Movin' On Up


Right now, you and your employees transmit vast quantities of voice and data messages every day, but probably not over the same network. There's the Internet for data and the Public Switched Telephone Network (PSTN) for voice.

But can you keep meeting your earnings targets with one ankle tied to a phone system that hasn't changed much in a century? The business cycle keeps accelerating--and pretty soon, you'll want to mix voice and data in high-bandwidth applications like CRM, videoconferencing and streaming media presentations. Jumbo data types don't travel well over PSTN copper.

Plan B: Go IP. Internet-based or IP telephony offers capital and operational cost savings and productivity enhancements. An IP-based telephone system like Cisco's ICS 7750, the equivalent of a traditional PBX and a LAN, can easily mix high-bandwidth voice and data packets. Just one Category 5 networking cable carries both to every worker's desktop about twice as efficiently as the standard PBX network, so less hardware, less wire and fewer upgrades are needed.

An IP phone system costs less to buy and install than separate systems, but the real savings come in operating costs. Potentially expensive phone moves, changes and additions can be accomplished by staff without a visit from a PBX vendor. IT staffers need know only one system with one set of manuals and administration tools, and both IT and end-user training are simplified.

Workers have an LCD display with graphical phone options and a universal mailbox that, market research and consulting firm Sage Research says, can save the average person almost four hours of phone tag per week. The phone can display XML-based Web content and, when connected to an IP-based long-distance service, avoid the tollbooths that the Bell companies have placed along the PSTN. Remote, even overseas, offices are a local call. Put a mobile IP phone in the hands of your important telecommuters, and they can receive and make calls through the ICS 7750, too.

Cisco is one vendor focused on return, and its distributors can run an ROI calculator telling you specifically what IP telephony could do for you.

Many Happy Returns?
Estimating your potential return on technology is a useful exercise that can help you refocus away from product specs and onto the real reason you're buying the stuff in the first place--to help your company make money.

But predicting ROI is hard to do. A lot depends on how and how well you use the equipment and what the billing rates of those users are. Here are some of the factors Dell system consultants use for network deployments. This sample ROI calculator starts with total cost of ownership (TCO) and gets more speculative from there.

Since no one can foretell the future, product vendors can't definitively predict product ROI anymore than you know how many widgets you'll sell this quarter. But a vendor should, at least, be able to point you to research or anecdotal evidence upon which to base your ROI assumptions. If your salesperson can't, maybe your company is too sophisticated to be doing business with that company.


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This article was originally published in the September 2003 print edition of Entrepreneur with the headline: Movin' On Up.

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