Hosted telephony

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					Hosted telephony
an easy to understand
beginners’ guide

What is hosted telephony, what
do I need to know, what could it
do for my business?
a vivo white paper

                        February 2010
Introduction                                                                   3

What is hosted telephony or hosted PABX?                                   4-5
Why should I consider hosted telephony – what are the benefits?                6
Business	advantages		 	            	   	   	   	    	      	      	   					6	-	7	
Financial	benefits		    	          	   	   	   	    	      	      	   										8	
Technical	considerations			        	   	   	   	    	      	      	   										9	

Who is hosted telephony suitable for?                                        10

What facilities does hosted telephony offer?                          11 - 13

The cost – what you need to know                                      14 - 15

Hosted telephony – Questions to consider                              16 - 17

Conclusion                                                                   18

10 questions to ask potential suppliers                               19 - 21

About Vivo                                                                   22

business telecoms made easy
Hosted telephony services are changing how
small, medium and large businesses use
voice communications. They can deliver an
extraordinary range of business, financial
and technical benefits – making business
voice communications more resilient,
saving money and making it easy to adapt
to change.

This white paper has been written to help the
non-specialist understand:

   What	hosted	telephony	is	and	how	it	differs	from	traditional	phone	systems

   What	the	benefits	are	and	why	you	should	consider	this	technology

   Who	hosted	telephony	services	are	designed	for

   What	facilities	hosted	telephony	services	offer

   The	costs	–	what	you	need	to	know	

   Points	to	consider
   Ten	key	questions	to	ask	potential	providers

                                             business telecoms made easy
                       What is hosted telephony
                       or hosted PABX?
                       Office	phone	systems	are	often	called	PBXs	(Private	Branch	Exchanges)	
                       or	PABXs	(private	automatic	branch	exchanges).	In	the	simplest	terms,	
                       they	connect	any	two	(or	more)	phone	users	in	the	same	organisation	
                       together.	Of	course	they	can	do	a	vast	amount	more,	providing	facilities	
                       such	as	voice	mail,	conferencing,	call	forwarding	and	so	on	to	make	
                       life	easier.

                       PBXs	are	sited	at	the	customer’s	site,	and	connect	to	the	outside	world	
                       via	analogue	and	digital	access	circuits,	with	cabling	around	the	
                       customer	location	to	which	handsets	are	connected.	The	intelligence	to	

Hosted systems         make	the	components	work	together	is	within	the	PABX	itself.

are usually quicker,
                       Hosted	phone	systems,	by	contrast,	take	most	of	the	switching	and	
cheaper and easier     intelligence	of	the	conventional	on-site	system	and	move	it	off-site	to	a	
to install and there   remote	location	where	it	is	managed	by	the	service	provider.	Equipment	
is less need for       at	the	customer	site	is	limited	to	the	phones	themselves,	a	LAN	switch	
on-site expertise.     and	broadband	routers.	

                                                                    business telecoms made easy
As	a	result,	hosted	systems	are	usually	quicker,	cheaper	and	easier	
to	install	and	set	up	than	conventional	phone	systems.	As	they	are	
hosted	remotely,	there	is	less	need	for	on-site	expertise	or	maintenance.	
However,	as	the	service	is	shared	with	many	other	users,	upgrades	or	
enhancements	will	occur	when	the	service	provider	decides	to	
implement	them,	so	a	hosted	service	has	theoretically	less	flexibility.	(In	
practice	this	would	not	be	a	constraint	except	for	the	most	sophisticated	
users	with	highly	bespoke	needs.)

In	contrast,	premise-based	PBXs	require	equipment	to	be	located	on	
site.	The	organisation	will	be	responsible	for	installing,	managing	and,	
when	required,	upgrading	the	equipment,	as	needs	change.	In	
comparison	to	a	hosted	service,	there	is	a	significantly	higher	start-up	
cost,	but	ongoing	costs	can	be	much	lower.	

The	typical	scenario	for	a	hosted	service	provider	is	that	there	are	no	(or	
low)	setup	costs,	then	a	fixed	monthly	charge	per	user.	It	is	
straightforward,	therefore,	to	predict	the	cost	of	growth	with	a	hosted	
telephony	service.	

Hosted telephony services are good for:
    Small	and	medium-size	businesses.

    Organisations	with	multiple	offices	or	remote	users,	and	those	that	
    anticipate	rapid	changes	in	size.

    Any	organisation	wishing	to	avoid	the	significant	capital	cost	of	
    acquiring	an	on	site	phone	system.

    Organisations	with	limited	on-site	knowledge	of	managing	a	phone	

    On-site	or	premise-based	systems	are	best	for	large,	stable	
    businesses	with	a	predictable	number	of	users	that	need	custom	
    features	or	to	integrate	their	phone	system	into	their	business	

                                              business telecoms made easy
                       Why should I consider
                       hosted telephony – what
                       are the benefits?
                       Business advantages
                       Hosted	services	are	not	just	an	alternative	to	a	traditional	phone	system,	
                       they	offer	an	approach	that	yields	very	significant	financial	and	business	

                       Disaster recovery
                       Firstly	as	they	are	often	based	on	‘carrier	grade’	‘software	and	
                       hardware,	and	can	be	expected	to	be	housed	in	dedicated	data	centres,	
                       they	deliver	a	level	of	reliability	and	disaster	recovery	capability	that	
                       most	organisations	currently	don’t	benefit	from.	

                       A	hosted	service	by	design	is	more	resilient,	and	in	the	event	of	failure	
                       will	be	backed	up	at	a	second	site.	They	offer	an	excellent	disaster	
                       recovery	solution	for	organisations	that	may	not	have	the	resources	to	
                       implement	their	own	telecommunications	DR	strategy.

A hosted service is    In	addition,	should	the	customer	have	problems	at	their	site,	calls	can	
more resilient, and    be	easily	re-routed	to	another	office,	mobiles	or	staff’s	home	lines,	

will be backed up at   ensuring	continuity	of	operation.	

a second site. Calls
                       Home based staff
can be easily
                       Hosted	services	make	it	very	straightforward	to	extend	the	facilities	of	
re-routed to another   the	office	to	home	based	staff.	With	either	soft	phones	(a	PC	application	
office, mobiles or     that	allows	calls	to	be	made	and	received	from	a	PC	with	a	headset)	or	
staff’s home lines,    a	conventional	handset,	they	can	operate	exactly	as	if	they	were	just	
ensuring continuity    another	extension	in	the	office.	Remote	and	field	staff	can	improve	their	
of operation.          productivity	with	features	such	as	‘find	me’.

                                                                       business telecoms made easy
Business advantages continued...
Multiple site locations
Hosted	telephony	services	work	extremely	well	in	multiple	site	
situations.	They	facilitate	organisations	operating	at	more	than	one	
location	acting	like	a	single	entity,	for	example	with	one	dialling	plan	and	
abbreviated	dialling	between	offices.	Most	services	don’t	charge	for	‘site	
to	site’	calls	as	they	are	within	the	providers	‘domain’.	For	businesses	
with	call	centres,	for	example,	calls	can	be	divided	between	different	
sites,	or	hunt	groups	set	up,	to	help	balance	call	volumes.

Advanced features
Many	advanced	features	such	as	interactive	voice	response	(IVR)	and	
call	recording	can	be	easily	implemented	with	a	hosted	service.	Typically	
this	can	be	by	user,	site	or	across	the	whole	organisation,	and	normally	
the	same	pricing	approach	as	the	basic	service,	namely	charged	per	
user,	per	month	applies.

Retain existing numbers
Another	great	advantage	with	the	hosted	approach	is	that	existing
numbers	can	be	ported	to	the	hosted	service,	so	there	is	no	need	to	
change	stationary,	signage	etc.	Equally	important,	if	a	business	chooses	
to	re-locate,	they	can	retain	their	phone	numbers.	Furthermore	a	
business	doesn’t	need	to	take	numbers	from	its	own	geographic	area,	
for	example	a	business	in	Manchester	could	utilise	London	0207	or	
0208	numbers	to	create	the	impression	of	a	presence	in	the	capital	and	
vice	versa.	

User controlled features
Finally,	users	can	be	given	control	over	their	own	call	handling	features	
and	services	with	traditional	star	codes,	phone-based	graphical	user	
interfaces	or	their	own	web	portal.	So	features	like	day-of-week	or	
time-of-day	based	routing	become	easy	to	use.	And	there	is	no	need	
to	wait	for	an	administrator	or	your	network	provider	to	implement	the	
facility,	or	to	make	changes.

                                              business telecoms made easy
Financial benefits
One	of	the	big	drivers	for	the	adoption	of	hosted	telephony	services	is,	
simply,	cost.	

No capital investment
The	usual	capital	outlay	for	phone	system	equipment	is	eliminated.	
Whilst	some	equipment	is	required	this	will	be	a	relatively	small	cost	vs.	
a	conventional	on-site	phone	system.	If	required,	most	providers	can	
provide	lease	arrangements	that	roll	the	equipment	cost	and	service	
rental	into	a	single	monthly	fee.

Predictable costs
As	the	number	of	users	grows,	both	initial	and	more	importantly	ongoing	
charges	are	straightforward	and	predictable,	based	on	a	per	user,	per	
month	approach.	

No annual maintenance costs
Furthermore,	unlike	a	more	traditional	approach,	there	is	no	annual	
maintenance	contract	associated	with	a	hosted	service.

Bespoke fit
Hosted	services	can	be	sized	to	the	customers	precise	needs,	so	there’s	
no	need	to	invest	in	a	phone	system	that	is	either	too	large	for	present	
needs,	or	may	require	upgrading	as	the	organisation	grows	in	the	future.

Cost effective advanced features
Another	good	reason	to	consider	hosted	telephony	services	is	that	they	
can	offer	features	that	are	either	not	available	or	cost-prohibitive	on	
some	phone	systems.	Examples	would	include	integration	with	desktop	
software	like	Microsoft	Outlook,	call	routing	features,	and	interactive	
voice	response	(IVR	).

In house resource costs reduced or eliminated
Many	small	and	medium	sized	business	won’t	have	or	don’t	
necessarily	want	to	deploy	resources	to	manage	an	in-house	phone	
system,	so	moves,	changes	or	upgrades	can	be	both	costly	and	time	
consuming.	Hosted	services	eliminate	this	issue.

Access costs are far lower
Finally,	as	hosted	services	use	broadband	access	to	connect	to	the	
site,	costs	versus	conventional	analogue	or	digital	circuits	will	be	much	
lower,	in	the	order	of	30%	or	more.

                                              business telecoms made easy
                         Technical considerations
                         Management of service is provider’s responsibility
                         One	of	the	strengths	of	hosted	telephony	is	that	less	expertise	is	
                         required	by	the	customer,	as	much	of	the	support	is	shifted	to	the	
                         provider	of	the	service.	The	management	and	monitoring	of	the	service	
                         is	the	provider’s	responsibility.	Furthermore	the	infrastructure	(network,	
                         servers,	hosted	environment)	is	normally	of	a	‘carrier’	standard,	offering	
                         a	level	of	resilience	that	would	be	cost	prohibitive	for	most	individual	
                         organisations	to	implement.	In	addition	far	less	on	site	technical	
                         support	is	required.

                         Enhancements come as standard
                         Given	a	hosted	service	is	a	shared	facility	across	many	users,	all	will	
                         benefit	as	services	are	improved	and	enhanced,	this	can	be	expected	to	
                         be	a	standard	part	of	the	service,	not	an	additional	cost.

                         Changes are easy to manage
                         For	example	additional	users	are	easy	to	add	for	the	service	
Far less on site         provider	–	it’s	essentially	a	case	of	activating	another	user	and	providing	
technical support is     a	handset	(or	softphone).	No	work	is	required	at	the	customer	site,	other	
required. Services       than	plugging	in	a	(pre-configured)	phone	to	the	local	area	network.	
are improved and
enhanced with no         Moves	and	changes	are	also	very	easy	to	implement,	again	no	technical	
                         knowledge	is	needed.	Moving	a	user	to	a	new	office	is	simply	a	case	of	
additional cost.
                         moving	their	phone	(and	they	keep	their	extension	numbers).	
New implementations
can be phased in so      Phased implementation available
there is no ‘big bang’   Finally	hosted	services	can	be	implemented	in	a	controlled	and	phased	
risk.                    manner,	a	few	users	or	departments	at	a	time,	there	is	no	‘big	bang’	risk	
                         when	opening	a	new	site	or	re-locating	for	example.	

                                                                       business telecoms made easy
Who is hosted telephony
suitable for?
Hosted	telephony	services	are	finding	applications	in	many	different	
types	and	size	of	companies,	across	all	market	sectors.

New organisations
New	organisations	can	be	up	and	running	quickly,	without	capital	
expenditure	for	a	new	phone	system.	They	also	have	the	security	of	
being	able	to	expand	the	service	as	their	needs	grow,	with	predictable	
costings.	Further,	they	can	implement	sophisticated	features	easily	
and	cost	effectively.

Changing organisations
Any	growing	organisation,	or	those	with	a	variable	headcount	(for	
example	for	seasonal	reasons)	or	active	with	mergers	or	acquisitions,	
will	find	delivering	the	right	capacity	at	a	predictable	cost	that	is	offered	
by	hosted	services	extremely	attractive,	technically	and	commercially.

Organisations working across multiple locations
If	you	have	multiple	locations,	or	headquarters	with	branch	offices	or	
retail	outlets	and	so	on,	you	can	benefit	from	a	simple	to	install,	centrally	
managed	service.

Organisations with mobile staff and home workers
Hosted	services	help	to	support	remote	staff	by	offering	them	access	
to	the	same	phone	services	as	office	based	colleagues,	and
integrating	them	into	a	single	unified	numbering	plan.	They	will	appear	
as	just	another	extension	on	the	company	phone	network,	regardless	
of	their	physical	location.

Short term or temporary requirement for a phone network
Hosted	services	can	offer	an	option	for	temporary	sites	that	allows	a	
phone	service	to	be	delivered	quickly	and	cost	effectively.	Essentially	
as	long	as	there	is	access	to	broadband,	a	simple	router	and	phone	can	
get	a	user	up	and	running,	and	when	required	they	can	easily	re-locate,	
keeping	their	number.

                                               business telecoms made easy
What facilities does hosted
telephony offer?
Most	hosted	services	deliver	a	very	wide	range	of	facilities	that	many	
users	will	be	familiar	with,	and	often	offer	additional	‘opt	ins’	for	more	
complex	requirements	or	the	more	sophisticated	user.	

Hosted services – typical features
Automated Attendant
An	automatic	system	to	answer	phones	with	the	ability	to	build	phone	
menu	systems,	add	call	menus,	transfer	to	voice	mail	and	create	flexible	
and	programmable	rules	to	handle	all	of	these	features,	catering	for	
example	for	out	of	hours	calls,	holiday	periods	or	busy	periods.	

Call Menus
Flexible	call	management	menus	with	user	selectable	options	–	a	more	
advanced	version	of	the	traditional	phone	tree/	menu	systems.	A	
better-quality	system	will	let	you	have	multiple	sets	of	menus	and	even	
change	them	based	on	time	or	on	information	gleaned	from	the	caller	ID.	

Managing Extensions
Features	to	help	the	phone	system	administrator,	such	as	the	ability	to	add	
new	extensions,	remove	unneeded	extensions,	change	extension	locations	
and	much	more	from	a	Web-based	control	panel.	

Call Forwarding
Automatic,	programmed	or	manual	call	forwarding	to	any	number.	

Call Transfer
The	ability	to	transfer	calls	between	extensions	without	going	back	
to	a	central	switchboard.	

Call Parking
Essentially	a	group	hold	–	put	the	caller	on	hold	in	a	waiting	area	so	
that	any	other	phone	system	user	can	pick	the	call	up.	

Call Hold
Place	callers	on	hold,	with	user	selectable	hold	music	and	
programmable	options	about	handling	hold	time	length.	

                                               business telecoms made easy
Hosted services – typical features continued...
Hunt groups	
Will	look	or	‘hunt’	for	a	free	agent	to	answer	incoming	calls.	

Instantaneous	set	up	and	useful	for	internal	and	external	users.

Call recording
Many	hosted	services	will	allow	either	selective	or	‘blanket’	recording	
of	calls.

Call Routing
Setting	up	programmed	rules	to	route	calls	based	on	flexible	criteria	
like	caller	ID	or	time,	or	even	next	available	extension	in	the	designated	
call	management	group.	

Scheduled Call Routing
Handling	incoming	calls	differently	based	on	time	received	–	and	even	
setting	up	several	systems	of	call	management	that	are	all	different	
depending	on	time	of	day	or	day	of	the	week.	

Automatic Ring Back Features
Features	to	automatically	return	calls	based	on	various	programmable	

Call Screening
The	ability	to	routinely	screen	calls	as	they	come	in.	

Call Monitoring
The	ability	to	silently	monitor	calls	as	they	progress	for	purposes	like	
sales	training	and	customer	support.	

Barge in
The	ability	to	break	in	to	a	call	between	two	other	people	–	usually	
related	to	call	monitoring.	

Voice mail and Voice Mailboxes
All	systems	will	offer	this	basic	facility.

Web-Based Management and Administration
To	make	it	quick	and	easy	to	manage	your	phone	system	directly	from	
a	web	browser	–	this	can	include	the	ability	to	add	configuration	and	
management	functions.	

User Directory
Some	form	of	user	directory	and	address	book	that	is	part	of	the	phone	
system	and	is	centrally	updated.	

                                              business telecoms made easy
Remote User Features
Branch Office Support
The	ability	to	manage	and	remotely	administer	extensions	at	other	
locations	as	easily	as	if	they	were	local.	

Features to Support Remote Users
One	of	the	most	powerful	features	of	hosted	telephony	is	the	ability	to	
have	remotely	located	employees	appear	to	external	and	internal	
callers	as	if	they	are	at	the	main	office.	

Unifying/Integrating Office Systems
Full Outlook/Email Integration
Incoming	calls	can	be	matched	with	contact	management	records	and	
outgoing	calls	can	be	initiated	from	within	Outlook.	So	users	can	click	
on	contact	management	records	and	dial	from	within	Outlook	or	other	

Voice mail to Email
Sending	all	voice	mail	from	a	mailbox	to	an	email	account	where	
messages	can	be	opened	and	listened	to	on	a	PC	–	as	well	as	
stored	and	managed.	

Data Network Integration
Some	form	of	integration	into	your	basic	data	network	so	that	
‘click-to-call’	functionality,	integration	with	office	document,	email	
systems,	or	even	full	blown	CRM	systems	can	be	added.	

Lets	users	“click-to-dial”	from	a	number	on	screen	without	having	to	
dial	the	number	from	the	phone	itself.	

The	above	is	just	an	indication	of	the	features	most	service	providers	
would	offer.	Many	other	features	are	also	available.	

                                               business telecoms made easy
                       The cost – what you
                       need to know
                       When	considering	the	costs	of	a	hosted	telephony	service,	there	
                       are	various	one-off	and	recurring	costs	to	factor	in.	In	addition	most	
                       providers	can	package	pricing	in	a	variety	of	ways,	for	example	to	
                       ‘roll-up’	all	costs	into	a	single	monthly	payment.	It	is	also	important	
                       to	consider	questions	such	as	contract	term,	support	costs,	early	
                       termination	penalties,	costs	for	additional	features,	and	tariffs	for	
                       call	charges.

                       A	typical	configuration	might	require	the	following	elements:

                       The	supplier	should	be	able	to	recommend	the	type	of	broadband	
                       access	you	require	to	support	a	given	number	of	users,	and	evaluate	
                       whether	existing	broadband	connections	services	are	up	to	the	job,	
                       or	if	new	broadband	circuits	are	necessary.	


                           LAN	Switch	(to	provide	power	over	the	network	for	the	phones)

                           Broadband	router

                           Desk	phones	or	PC	Softphones	(with	headsets).	There	are	a	wide	
                           variety	of	IP	phones	from	many	manufacturers	–	it’s	really	a	question	
                           of	features,	personal	taste	and	of	course	budget.

                       All	of	the	above	can	be	either	purchased	outright,	leased,	or	be	
                       factored	into	an	agreed	monthly	amount.
The required
equipment can be       Licence and set up costs
either purchased       Some	services	levy	start	up	or	licence	activation	fees,	sometimes	for	
outright, leased, or   just	the	core	service,	with	additional	features	such	as	call	recording	or	
the cost factored      conferencing	requiring	an	additional	licence.	Establish	exactly	what	you	
into an agreed         require	and	what	is	included.	As	above	these	costs	can	be	absorbed		

monthly amount.        into	the	monthly	recurring	fees.

                                                                      business telecoms made easy
On going costs

The	ongoing	costs	will	comprise:	

   Line	rental	charges

   Equipment	costs	(if	leased	or	rolled	into	the	monthly	fee)	

   The	monthly	fee,	per	user,	for	the	hosted	service	itself.	

   You	need	to	bear	in	mind	charges	for	outbound	calls	as	well.	

It’s	also	worth	asking	about	delivery	and	set	up	charges	for	equipment,	
project	management,	and	training	and	support	costs.

Summary – key cost considerations
   Establish	your	particular	needs	–	what	facilities	will	you	need?

   Get	a	detailed	proposal	to	cover	all	charges,	one	off	and	recurring.

   What	equipment	is	needed	and	how	will	you	fund	it?	Up-front,	or	
   rolled	into	a	monthly	payment?

   Understand	any	additional	costs,	for	project	management	or	
   training	for	example.

   Be	clear	about	the	call	charges	that	will	apply.

   Understand	the	contract	term	you	are	committing	to	and	any	
   penalties	that	may	apply	for	changes	or	early	termination.

                                             business telecoms made easy
                        Hosted telephony checklist
                        – questions to consider
                        Before	you	begin	to	negotiate	with	a	hosted	telephony	provider,	you’ll	
                        want	to	gather	some	basic	information	about	your	current	situation.	Use	
                        this	checklist	as	a	starting	point:

                           How	many	employees	are	in	your	organization?	How	many	
                           locations	do	you	have	that	will	need	the	service?	

                           How	many	remote	or	mobile	users	do	you	have	that	will	not	have	a	
                           local	office?	

                           What	are	your	current	broadband	connection	details	—	bandwidth,	
                           type,	lines	and	so	on?	Make	sure	to	have	as	much	information	
                           available	as	possible,	including	current	supplier	and	level	of	service.	

                           What	is	your	current	network	load	and	available	unused	bandwidth?	
                           Your	provider	may	want	to	test	your	network	to	determine	this	
                           information	for	themselves,	and	if	you	don’t	have	enough	you	may	
                           need	a	network	or	broadband	upgrade.	

                           What	are	your	existing	phone	system	details?	Manufacturer,	number	
                           of	lines,	connections	and	so	on.	

                           Do	you	have	any	need	or	desire	to	keep	existing	lines?	Will	you	only	
                           be	upgrading	part	of	your	organisation?	What	is	your	budget?	Your	
                           total	project	cost	limits	and	target	cost	per	month	per	user?	

                           What	is	your	mix	of	calling?	Average	amount	of	internal,	local,	
                           long-distance	and	international	calls	per	month.	If	you	don’t	know,	
How many                   have	a	few	recent	phone	bills	ready.	
employees need to
keep existing lines?       What	is	your	percentage	of	inbound	versus	outbound	calls?	

Specify your business      	
                           Once	you	have	this	information,	you’re	ready	to	begin	talking	to	a	
requirements up
                           hosted	service	provider.	Specify	your	business	requirements	up	front	
front and make sure        and	make	sure	you	know	which	you	are	prepared	to	drop	in	return	
you know which you         for	a	lower	cost.	In	practice,	you	are	likely	to	have	a	few	business	
are prepared to drop       features	in	mind	that,	along	with	basic	phone	features,	are	must	
in return for a            haves.	Everything	else	will	be	optional,	but	keep	an	eye	to	the	future	
lower cost.                if	possible.

                                                                      business telecoms made easy
Ask yourself these questions – they’re typical
issues that can change costs:

  Do	you	need	an	incoming	0800	number?	

  Do	you	have	a	receptionist/phone	operator	or	do	you	want	
  an	auto-attendant?	

  Do	you	need	to	be	able	to	make	conference	calls?	How	large,	
  how	many	and	across	how	many	locations?	

  Do	you	have	a	call	centre?	

  Is	call	recording	needed?	Selectively	or	for	all	calls	and	users?

  Do	you	need	integrated	voice	response	(IVR	voice	menus)?	

  Do	you	have	someone	available	to	manage	the	system	for	your	
  employees	or	are	they	going	to	have	to	do	it	themselves?	

  Do	you	need	to	integrate	with	Outlook	or	other	office	systems?	
  How	fast	are	you	going	to	need	to	grow	the	system	and	how

  What	level	of	service	and	SLAs	(service	level	agreements)	do	
  you	need?	

                                            business telecoms made easy
Hosted	phone	systems	provide	small-	to	medium-sized	businesses	with	
abilities	and	features	that	are	available	to	larger	organisations,	while	
providing	the	potential	to	reduce	long-term	operating	costs	
considerably.	As	with	any	rapidly	growing	technology,	there	is	a	wide	
variety	of	providers	and	a	range	of	features	at	widely	varying	prices.

Key	benefits	include:

    Basic	operating	cost	reductions	due	to	lower	call	charges,	the	need	
    for	only	one	communications	network	and	lower	maintenance	costs.	
    A	minimal	investment	risk,	because	no	(significant)	upfront	
    investment	is	needed.	
    Straightforward	installation	costs	based	on	tested,	reliable	
    components	connecting	to	a	system	your	IT	personnel	already	
    Improved	efficiency	and	operations	within	your	organisation.	
    New	features	that	can	improve	your	business’s	effectiveness.	

It	is	important	to	make	sure	that	your	system	has	the	basic	features	that	
you	require	now	for	the	operation	of	your	business	and	for	its	future	
growth	than	to	drive	the	cost	to	the	absolute	bare	minimum.

Be	clear	about	the	initial	and	ongoing	costs,	contract	terms	and	
additional	costs	you	may	be	committing	to.

                                               business telecoms made easy
                           10 Questions
                           to ask your hosted telephony
                           provider before you sign a contract

                           Signing	up	for	a	hosted	telephony	service	needs	to	be	considered	
                           carefully.	What	term	contract	is	appropriate,	what	facilities	do	you	need,	
                           what	are	the	hidden	costs?

                           The	key	to	agreeing	a	contract	with	the	service	you	need	is	to	make	sure	
                           you	ask	the	right	questions.	This	list	covers	the	key	questions	to	ask	
                           before	you	sign	on	the	dotted	line.	

                           1. What is the contract term and termination policy?
                           Establish	the	initial	term	commitment	and	whether	you	can	get	out	early,	
                           and	if	so	what	the	termination	costs	might	be.	You	will	probably	have	in	
                           mind	the	initial	contract	period	you	feel	comfortable	with,	but	it’s	also	
                           important	to	ascertain	if	there	are	arbitrary	or	excessive	early-termination	
                           penalties,	or	minimum	spend	commitments.	Also	check	the	terms	that	
                           apply	to	equipment	rental	(if	you	don’t	purchase	outright)	as	well	as	the	
                           service	itself.

                           2. What start up costs are there beyond setup and equipment fees?
                           This	is	where	you	want	to	look	for	hidden	costs.	Find	out	exactly	what	
What term contract         you’ll	need	to	get	service.	Ask	if	phones,	LAN	Switches,	routers	and	other	
is appropriate, what       add-ons	are	included	or	if	they	cost	extra.	Will	you	need	additional	or	
facilities do you need,    dedicated	broadband	access?	

what are the hidden
                           ‘Bundled’	deals	that	roll	up	installation	and	equipment	costs	may	
                           appear	attractive,	but	could	be	based	on	a	minimum	configuration,	or	on	
                           basic	equipment,	especially	phones	that	may	not	have	all	of	the	features	
‘Bundled’ deals that       you	require.	
roll up installation and
equipment costs may        Is	equipment,	installation,	project	management,	delivery	and	training	
appear attractive.         included	or	an	additional	cost?

                                                                          business telecoms made easy
3. What day-to-day usage costs are not covered by my
service plan?	
What	are	the	charges	for	voicemail	or	conferencing,	for	example?	

Make	sure	there	aren’t	any	add-on	fees	for	important	features:	some	
providers	charge	more	for	conference	calling,	others	for	some	advanced	
features.	Make	a	quick	list	of	all	the	communications	needs	that	you	
have,	then	ask	about	all	the	items	so	you	can	forecast	prices	accurately.	

4. Can the system handle outbound and inbound faxes? Can I just
plug in a fax machine or do I need special equipment?
Some	services	can’t	handle	faxes,	while	others	require	a	special	faxing	
module.	Make	sure	you’re	covered	and	find	out	costs.	A	typical	solution	
is	to	obtain	an	extra	box	or	adapter	for	a	fax	line,	which	will	cost	extra.	
But	some	services	are	smart	enough	to	route	faxes	beyond	the	adapter	
and	deliver	them	to	email	inboxes	as	well.	Check	the	fine	detail	first.	

5. Do I need add-ons or extras to handle old-style analogue phones
that I already have or that remote or branch offices have already
Fortunately	there	is	a	solution	to	this	issue	that	can	save	you	some	
money.	If	you	have	offices	that	already	have	modern	analogue	phones,	
some	services	will	work	with	them	as	transparently	as	with	more	
advanced	SIP	(Session	Initiation	Protocol)	phones.	This	is	particularly	
important	for	remote	branches	especially	if	you	need	to	do	a	phased	
rollout.	You	will	need	to	double	check	what	features	are	supported	on	
analogue	phones	and	how	they	are	operated.	If	it	is	too	difficult	to	
transfer	calls	for	example,	this	feature,	even	if	it	is	supported	by	the	
provider,	might	as	well	not	be	there.	

6. How does the system handle remote and mobile workers?
The	key	here	is	to	check	out	whether	the	experience	is	the	same	for	a	
telecommuter	in	a	rural	area	as	it	is	for	someone	at	a	head	office	and	how	
it	will	handle	people	on	the	road.

If	you	don’t	have	mobile	or	remote	requirements,	obviously	this	isn’t	a	
concern	right	now,	but	in	time	it	may	be.	And	if	you	do	have	remote	and	
mobile	employees,	then	you	need	to	find	out	what	the	provider	can	and	
cannot	do	for	you.	Some	providers	can	handle	any	mobile	or	remote	
phone	almost	as	easily	as	an	extension	in	the	main	office,	but	others	
cannot.	Many	hosted	phone	services	handle	remote	users	very	well	and	
this	can	be	a	great	extension	for	your	business.

                                               business telecoms made easy
7. If I underestimate my requirements and need a major upgrade or
my company grows, what are the additional costs for upgrading?
Establish	at	the	onset	what	additional	charges	may	apply,	including	
hardware	and	broadband	upgrades	as	well	as	additional	user	licenses.	Is	
your	provider	geared	towards	the	small,	medium	or	large	end	user	market	
and	how	does	that	fit	with	your	company	today	and	where	you	might	be	in	
a	few	years	time?

8. How do you guarantee service and support?
Quality	of	service	is	a	big	differentiator	among	providers.	Check	if	you	
have	issues	how	you’ll	get	support,	who	you	should	contact	and	how	fast	
fixes	will	happen.	When	there	is	a	complex	problem	and	your	network	
equipment	supplier,	your	broadband	supplier	and	your	service	provider	
are	all	pointing	fingers	at	each	other,	you	want	a	provider	that	will	step	up	
to	solve	the	problem.

These	are	all	questions	to	ask	the	provider	directly.	If	they	can’t	more	than	
satisfy	you	in	this	area,	look	elsewhere.	Your	communications	system	
is	vital	to	your	success,	so	don’t	put	yourself	in	a	position	of	being	held	
hostage	by	an	incompetent	provider.	It	obviously	helps	if	your	broadband	
supplier	and	your	IP	phone	provider	are	one	and	the	same.	

9. Can you provide references?
Always	a	good	question	to	ask.	What	is	the	track	record	of	the	provider	
your	are	dealing	with?	How	long	have	they	been	established,	how	many	
users	do	they	have?	Can	they	supply	references	for	organisations	similar	
to	your	own	in	size	and	with	broadly	similar	needs,	perhaps	in	the	same	
market	sector?

Their	experience	will	often	be	more	illuminating	than	any	amount	of	
dialogue	with	a	provider.

10. How do I know you are going to be around in two years,
let alone three?
Communications,	hosted	telephony	and	VoIP	is	an	industry	of	
consolidation	and	aggressive	competition.	Find	out	if	your	provider	is	
stable.	Also	check	where	you	would	stand	contractually	if	your	provider	is	
acquired.	Ideally,	you	want	the	new	provider	to	take	up	your	contract	with	
no	change,	while	giving	you	the	option	of	moving	on	without	penalty	if	you	
don’t	like	the	new	arrangement.	

                                              business telecoms made easy
About Vivo
Vivo provide independent advice and
fresh thinking for your business
mobile, landline and text services.
We advise on ways to improve your
business to business telecoms
services, helping you lower costs,
increase efficiency, enhance
customer service – and sell more.

To find out more contact Vivo:
call 024 76 412 414

                           business telecoms made easy

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