This morning Doug Mohney at FierceVoIP dropped some great observations from last weeks VoiceCon show. The one observation that struck a cord here at VoIP Supply was the six month ROI (Return on Investment) businesses want on the purchase of a VoIP system.
A year ago businesses were happy with an 18 month ROI. With new financial pressures (thanks to the economy) an 18 month ROI is no longer realistic for them.
But is a six month ROI realistic either?
Well, let’s take a look.
Sample small business
Acme corp wants to switch to VoIP. They are a very basic business, with basic needs. Here’s their stats:
- Number of seats – 20
- Number of phone lines – 20
- Data connection – T1
- Monthly cost per phone line – $75
- Monthly long distance cost – $500
- Total voice bill – $2,000 per month
Now these numbers are rough estimates for an average company of this size. It’s keep simple and straight forward for a reason.
Acme Corp wants to replace their existing phone system with a VoIP phone system and use VoIP lines for their local and long distance calling.
Sample bare bone VoIP system
Let’s assume that in this situation Acme Corp really is a basic company and just needs a basic solution. They’ve also have existing networking infrastructure to accommodate a VoIP system and their T1 has enough bandwidth to handle VoIP calls.
- SwitchVox SMB AA300 – $5,959.00
- 20 silver licenses
- 45 concurrent calls
- T1 card
- (20) Polycom IP501 VoIP phones – $3,299.00
- Configuration and installation – $1,000.00
- Total VoIP system cost – $10,258.00
Again, this is a bare bones on average system. Actual sell prices might vary.
Achieving a six month ROI
In order for this sample business to achieve a positive ROI in six months, they’d have to save a total of $10,258.00 ($2,051.60) in the first five months of having their VoIP system. Since the business only spends $2,000 per month on calling a six month ROI isn’t feasible.
This business will see an ROI within eight months, which isn’t bad. Then again this whole example makes a lot of assumptions.
Given the above example it is realistic that an average business, with average needs, can see a positive ROI on a VoIP system investment within eight months. Six months is a stretch.
For businesses and VoIP system vendors it is likely that delivering a positive ROI within six months is only possible through something other then pure cost savings. Be that via increased productivity, operational efficiency or something else that comes with the integration of a VoIP system.
Bottom line here is that a six month ROI is tough to achieve…making it time for folks on both sides to get a little more creative when it comes to ROI.