What is VoIP & Five Reasons Why Your Company Needs VoIP

What is VoIP? The acronym stands for Voice over Internet protocol. Why is VoIP important? Since the 19th century, the nation’s local telcos (like AT&T and Verizon) have relied on the public switched telephone network (PSTN) to connect calls. Today, while telcos provide both plain old telephone service (POTS) and VoIP, they will soon quit offering POTS to subscribers. Like it or not, change is coming.

Just as the widespread use of the Internet boosted employee productivity, VoIP provides greater work flexibility and accessibility. During the pandemic, many employees began working from home with no slump in their productivity. Thank VoIP; Zoom calls and Skype meetings over VoIP can be held anywhere with a broadband connection.

With VoIP’s intrinsic flexibility, the office phone number can be forwarded to employees’ mobile devices, no matter where they are. Should inclement weather prevent employees commute from home, your business continues without disruption. VoIP has many helpful and innovative tools that better serve your customers and maximize your staff’s capabilities.

From Analog to Digital to Data Packets

While telcos have long used digital signal processing (DSP) for long-haul traffic, the POTS local loop—commonly called “the last mile“—is analog. For decades, circuit switching telephony served businesses well, providing a reliable and resilient network connecting calls near and far.

However, the analog PSTN cannot offer the performance and functionality of digital VoIP. A business’ POTS phone system is a stand-alone while VoIP integrates into your office’s broadband Internet connection. Below, you’ll see why VoIP is a crucial part of your company’s digital transformation.

VoIP works by converting audio signals into data packets for transmission over the Internet. VoIP is similar to Voice over Long Term Evolution (VoLTE) or mobile 4G; both convert audio to digital data flows. Both VoIP and VoLTE allow simultaneous talk and data transfer across the same connection.

Unless your company is located in the hinterlands where broadband providers are scarce, you don’t have to settle for PSTN communications. Indeed, according to Tech.co, VoIP business lines in the U.S. skyrocketed from 6.2 million to 41.6 million between 2010 and 2018.

In-House VoIP Versus Hosted VoIP

In-house VoIP means your company owns all VoIP infrastructure. This includes networking gear—handsets, routers, and the software needed to operate the phone system. With in-house VoIP, you’re responsible for bandwidth integrity, maintenance, and network security — and resolving service issues when outages occur.

A hosted or managed VoIP solution means that all infrastructure—handsets, software, Internet connection, etc.—is furnished by a VoIP provider responsible for network QoS. Heard of “the Cloud“? Hosted VoIP is telephony hosted in the Cloud and can be a part of a Unified Communications as a Service (UCaaS) strategy.

Why should you consider hosted VoIP over in-house VoIP? Hosted VoIP lets your company move business communications from a capital expense to an operating expense paradigm. Hosted VoIP is part of the ongoing trend to offload in-house IT to a managed services provider (MSP). When subscribing to an MSP, the client receives prearranged IT services contractually bound by a Service Level Agreement (SLA).

Reasons You Should Choose VoIP

Migrating from the PSTN to VoIP is a no-brainer. Below are five reasons why:

VoIP Costs Less

According to numerous studies conducted by research firms during the last decade, U.S. businesses save up to 75% on operational costs after migrating to VoIP. Smaller companies can cut the cost of local calls by up to 40% with VoIP. Moreover, by integrating voice and virtual conferencing into a VoIP application, businesses can reduce conferencing expenses by 30%.

Increased Functionality and Productivity

VoIP offers dozens of features not found with the PSTN and old-school PBX/KSU technologies. For example, VoIP allows your employees to use laptops, desktops, tablets, and mobile phones to place and receive business calls.

One of the most popular options available with VoIP is “Find Me/Follow Me.” Together, they allow users to receive incoming phone calls on different phones and different locations. This and dozens of other advanced call management features optimize productivity and UX for all stakeholders.

Business Text Messaging

Have customers who prefer texting instead of calling? Most VoIP solutions enable SMS texting capacities.

Easy Scalability

Scalability denotes the capability of managing workload increase (or decrease) by adding (or subtracting) resources. Since VoIP is highly scalable, features and users can easily be added (or deleted) at little or no cost. Seasonal businesses, marketing campaigns, and expanding companies (say, when two firms merge) can benefit from VoIP’s scalability.

Call Analytics

In today’s highly competitive business environments, data drives decisions. Since VoIP runs on all sorts of devices, you can collect data on customer interactions and employee performance. Examples of VoIP call analytics include source-level tracking, lead conversion rates, revenue per successful call, and more.