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.
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:
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!
Scott Yelton is head of product management for OfficeSuite UC® at Windstream Enterprise, where he is responsible for management of growth and lifecycle for the company’s leading UCaaS solution. He has over 21 years of experience in the telecommunications industry. Prior to Windstream, Scott was the Director of Product Development and Strategy for both Earthlink and Deltacom, where he had also led sales Engineering. He began his career in telecom in sales and sales management roles for Sprint and BTI Communications. Scott is a graduate of Appalachian State University with a degree in marketing and management.
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