Month Date, Year
Company
Dear Sir:
I am pleased to present the report “VoIP”. The report has been prepared to understand the cost-effectiveness of VoIP for our company. The objective of this report is to understand how VoIP works and how it is beneficial for organizations. The report has been divided into six sections, which talk about the working of VoIP, the types of VoIP, the advantages of VoIP, the advantages of VoIP in respect to businesses, the disadvantages of VoIP and the conclusion respectively.
My recommendation to you after having prepared this report is to implement VoIP system in our company. It will be highly beneficial for our company considering the many advantages it offers. Cost-effectiveness is of course one of the main benefits that compels me to recommend the installation of VoIP. The other advantages that I would like to list here include its flexible nature and convenience of use.
Thank you for your consideration!
Sincerely,
Executive Summary
Voice over Internet Protocol is a revolutionary technology that uses the Internet to make calls. With the use of VoIP, our organization can save a lot of money because we will need to manage just one network instead of two. Phone locations and extensions can be easily added, moved or changed, which, in turn, is very beneficial financially and proved flexibility as well. VoIP will be particularly useful for those employees who need to communicate with others and access important data while travelling and at home as well. VoIP will also help the employees of our organization to interact with one another through instant messaging, video chat, voice chat and Web conference. VoIP is a mainstream technology adopted by approximately 75% of all companies purchasing new phone systems (Eogogics, n.pag.).
Therefore, I strongly suggest that we should get VoIP implemented in our organization; however, for now, we should only look at improving the productivity and efficiency of our company with the use of this technology. VoIP will prove to be cost saving for sure; however, it might take some time.
Introduction5
How It Works6
Types of VoIP Services 6
Advantages of VoIP7
VoIP for Businesses 8
Disadvantages of VoIP10
Conclusion10
VoIP
Introduction
It was not very long back when we had to think twice before making long distance calls, especially international calls, because of the huge amount of money involved in it. Long distance calls have always been a matter of concern because of their huge charges. Voice over Internet Protocol (VoIP) is a revolutionary technology that helps us making calls, local or long distance, at a very reasonable cost. Unlike the old telephony technology, it uses the Internet to make calls. If you have a dedicated Internet connection, you can almost make free calls with the use of VoIP.
VoIP is will not replace traditional telephony; however, it is definitely gaining popularity because of the many advantages it offers. It’s basically an effortless technology that is very simple and cost-effective to use. It gives us the flexibility of talking for unlimited minutes or hours, without the fear of cost. We live in a world where we can’t do without communication and cheap voice calls are definitely a blessing. With VoIP services they are no longer just another fictitious expectation (David, n.pag.).
VoIP requires a computer, a dedicated VoIP phone or a landline phone to place calls through a VoIP server or special adapter. Calls to landline numbers is also possible using interconnected VoIP services.
The objective of this paper is to understand how VoIP works and how it is beneficial for organizations. We have divided this paper into six sections. The first section talks about how VoIP works. The second section lists the types of VoIP systems. The third section talks about its advantages. In the fourth section, we will look at the advantages of VoIP in respect to businesses. The fifth section covers the disadvantages. The sixth and the last section sums up the report.
How It Works
VoIP phone service (Voice over IP; also known as digital phone service, digital telephony, or broadband phone) replaces your phone line with a high-speed Internet connection (Voipreview, n.pag.). This is the simplest way to understand how VoIP works.
Technically, VoIP systems work just like the PSTN (Public switched telephone network) systems. The only difference is that, in PSTN, data is transferred via a copper wire system and, in VoIP systems, calls are made through the Internet.
VoIP transfers analog voice calls in the form of packets of data. These packets travel over the Internet or any other network travel like other data types, such as e-mails. It takes just some milliseconds to transfer these packets. On reaching the final destination, these data packets are converted back to sound.
VoIP enables you to call cellular phones and landline as well. It also enables you to make PC-to-PC calls using your Desktop or Laptop, computer microphones and speakers or headsets.
With the use of an analog telephone adapter on your network, you can also make or receive calls using landline telephones. To make sure that you get the best quality of voice and your calls are secure as well, it is advisable to use a private IP network.
Types of VoIP Services
There are three types of VoIP services:
- Managed VoIP: Here, a third party manages the entire VoIP system at a fixed monthly cost. In this case, the organization does not have to make any other expenditure instead of the fixed monthly cost that it pays.
- Hosted VoIP: In this type of VoIP service, the phones, the network and often the PBX server are owned by the user. The service provider is primarily responsible for hosting the PBX server in a data centre and managing the system.
- On-site VoIP: This type of system is generally owned by large companies. Here, The VoIP is completely owned by the business itself. The business either manages it on its own or outsources it to a third party.
Advantages of VoIP
VoIP has several advantages over traditional telephony. Let’s look at some of them.
- First of all, as said earlier, VoIP is very cheap as compared to traditional telephony. You end up saving a lot of money on your telephone bills if you use VoIP instead of telephones. It costs almost half of what a telephone system would otherwise cost.
- It is a very simple to use technology and upgrading it is quite simple too.
- If you are using VoIP to make PC-to-PC calls, it’s absolutely free of cost. However, a nominal amount of money is charged when making PC-to-Phone calls. You also have an option for taking a monthly subscription for a particular geographical area to make PC-to-Phone calls, which is also very cost effective. To avail this service, you are given a virtual number at a very nominal cost.
VoIP for Businesses
Businesses when adopting the VoIP technology often look at improving their productivity and efficiency. They do not look at immediate and direct cost savings. Cost saving, though an integral part of VoIP implementation, may take some months or even years. The given graph shows what factors drive businesses to adopt VoIP.
Factors Driving VoIP Adoption Among Mid-Size Businesses in 2006 (Linda, n.pag.)
The use of VoIP users has significantly increased in the U.S. by small businesses since 2010. The given graph shows the rise in the number of VoIP users from 2010 to 2015 (Linda, n.pag.).
According to an article on Developing Telecoms from last month, VOIP service is becoming more prevalent in remote, rural areas (Rachel, n.pag.). People who had never witnessed telecom might also be privileged to use VoIP in some cases.
VoIP may not be a feasible option for small businesses because of its high cost of implementation. However, small businesses might consider VoIP, if:
- They plan to replace an existing PBX.
- They plan to open a new office.
- They operate at more than one branch or location.
- They want to local numbers at different locations.
- They frequently need to make long-distance calls.
- They feel that VoIP can be advantageous for their business in some other way.
Disadvantages of VoIP
Let’s now look at some of the disadvantages of VoIP.
- The first point that we need to consider is that VoIP is dependent on wall power. Traditional telephones work on Phantom power so they do work even when the power is gone; however, in order for VoIP to work, we need constant power supply.
- VoIP is also completely dependent on Internet connection. So, in order to have a good voice call using this technology, we need to make sure that we have a high speed uninterrupted Internet connection. Otherwise, the call quality will suffer.
- VoIP also needs a dedicated PC to make calls. If something else is running on the PC while making calls, the processor may get affected and the call may drop.
- Another drawback with VoIP is that it requires expertise in two areas, voice and data. It is difficult to find IT professionals with expertise in both these areas.
- Hacking and virus, though not very common, can affect VoIP.
Conclusion
VoIP is technology that helps us make long and even short distance calls at a very reasonable cost. It uses the Internet to make calls. It is a very low cost service that gives us the flexibility of talking for unlimited minutes or hours. VoIP requires a computer, a dedicated VoIP phone or a landline phone to place calls through a VoIP server or special adapter. It also enables us to make calls to landline numbers.
VoIP systems work by transferring analog voice calls in the form of packets of data. These packets get transferred over the Internet in just some milliseconds and are converted back to sound on reaching the final destination.
There are three types of VoIP services: Managed VoIP, Hosted VoIP and On-site VoIP. Organizations can decide which one to opt for depending on their requirements.
VoIP is beneficial for organizations in several ways. It helps organizations save a lot of money because with this system they just need to manage one network instead of two. VoIP is also very useful for employees whose job require a lot of travelling to abroad or within the nation itself. VoIP also helps employees of an organization to interact with one another through instant messaging, video chat, voice chat and Web conference. VoIP may not be a feasible option for small businesses because of its high cost of implementation. Exceptions are there though.
In spite of the many advantages of VoIP, it has some disadvantages as well. VoIP systems need constant power supply and they are completely dependent on the Internet. If either of these fails due to any reason, the VoIP system would completely shut down. Organizations adopting VoIP need IT professionals with expertise in both areas, voice and data. Such professionals are hard to find in market currently. However, because of the increasing trend of VoIP, it is likely that more and more people step into this field.
Works Cited
Yuri, David. “VoIP: communication in cost-effective terms”. boybdream.com, 2008. Web. 27 Apr. 2013.
Voipreview. “How Does VoIP Work?”. voipreview.com, 2012. Web. 27 Apr. 2013.
Cisco. "How Voice over IP (VoIP) Works". cisco.com, n,d. Web. 27 Apr. 2013.
Jacobson, Linda. “Is VoIP a Viable Option for Small Business?”. nashnetworks.ca, 2009. Web. 27 Apr. 2013.
Greenberg, Rachel. “VOIP in the country”. itweb.co.za, 2013. Web. 27 Apr. 2013.
Eogogics. "Voice over IP (VoIP) ". eogogics.com, n,d. Web. 27 Apr. 2013.
