“By installing readily available equipment that converts the signal of traditional phone service to a digital signal, you can eliminate virtually all usage charges for local and long distance service,” says John Curry, owner of Curry IP Solutions.
Smart Business asked Curry for additional insight on cutting costs with digital phone service (IP).
How can digital phone service reduce costs for organizations with multiple locations?
We are all used to the telephone service model of obtaining local service when opening up each new branch of an organization. Phone systems would be installed to handle the expected traffic, and a long distance carrier would be selected to handle calls between headquarters, branches and customers. Basic service alone could average $300 per month or more and continue to rise with each additional minute of long distance conversation.
By converting to digital service, you can use the same Internet access that you rely on for inventory monitoring and ordering to provide the backbone for the new telecommunications technology that is sweeping across the country. Data and voice communications are moving simultaneously over the same channels.
What kind of savings are you talking about?
I know of one national chain with 1,000 locations across the country. The communications service between locations averaged at least $300 per month. With $300,000 per month savings, the company saved $3.6 million annually. Each company’s savings would depend on the number of locations and the average monthly costs. Savings for companies with international locations can be even greater.
Would a company that is about to see large growth benefit more than an established company?
I would say yes. With traditional phone service, one may need a small phone system at each location. Let’s say the system costs about $4,000 for each location with expected growth to 100 sites in the first year for a total cost of $400,000. A newer digital system would only require a one-time investment for the system and the phones at each location, with an overall investment of about $130,000 resulting in a savings of $270,000.
Can 911 services be a problem?
There have been concerns about this, but there are ways to work out the technical issues. With new developments and solutions arriving daily, E911 services soon will mirror the traditional services already in place. An improved E911 service is being developed to effectively use GPS (global positioning systems) to locate the calling party.
What about mobility?
Mobility is another great benefit of these systems. When a person goes out of town on business, he or she can take an IP-programmed telephone. He or she can plug it in to any high-speed Internet access and be seamlessly connected to the company’s phone system. So when clients call your office, they are actually reaching you at your hotel, or wherever you might be, without knowing it.
If a business in New Orleans had been equipped with this type of system when Katrina hit, it could have had calls immediately redirected to another location either permanently or temporarily.
How does this system work?
It uses the Internet’s invisible web that is accessible almost anywhere in the world. Each telephone is programmed with its very own alphanumeric code, a signature that identifies that phone with the system. So when a client calls, the system searches for that signature, authenticates it, and completes the call if the phone is plugged in. If the phone is not plugged in, or if you’re unable to answer or choose not to answer, the call can go to your cell phone and then to voicemail.
What about quality of service?
The quality of service is not much different than that of traditional phone service. In some cases, our customers indicate that quality is better than in the traditional services. Improvements in technology over the last couple of years continue to make this possible.