Planning for Unified Communications in the Next Fiscal Year

by Scott Yelton
October 08, 2018

Budgeting season is upon us and if you’re planning to replace your business phone system with UCaaS (unified communications as a service) in 2019, the time to start planning is now. Still undecided? Understanding the impact that UCaaS can have on your spending, productivity and revenue are key to making an informed decision.

Unified communications video conference in progress

Calculating costs

The first place to start when evaluating the best scenario for a future investment is to determine what your costs are currently. There are basic economics to apply when calculating the costs for your current system. These expenses will include any remaining lease payments or payoff values you have on your current hardware or phones, plus maintenance costs. Maintenance costs— should encompass any ad-hoc service calls made over the last 12 months and any replacement costs such as hardware, phones and inside wiring you’ve accumulated. To this amount, you’ll need to add the cost of your telecommunications services for your local, long distance, toll-free service, etc.  If you do have a contact center in place, it’s best to separate the costs associated with that platform but to include it in the overall picture.  Once you have a complete picture of your last 12-24 months of expenses, you can determine your annual and monthly spend for your current system and do a healthy cost comparison to a new one.

CAPEX vs. OPEX

Now for the good news. You no longer need to budget to purchase and maintain the “big iron” hardware phone system that you’ve had in the past.  UCaaS is cloud-based—meaning you only need IP Phones and some peripheral hardware to support specialized functions.  The only other consideration is whether you need/want to upgrade your network to support POE (Power over Ethernet) for POE-powered phones.

As far as budgeting for the services themselves, most UCaaS providers offer multiple payment plan options for hardware and deployment so you aren’t paying huge up-front capital fees in the first year of the agreement.  Phones, service and hardware can be rented or leased from a UCaaS provider with maintenance included, creating an operating expense (OPEX) vs. a capital expenditure (CAPEX).  Many also offer the ability to purchase the phones if your primary objective is to reduce OPEX.  You will want to make sure you ask about the replacement costs of devices over the course of the contract, and your ability to add and remove services based on growth or staff reductions.

Factoring in revenue gains

Lastly, don’t forget to factor in soft-costs and productivity gains that can lead to more revenue for your company.  Unified communications and contact center services have many benefits that older systems don’t typically provide.

Here are a few that should be factored into to your planning and budgeting:

  • Mobility – When employees can access their work communications systems from any device, there is a greater ability to service customers and communicate with other employees during times they would otherwise be out of touch.
  • Teleworkers – When employees can take their work phone and voicemail home and gain access through a secure connection, softphones and other UC-enabled applications like video and web conferencing, allow work to continue even when the office is inaccessible.
  • Phones – Replacing all your phones may not be necessary. Some providers allow you to bring your own devices or offer a mix of IP and analog devices on their system. There is also the option of just giving some employees softphones.
  • Customer relationship management (CRM) – UCaaS offers advanced capabilities such as call routing, auto attendants and CRM integrations which can improve employee productivity, workflows and the customer experience.

As you can see, crunching the hard numbers alone won’t get you to the bottom line budget.  I recommend factoring in a conservative revenue gain component or the estimated reduction in hours employees lose with the current system that would be realized with a new unified communications system in place. Happy budgeting!