What is a VoIP Phone System? Voice over internet protocol (VoIP) is software that provides businesses with a phone system over the internet, which can reduce hardware costs and scale call volume. Advanced features include intelligent call routing, video conferencing and voicemail transcription.
The global market for VoIP solutions will grow to $145 billion by 2024.
Source: ClarityTel
New businesses that switch to hosted VoIP can cut initial startup costs by up to 90%.
Source: CarolinaDigitalPhone
Businesses that make calls over VoIP using a computer save an average of $1,727 per month.
Source: HarborNetworks
Common Features of VoIP Phone Systems
Here are the common features found in a VoIP phone system:
Automatic call distribution
Billing administration helps users create price quotes, send invoices and manage customer balances. Some systems also let customers make mobile payments.
Computer telephony integration
Computer telephony integration allows users to control phone functions, view call info and route calls through a computer. The feature can also integrate with customer relationship management (CRM) and enterprise resource planning (ERP) software.
Voicemail transcription
Voicemails are automatically transcribed and emailed, along with the recording, to the appropriate user.
Mobile access
Businesses can access VoIP software from mobile devices or dedicated apps. Mobile access helps connect users in remote locations and different geographical regions.
Text messaging
Companies can send customers automated text messages for appointment reminders, checkout confirmation and delivery notifications.
Call management
Call management includes call forwarding, waiting, transferring and recording. Administrators have the ability to monitor, interrupt and assist users during calls.
Dashboard
Companies can track and analyze VoIP usage, call statistics and other vital metrics through an intuitive, visual dashboard.
Interactive voice response
Interactive voice response (IVR) lets customers use their keypad or voice to navigate through a phone menu system. IVR collects info for accurate automatic call distribution.
Softphone
A softphone, or software phone, is an application that lets users access telephone capabilities through a headset attached to a computer, tablet or mobile device.
Video and conference calling
Users can join and lead video and conference calls from their computers or mobile devices.
Top Benefits of VoIP Phone Systems
Using a VoIP phone system has many benefits, including:
Greater efficiency and productivity
VoIP software gives companies audio and visual communication tools, such as video calling and chat applications, that improve team collaboration. Companies can reduce the number of missed deadlines and errors while increasing employee efficiency and productivity.
Lower costs
Companies can lower their hardware costs with a VoIP solution. Instead of traditional phones, businesses buy VoIP-compatible phones (hardphones) or softphones. In addition, many VoIP plans are more affordable than traditional phone services.
More remote workers
The best talent isn’t always located near a company’s offices. VoIP software allows companies to hire more remote workers and gives them tools for real-time communication.
Third-party integrations
VoIP solutions can integrate and share data with other business software, including CRM, ERP and ecommerce platforms. Companies can generate new leads from live chats or respond to customer support requests by email and text.
Increased data collection and analysis
With VoIP software, businesses have the ability to record and analyze calls for a variety of metrics, including wait times, average talk time and calls abandoned in queue. This info helps companies develop strategies to improve customer experience and retention.
Scalable platform
Landline telephones require additional hardwiring to increase the volume of calls they can handle. In contrast, VoIP phone systems can scale quickly as long as the company has enough bandwidth and internet speed.
Enhanced security
VoIP software encrypts communication to protect confidential info during transmission. In addition, vendors offer advanced security features, such as virtual private networks, multiprotocol label switching and deep packet inspections.
Typical Buyers of VoIP Phone Systems
Companies of all sizes and in many industries, such as plumbing, utilities and manufacturing, may consider purchasing a VoIP phone system. Buyers often include:
Large and enterprise-level companies
Large and enterprise-level companies typically have many employees in different locations. With a VoIP solution, workers are able to communicate remotely. Branch offices can also use the software to maintain a single voice network in the company.
Most large enterprises have extensive customer support and contact center needs. These companies should take advantage of VoIP analytics and scalability, especially if call volumes spike around busy periods or the holidays.
Small and medium-sized businesses (SMBs)
With limited resources, SMBs can minimize hardware investment by using VoIP softphones and mobile apps. In addition, less expensive solutions usually offer the basic functionality needed, such as call management, video conferencing and a cloud-based PBX (private branch exchange telephone network).
SMBs may be tempted to use a free VoIP phone system, but it usually doesn’t have the features, bandwidth or reliability required for business purposes.
Call centers
Call centers have very high call volumes. They rely on software that can scale easily and maintain high quality audio during peak call times.
These businesses benefit from the comprehensive VoIP platforms that intelligently route callers, automate performance analytics and allow customer self-service with interactive voice response.
VoIP Phone System Pricing
Although VoIP is generally cheaper than traditional landlines, the software still has several pricing components, such as:
- Hosting Businesses that host their VoIP solution with the vendor typically pay between $25 and $40 per user, per month. For businesses that want more control and host the software on-premise, setup costs range from $500 to $1,000 per user.
- Users Many vendors charge a lower per user, per month rate if a business has more users.
- Features Pricing also varies by the level of functionality. Plans that include voice transcription and integration with CRM and ERP platforms typically require a premium. The highest-feature plans may cost up to $50 per user, per month
- Phone costs VoIP solutions need less hardware than traditional landlines, but still use audio devices. VoIP hardphones usually start at around $80 and headsets at $40.
How to Choose a VoIP Phone System
VoIP phone systems have different features and pricing, so it’s important to take the time to research your options. We recommend the following steps when choosing a network monitoring tool:
Identify your company’s needs
The first step in identifying your needs is to understand the calling needs of your company. How many phones do you need? Do you manage your own customer support? Are there times when call volumes spike?
The next step is to get input from your employees. Do you have a sales or customer support team that needs high-quality audio or the ability to route calls? Do you have a large IT department that’s knowledgeable in VoIP technology?
You should also consider what features you’d like to implement. Do you need the ability to host hundreds of people in a video conference? Will thousands of customers call you during a new product launch or around the holidays?
It’s a good idea to figure out which key performance indicators will be affected by the VoIP phone system. Will it improve employee productivity and efficiency? Will it reduce call handling times? Can it lower telecommunications expenses for the entire business?
Create a Shortlist
Research vendors that best fit your needs. In addition to current requirements, consider the implementation process and the scalability of the VoIP solution.
The implementation process can vary significantly. You’ll want to speak with vendors and ask about timelines and fees. Be sure to ask if training is available.
Think about how many employees and customers you have now. If you plan to grow the company, make sure the VoIP software is scalable. It should be able to handle peak call volumes and offer the functionality that your team needs.
Once you’ve researched these issues, you can put together a shortlist of vendors whose software matches your needs.
Contact vendors
Begin contacting vendors on your shortlist. You should request a demo of the solution to see how it works. Make sure to test the software with the employees and IT administrators who’ll use it most often.
As discussed in the Pricing section above, VoIP phone systems vary in cost. You’ll need to factor in the number of users and callers required. It’s important to fully understand the vendor’s pricing structure.
Some vendors also charge extra for implementation, support and training. Keep this in mind when asking for a quote. You’ll want to compare all-in prices among different vendors.
Be sure to clearly define the level of functionality you want.
Get customer references
Once you’ve completed a demo of the network monitoring solution and have a better understanding of pricing and services, it’s time to get references from a vendor’s current or previous clients.
If the vendor has been in business for less than five years, it’s particularly important to get references.
The vendor will give you the names of clients with positive experiences, but make sure to ask for companies that have similar needs to yours (e.g., businesses with a large contact center or that need advanced security tools).
When contacting the reference, ask if there have been any issues with the vendor or the solution.
Challenges of VoIP Phone Systems
All software has its advantages and challenges. Companies that use VoIP phone systems should consider the following challenges:
Monitoring bandwidth
Although a business may have high-speed internet, it might be throttled or not optimized to give VoIP solutions the most bandwidth. Companies should use network monitoring tools to ensure they’re getting accurate speeds and internet usage is prioritized correctly between applications. In the event of an internet slowdown or a crash, businesses also need to have a backup plan.
Finding knowledgeable IT professionals
VoIP software combines several different IT disciplines, including voice technology, data management and network administration. Finding professionals that have the skills and knowledge to maintain and service VoIP solutions can be a difficult task. Businesses should make sure their vendor has a support team to help solve any issues that arise.
Securing the VoIP solution
Because VoIP solutions run over the internet, they’re vulnerable to cyberthreats in a way that traditional phone systems aren’t. VoIP software can be infected by malware or phishing scams, and malicious actors can hijack calls or perpetrate call fraud. Companies that want to secure their phone system should look for vendors that offer virtual private networks, multiprotocol label switching, deep packet inspections, authentication, and regular patches and updates.
Maintaining data privacy laws
Many industries, such as health care and finance, have very specific regulations about data privacy. Companies that record calls using VoIP will have to comply with all applicable laws regarding encryption and storage. If your business faces data regulation, be sure to consult with the vendor on their privacy features before purchasing a solution.
VoIP and Business Phone System Market Trends
The market for VoIP software and business phone systems is rapidly evolving each year. Here are several key trends:
Softphones continue to replace hardphones
Although hardphones are still common in many large enterprises, many new businesses and startups are investing in softphones to minimize hardware costs. These companies have more remote workers who need access to communication tools on laptops and mobile devices. As VoIP solutions develop better mobile apps and Bluetooth headsets become cheaper, softphones may begin to overtake hardphones.
Hosted, cloud-based VoIP outperforms traditional landline systems
As internet network speeds and bandwidth have improved over the years, hosted, cloud-based VoIP phone systems have become more reliable and high quality. In addition, cloud phone systems are configured virtually and not through hardware, so they can be customized and scaled more easily than traditional landlines.
Automated analytics can improve the customer experience
Many VoIP providers are investing in new technology that’ll allow their software to generate real-time conversational analytics. For example, natural language processing can alert managers when a customer has an angry tone or when an employee sounds fatigued. The program can trigger coaching features to help the employee shift the conversation or the manager can join the conversation and assist.
