{"id":9946,"date":"2017-06-28T11:39:17","date_gmt":"2017-06-28T18:39:17","guid":{"rendered":"https:\/\/www.aerocominc.com\/info\/?p=9946"},"modified":"2017-07-17T13:01:16","modified_gmt":"2017-07-17T20:01:16","slug":"buy-the-phone-system-or-go-hosted-here-is-what-i-do","status":"publish","type":"post","link":"https:\/\/www.aerocominc.com\/info\/buy-the-phone-system-or-go-hosted-here-is-what-i-do\/","title":{"rendered":"Buy the Phone System or go Hosted? Here is what I do."},"content":{"rendered":"

Your company is in the market for a new phone system, and you aren’t sure whether your company should buy the system or go with a Hosted VoIP<\/a><\/span> solution.<\/p>\n

\"Hosted<\/a>As a both a telecom broker and business owner for many years, (who’s purchased many\u00a0phone systems), I know both sides of this equation. I’ve made my share of mistakes and I have an opinion.<\/p>\n

The answer is Hosted. Here is why.<\/p>\n

Soft-Dollar Opportunity Costs is\u00a0Where We\u00a0Win or Lose<\/strong><\/h4>\n

It costs our\u00a0company big money when we\u00a0do not have the best technology, allowing our company to\u00a0compete at the highest level of our industry. It’s a hidden, soft-dollar cost but it’s huge.<\/p>\n

Just look at\u00a0companies like Blackberry<\/a>, Blockbuster<\/a> or AOL<\/a>. None of those companies lost because of a lack of control of “hard-dollar costs.” They lost because they didn’t have a culture of trying to compete at the highest level; A soft-dollar cost.<\/p>\n

So how does that apply to our new phone system and how do I\u00a0quantify the soft-dollar costs of our phone system?<\/p>\n

10 Years is Too Long<\/strong><\/h4>\n

If you are a business executive constantly using your mobile phone for business, would it be helping or hurting you today if you had a 10-year-old cell phone? Think of the capabilities your cell phone would lack? Apps, a big clear screen, a fast\u00a0Internet connection and more. No-brainer, right?<\/p>\n

Why are our\u00a0company’s users’ desk phones any different? Employees\u00a0use them all day, every day and they have tons of features capable of making our people\u00a0more efficient at work (i.e. voicemail to email, software integration, voice to text transcription, presence, find-me-follow-me, so on and so on). Will phone systems have even new features in 10 years?<\/p>\n

Of course they will. Telecommunications\u00a0technology is evolving at light speed. I’d say every 3-5 years, phone technology adds another couple “must-have” features (if I\u00a0plan on having employees working and communicating at the highest level).<\/p>\n

Keeping our phone system for 10 years is going to have a soft-dollar cost (of not competing at the highest level), for those 5-7 years the system is out-of-date. But the question remains: How do I quantify the cost?<\/p>\n

The way I do it is by looking at the impact it will have on two of our company’s biggest line items on the P&L: Payroll and Gross Sales.<\/p>\n

Payroll<\/strong><\/h4>\n

\"employees<\/a>Payroll is typically the biggest monthly cost of our\u00a0business. If we\u00a0can increase the output of our employees, for the same total payroll cost, it’s a HUGE win. We\u00a0are getting more for our\u00a0money.<\/p>\n

Let’s say our\u00a0company has 100 employees with an average payroll cost of $50,000\/year\/person (including salary, benefits, payroll taxes, etc.). This means our company’s total payroll is $5,000,000 per year.<\/p>\n

I am certain that having better communications technology (used every minute of every day), can increase our employees’ productivity\u00a0by at least 1%.<\/p>\n

Assuming new phone technology will be available in 3\u00a0years, our soft-dollar cost of keeping our phone system for 10 years is $350,000 <\/strong><\/span>(7 x (.o1 x $5M).<\/p>\n

But this is just the tip of the iceberg! What about the big number… sales?<\/p>\n

Gross Sales<\/strong><\/h4>\n

Will our salespeople work more efficiently if they can communicate better with our employees and\u00a0clients? If they work more efficiently, can they sell an extra customer or two every year?<\/p>\n

Will our customers be more impressed with our company if they can communicate with our employees more efficiently? When they call our company, is it an enjoyable experience? If our customers\u00a0are more impressed with our company, won’t it help retain at least one\u00a0or two\u00a0customers every year?<\/p>\n

It’s easy to assume that the combination of these two\u00a0factors\u00a0will (at least), increase our yearly gross sales by 1%.<\/p>\n

Keeping with the same example of 100 employees, let’s assume that our company’s yearly Gross sales is $25,000,000. When new phone technology is available in 3 years (but we\u00a0keep our system for 10), our company’s soft-dollar cost is $1,750,000<\/strong><\/span>!<\/p>\n

Summing it Up<\/strong><\/h4>\n

No matter which Hosted VoIP service provider<\/a><\/span>\u00a0we choose, the longest our company will ever be strapped to the system is 3 years. For this reason alone, I choose to keep my company on a hosted phone system. I want to do everything possible to help our employees work and compete at the highest level within our industry. The short-term, hard-dollar costs pale in comparison to the long-term, soft-dollar benefits.<\/p>\n

Feel free to tweak my math however you like, based on your own opinions of the impact of your phone system… but keep my cell phone example in-mind. Your telecom technology WILL NOT\u00a0be best-in-breed, within three\u00a0years. And yes, business phone systems have evolved just as much as cell phones but many haven’t noticed it because\u00a0their company was clinging on to “old-yeller.”<\/p>\n

Are there other opinions out there? Sure. And at the end of the day, every company is different and your decision is up to your best judgment… not mine. No judgment. We are more than happy to help companies get better quotes<\/a><\/span>, even if they are not going hosted. We have hundreds of clients not on hosted, which is just fine. But if you ask for my opinion, at least you know what I think and why.<\/p>\n

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About the Author\"mikesmith\"<\/strong>
\nMike Smith is the Founder and President of AeroCom and has been helping companies with telecom and cloud services since 1999. He\u00a0has been the recipient of numerous business telecommunications industry awards and in 2011, he was honored as one of the top 40<\/a><\/span> business people in Orange County, CA., under 40 years old. Follow Mike\u00a0on LinkedIn<\/a>,\u00a0Twitter<\/a><\/span> or SpiceWorks<\/a><\/span>.<\/p>\n

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Get a better quote, featuring the best 3 providers for your company. Click below.<\/span><\/h5>\n