20% for this type of protection seems small to me.
Of course, there are events that can occur that would cause YOUR access to this facility to be compromised. Events that effect your building such as a T-1 outage, power outage, or disaster such as flooding, fire or many other things. But in a hosted VoIP environment, your ability to re-route your phone lines YOURSELF to a secondary location is simple and totally within your control. That secondary location can be another facility of yours or in extreme cases you can route calls to your employess’ cell phones of home office. In the case of a fire or flood that would cause you to vacate your building for an extended period, it would be easy to semi-permanently re-route calls to a temporary facility. Best of all, if one of these events were to happen, you wouldn’t lose one call; your customers would at least be able to reach your voice mail which is safely tucked away inside your secure data center…..retrievable via any working phone. Can you duplicate this redundancy for the cost? If you lost just one order or potential customer during a prolonged outage, how easy would it be to justify the extra 20% to 30% that hosted VoIP may cost you?
In addition to the redundancy and fault tolerance, keep in mind that you do not have to buy or maintain a phone system. The initial cost of the phone system is just the beginning of what you will pay. Make sure to factor in the maintenance contract that you won’t have now, upgrades and the MAC’s (moves, adds and changes) that will cost you a minimum of $50 just to move a persons office from one place to another or add a new employee.
As if the previous advantages weren’t enough, another advantage to a hosted VoIP system is the ability to operate multiple locations as one. Regardles of the city, state or country, you can have all of your existing phone numbers ring to one central office to easily be transferred the appropriate department or extention. This will allow for a reduced load on the support staff at smaller facilities, better coverage for your busy season, vacation or illness. It would even allow you to bring all of your attendants to the same facility where three people may be able to do the work of five. How you re-deploy your other two persons is up to you but here are a few questions to consider. Is your customer service department overworked? Has your personnel budget been cut? Have you lost employees that you haven’t been able to replace? You get the picture. If you calculate the cost of just one employee with taxes and benefits wouldn’t it be simple to justify an extra 20% or 30% on your voice and data services?
I want to re-iterate that you cannot eliminate 100% of the scenario’s that may cause you to lose your voice or data services. But if you can eliminate 90% of them, you are doing everything you can reasonably do to protect yourself. Most companies that I deal with wait until AFTER a disaster strikes before they do something to protect themselves.
Hosted VoIP is a service offering whereby your phone system would be owned by the hosting company and sit in a secure data center, accessible to you by dedicated T-1, the Internet or one of many different types of private data networks. I must admit, I am surprised at how many companies I talk to about hosted VoIP who quickly dismiss it because of the pricing structure. I am not an accountant but I did earn a finance degree from the University of Akron. During that time, we extensively studied concepts like Return on Investment and payback period for an investment, along with numerous other ways to analyze a potential investment. To me, it doesn’t take much analysis to determine that Hosted VoIP solves some of the age old telecommunications problems that have faced owners and senior managers for years. Problems that one cannot be blamed for not solving in the past because hosted VoIP had not been invented. I’m not talking about features or call quality, what I am talking about is fault tolerance and disaster avoidance. Without fail, every executive I talk to about their voice and data services informs me that those services are ‘the lifeblood of their business’. They tell me that they are losing thousands of dollars per hour when their customers try to call them and receive a busy signal or a “temporarily out of service” message. Why then, are they so reluctant to invest relatively few dollars per month to protect themselves from 80%-90% of the events that can cause this to happen?
One reason is that many of those decisions NOT to move forward are made behind closed doors without input from their trusted adviser. Their trusted adviser will remind them of all of the disasters that can occur to take their voice and/or data services down. And worse, they will have little or no control over when those services will be restored. Their only recourse is to drop everything else on their schedule and frantically call their provider and yell, beg and threaten lawsuits if their services aren’t restored ASAP. Hopefully at that point, the decision makers will realize that a small monthly premium is more than worth potential for loss.
It may cost an extra 20% per month to use a hosted VoIP company compared to your current telecom expense. But it’s not just extra cost. There are some tangible, justifiable elements that go into the pricing. For instance, they are typically located in a secure data center with backup batteries and diesel powered generators, dual entrance for electricity and telecom services, multiple phone carriers possibly delivered via fiber optics (as opposed to copper), state of the art fire suppression and temperature control, power regulation equipment and 24/7 monitoring. These data centers typically cost more than a million dollars to build and obviously there is a maintenance cost. To pay an extra 20% for this type of protection seems small to me.
Of course, there are events that can occur that would cause YOUR access to this facility to be compromised. Events that effect your building such as a T-1 outage, power outage, or disaster such as flooding, fire or many other things. But in a hosted VoIP environment, your ability to re-route your phone lines YOURSELF to a secondary location is simple and totally within your control. That secondary location can be another facility of yours or in extreme cases you can route calls to your employess’ cell phones of home office. In the case of a fire or flood that would cause you to vacate your building for an extended period, it would be easy to semi-permanently re-route calls to a temporary facility. Best of all, if one of these events were to happen, you wouldn’t lose one call; your customers would at least be able to reach your voice mail which is safely tucked away inside your secure data center…..retrievable via any working phone. Can you duplicate this redundancy for the cost? If you lost just one order or potential customer during a prolonged outage, how easy would it be to justify the extra 20% to 30% that hosted VoIP may cost you?
In addition to the redundancy and fault tolerance, keep in mind that you do not have to buy or maintain a phone system. The initial cost of the phone system is just the beginning of what you will pay. Make sure to factor in the maintenance contract that you won’t have now, upgrades and the MAC’s (moves, adds and changes) that will cost you a minimum of $50 just to move a persons office from one place to another or add a new employee.
As if the previous advantages weren’t enough, another advantage to a hosted VoIP system is the ability to operate multiple locations as one. Regardles of the city, state or country, you can have all of your existing phone numbers ring to one central office to easily be transferred the appropriate department or extention. This will allow for a reduced load on the support staff at smaller facilities, better coverage for your busy season, vacation or illness. It would even allow you to bring all of your attendants to the same facility where three people may be able to do the work of five. How you re-deploy your other two persons is up to you but here are a few questions to consider. Is your customer service department overworked? Has your personnel budget been cut? Have you lost employees that you haven’t been able to replace? You get the picture. If you calculate the cost of just one employee with taxes and benefits wouldn’t it be simple to justify an extra 20% or 30% on your voice and data services?
I want to re-iterate that you cannot eliminate 100% of the scenario’s that may cause you to lose your voice or data services. But if you can eliminate 90% of them, you are doing everything you can reasonably do to protect yourself. Most companies that I deal with wait until AFTER a disaster strikes before they do something to protect themselves.