What is VoIP And Why Does My Business Need it

Is your business still reliant on a traditional analog phone system? Did you know that it could be costing you thousands of dollars in overpriced tariffs and inefficiencies whilst also stifling employee productivity and creating a poor customer experience? 

Thankfully, there is a solution. VoIP is a modern yet established technology that allows you to place calls over the internet, offering several benefits over traditional phone systems including lower overall costs and rich features.

Otherwise known as virtual phone systems, VoIP phones are a type of cloud-based business phone service that is becoming increasingly popular with businesses around the world.

Read on to understand how VoIP phone technologies work, the benefits they offer over traditional phone systems, and how leveraging cloud communications can benefit your business.

What is VoIP?

Voice over Internet Protocol (VoIP) describes the technology of placing and receiving calls over the internet. Whilst traditional phone lines are reliant on analog lines and costly hardware, VoIP technology relies on nothing but an internet connection. 

With your phone connected to your Local Area Network (LAN), VoIP technology bypasses the telephone company entirely by converting your analog voice signals, converting them into data signals, and then sending them as data over your broadband line, these are then converted back on the other end.

Modern VoIP is built on open standards including Session Initiation Protocol (SIP), this technology provides seamless compatibility between different phones and VoIP apps.

As VoIP technology uses the internet to deliver phone system functionality, many new features such as call recording, and services like unified communications that were previously out of budget are now available to SMEs.

Why Do I Need It? 

As we move to an increasingly digital world, businesses must evolve or face falling behind the competition. This last year alone has shown that businesses must be agile and learn to adapt to be successful in the long term. 

As well as reducing overall telephony costs, VoIP offers countless benefits to your customers, staff, and suppliers whilst setting your business up for the future; with features including call management, IVR, call forwarding, business SMS, call recording, email notifications, and more.

Due to its scalability, ease of setup, and complete flexibility, VoIP can grow with your business and gives you freedom from the restrictions of a traditional phone system. 

Furthermore, with many businesses and employees now realizing that they can work from home efficiently, VoIP is the ideal technology to enable remote and hybrid methods of working.

VoIP also enables you to leverage multi-channel communications, with staff able to add video calling and texting to their online phone; all of which is automatically synced across channels and devices to provide an excellent customer experience. 

VoIP – Benefits To Businesses 

Cloud-based phone services offer many benefits to businesses including:

  • Significantly lower hardware and call costs. 
  • Better suited to remote and hybrid methods of working.
  • Ability to add multiple communication channels. 
  • Plug and play – all you need is an internet connection.
  • Employees can make and take calls from anywhere. 
  • Ideal for remote and hybrid working.
  • No need for fixed and expensive infrastructure.
  • Adding new users is quick, easy and low cost – making VoIP hugely scalable. 
  • Most calls will be of a higher quality when using a VoIP phone.
  • Feature-rich handsets customized dependent on your needs.

It is highly recommended that you talk to a telecoms expert when considering VoIP for your business to ensure that you select the right package and features to meet your needs.

VoIP vs. Traditional Phone Line 

In comparison to a traditional phone system, VoIP offers benefits in terms of price, features, scalability, and installation & setup.

VoIP Phone Traditional Phone
Price Low set up cost, low call cost, and low ongoing maintenance costs. Higher setup and monthly costs for lines and calls. Several additional costs may also be incurred such as installation, PBX, updates, maintenance, and support.
Features Features such as auto attendant, extensions, find me follow me, call forwarding, business SMS, and phone recording are often included. Advanced features require additional infrastructure such as PBX. Certain features offered by VoIP are not possible.
Scalability Adding new users to VoIP phone systems is simple and low cost, making it ideal for growing businesses. As each new employee will require a new headset, scalability can be expensive with a traditional phone system.
Installation & Set UpPlug and play, a VoIP phone system can be installed and running in just a few hours.More complex and lengthier setup which generally requires support from an engineer. 
Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.