What is a VoIP phone system?

We will explain what a VoIP phone system is without using buzzwords or geek speak. When people start looking into alternatives to traditional, premise based phone systems for their business, invariably the most basic question comes up.

What's this VoIP stuff all about? What is a VoIP phone system?

Unfortunately, when people start researching the topic of VoIP phones for their business, they often get turned off because of the sheer volume of unintelligible information out there. Between the "geek speak" and buzzword mumbo jumbo, it's hard to get a straightforward answer explaining just what "VoIP" actually is or entails.

We've found that the simplest way to educating our client is to break it down in a simple to understand, easy to digest manner, without going heavy into the IT details or the history of telecommunications.

What is a VoIP phone system?

When we meet with clients in person, discuss details over the phone, or answer emails, we usually break that answer down like this.

• A VoIP phone is a phone that uses the internet to send 'voice packets' instead of old-school Verizon lines like you'd see hanging from a telephone pole. These traditional lines are usually called copper or T1 lines, but that doesn't really matter. What you need to know is that you need high-speed internet at your business, which you probably already have, to make phone calls.

• Instead of having a physical phone system on-site installed in your IT or telephone closet, the brains of your phone system is now centered in a secure, off-site data center. You literally don't have to worry about the nuts and bolts of your system anymore. Even if you use a premise based VoIP system, there's still off-site security features that ensure your "phone lines" aren't tied to your office equipment.

• Because this is an internet based service, and doesn't rely on "multiple phone lines" there's usually a pretty good chance you can significantly cut costs on your phone service. Think about it like this: You only need one internet line to connect multiple computers, right? Your VoIP phones are the same way. You only need one internet connection to handle multiple VoIP phones at your office, meaning you don't need to have multiple phone lines with traditional carriers like Verizon, Cablevision or any T1 provider.

• Also, because this is a VoIP service you can have additional carrier features added onto your service at your business for no extra cost. While traditional carriers would nickel and dime you or things like caller ID name and number, local & long distance usage, & random surcharges, most VoIP phone systems will include these services for a reduced fixed fee.

• With a VoIP phone system, customers tell me their favorite features are the voicemails left get emailed to their smart phone as a .wav file and customers calls can get routed to their personal smart phones. The ability for smart phones to function with a VoIP system is a game changer.

• You still can use desktop phones like you and your staffs are accustomed to. The buttons may be different, the phones may look a little different, but we assure you, once you start using them, you won't notice a difference at all. Your new IP phones are going to be called IP phones, but you don't really need to worry about it, since they more or less look and act very similar as your old desktop phones. Here at Tele-Data Solutions we offer our clients various types of phones which you can check out for yourself on our Vertical IP Phones page and ShoreTel IP Phone page.

• Traditionally, when your phone system needed changes or support, it would be a slow and long process to wait for a technician to come on-site for something as simple as switching extensions, adding a voicemail box, add a phone extension to the service department. With a VoIP system, there is a portal which makes supporting your phone system easy because changes can be made remotely from a web portal.  Some customers learn how to use a web portal themselves and don’t even have to wait for support.

• Despite you living under a rock (we're kidding!) this technology has been around since 2002, but really came into its own back in 2008 when it became widely accepted and used. Just like smart phones, VoIP gets more and more advanced every year, with no end in sight.

While that's a lot of information to digest, let me break it down into the fewest possible words for you:

A VoIP Phone system means the phones kow work over a computer IP (internet protocol) network; and the phone system can be now located in a hosted offsite data center or in your building while making and receiving calls using your LAN and WAN bandwidth.

That's honestly what it really comes down to.

Why doesn't everyone use a VoIP phone system at their business?

The main reason folks still rely on traditional premise base phone systems connected to traditional phone lines in their business is simple: if it ain't broke, don't fix it mentality.

We get it. Your existing phone system was paid off years ago and it does work.  You may have a local service company who you're comfortable with and upgrading your phone system at your business is not a priority. We hear it all the time.

So how does a traditional premised based phone system differ from a VoIP system?

• We keep calling it premise based and if you're not sure what we mean, consider this: your existing phone system is most likely in your building, usually in an IT or telephone closet or some other area were your tech guys can get at it. Simply put, a premise based telephone system is within the premise of your building.
• Some known brands are Avaya, Nortel, Cisco, Mitel, Toshiba, NEC, Panasonic, Samsung, ESI, Shoretel, among many others.
  • These systems are proprietary; require certifications and expertise to maintain. What we're really saying here is simple: you are at the mercy of who can service and fix that particular system and they can be expensive to maintain.
• The premised system is connected to carrier lines i.e. Verizon phone lines, Cablevision or Comcast phone lines or a T1 circuit.

Premised based phone systems come in three flavors; all 3 types are similar in that they are located locally at the customer location (not off-site).

1. Digital Phone System – This is a premised phone system connected to digital phones.
   • This technology was introduced since the early 1980's to replace analog phones. This was a huge improvement for businesses back then to use features we take for granted now such as 3 digit intercom to another extension and using a voicemail system.
2. Hybrid Phone System – This is a premised phone system connected to digital and/or IP Phones .
   • This technology was introduced in early 2000 for a business to add “remote IP Phones” unto an existing system so a 2^nd office location could be integrated into the main system or a remote employee.
3. IP Phone Systems – This is a premised phone system connected to IP phones; these systems can connect to local phone lines or VoIP Lines. This type of system is newer and usually offers a lot of features and benefits very similar to a VoIP Phone System.  There are options in the market for feature rich IP based Phone Systems i.e. Shoretel, Mitel, Cisco, Vertical, Avaya among others.
   • Customers often confuse a premised IP phone system with a VoIP services, but that's not correct. They are two different types of technologies, with two different pricing models, but they do provide similar capabilities to a customer.

In my experience, customers with premised based digital and hybrid phone systems have the most room for improvement and have the most communication and system related problems. This is primarily because most businesses acquired a digital phone system or hybrid phone system 5-20 years ago and have been using it ever since.

It's funny to us because when we go visit clients in person or discuss VoIP service with someone, they'll say their decade old technology works fine and they don't need anything new. But chances are they'll be saying this as their brand new iPhone is sitting on their desk next to their iPad and brand new ultra-thin laptop. Kind of ironic, isn't it?

When we point that out, they'll usually think jeez I get that analogy, but is this VoIP service really worth my time and energy to learn about?  Is it worth risking making a wrong decision when what I have works? Simply put, it depends.

Here are the primary benefits of VoIP Phone technology for the typical business:

• VoIP service can reduce your current monthly costs.
  • There are some fees that a VoIP eliminates. The most obvious is your charges for local and long distance with whatever carrier you have.  Another common fee that is eliminated is the cost to maintain your current phone system; most customers pay a service provider “X” amount of dollars per year to maintain and warranty their system.
• VoIP is built with the future in mind.
  • We're all living in a digital, highly mobile age, and VoIP systems take that into consideration and allow for a level of mobility and connectivity that traditional systems can't compare to. Over 50% of all electronic devices shipped out these days are mobile devices, so it's only natural for your desktop technologies to communicate with mobile technologies. For example, if you're out of the office or working remotely, incoming calls can seamlessly be transferred to your smart phone or home phone, ensuring you customers can always get a hold of you. Additionally, most systems will email you your voicemail. Meaning, you'll get an email with an attachment of a .wav file which you can play on virtually any device so you can quickly listen to your messages without having to dial into anything.
• VoIP phone systems are designed to function for remote workers.
  • IP phones allow for enhanced flexibility and mobility traditional phones can't duplicate. If you were working from home, for example, you could take your phone with you, plug it into your modem or router at home, and it most likely will behave as if you're still in the office.
• VoIP systems are easier to support which means quicker service to you
  • Since you have full access to the "backend" of your system via an easy to use web interface, your phone system will be easier and faster to fix, should a problem ever arise. Additionally, service and support, depending on the VoIP provider you go with, is usually a lot faster than dealing with a big organization like Verizon or waiting for a technician to come on-site to support your phone system.
• VoIP systems are intelligent and can provide management with tools to run their business. Here's a few examples of tools typically at your disposal:
  • Incoming and outgoing calling metric per staff or department.
    • This is a useful tool for customers that get heavy incoming amount of calls from customers. The software provides managers with information that can help make decisions on when to staff up and add more resources.
  • Automatic Call Recording.
    • This helps get to the bottom of the classic “he said/she said”. Often times in business there are misunderstandings and missed expectations.  This is a powerful tool that stores the recorded calls if you ever need to retrieve the call it in future.
  • Tying in the phones with CRM software like Salesforce.com and Microsoft Outlook.
    • This gives the ability to “click and dial” from the software and incoming screen pops based on the customers Caller ID.

Obviously, just like any other service out there, the VoIP system you're considering for your business is going to have different bells and whistles when you're comparing from vendor to vendor.

If there's two take-aways from this article you should remember it's this: VoIP is future thinking with mobility, flexibility, and redundancy in mind, and it's often times cheaper and easier to maintain. The rest of the tech speak at the end of the day is immaterial, since we're really focusing on creating a better, more user friendly system for you and your business.

For more information on VoIP systems, or to evaluate your needs at your business, you can contact us online, e-mail me directly at vin@tele-datasolutions.com, or touch base with me at 908-378-1218.

By Vincent Finaldi
Vice-President, Tele-Data Solutions
E-mail: vin@tele-datasolutions.com | Direct Line: (908) 378-1218
What brings me satisfaction is meeting with New Jersey–based businesses and genuinely helping them solve communication and business problems. As someone who has lived in New Jersey my entire life, I love working and playing here. I live in Morristown with my wife, Lisa, and root for the New York Giants.