Cloud Phone System For Modern Businesses

TCO Analysis: How to Calculate the Real Cost of a Business Phone System

TCO Analysis: How to Calculate the Real Cost of a Business Phone System

As you consider replacing your current phone system, have you assessed the real costs of your new communication offerings? It might be an absolute “Yes” at first sight as your suppliers always offer you a clear quote. But take a moment to rethink about it. Is it the real costs that will cover the expense for the years to come? Be aware. There may be additional expenses hidden beneath the surface that you failed to consider.

To fully comprehend your telecommunications spend, TCO analysis (Total Cost of Ownership) is a critical tool. It’ll help to unveil the financial merits of different buying models (Cloud versus premises-based) and help you decide the best option for your business.

In this blog, we’ve developed an in-depth business telephony cost roll-up analyses for your reference, which is organized into two categories:

  • Upfront Costs
  • Operating Costs

Upfront Costs

Whether for on-premises or cloud-based solutions, your first outlays usually come in the form of things you can physically see or clearly price-tagged. In most cases, they will cover hardware equipment, software licensing, telephony environment upgrade, new phone system training, and deployment.

PBX Hardware and Software Licensing

It’s often said that on-premises solutions have greater upfront cost than hosted solutions, yet the major differentiator only lies in the PBX hardware investment. It’s a matter of owning infrastructure or renting services. With an on-site business phone system, you purchase your own PBX hardware upfront, while with cloud-based voice systems, you pay for ongoing user licensing. But it’s worth noting that sometimes no initial capital expenditure is required with a cloud-based solution, except for additional phone end-point purchase.

Network Upgrade, Trunk Lines and Data Center Equipment

The other big part you might need to invest in is to prepare a proper Internet/Telecom network for the new phone system. There might be additional costs for LAN/WAN/bandwidth upgrades and/or physical trunk lines for extra telco connectivity. The equipment to involve in this process may include:

  1. Routers (VoIP Gateways, Router, etc.)
  2. LAN Equipment (POE switches)
  3. Cables (Patch, Stacking Cables, Fiber Channel Connectors, etc.)
  4. Network Security Devices (Firewalls, IPS/IDS appliances, etc.)

Training and Deployment

In most cases, proprietary or legacy PBX systems would transfer a lot of IT responsibility to users, which require highly-trained support personnel to deploy and administer software and hardware, change system settings, and roll out regular system upgrades. But if you work with a highly user-friendly PBX system like Yeastar, training and deployment costs can be greatly reduced.

Such leading PBX systems, whether on-premises or cloud-based, arrive plug-and-play ready with intuitive graphical user interfaces. It’d require minimal initial upfront training for administrators to master system functions and configurations. And most, if not all, of this training is included as a part of the on-boarding process without additional cost.

Operating Costs

Operating Costs = (Maintenance + Recurring Costs) x Time

To properly predict ongoing expenses and enable apples-to-apples comparison between hosted and on-premises solutions, it’s necessary to supply TCO calculations over a certain period. It’s suggested to project the full expense over the typical lifecycle (5 to 10 years) of a premise-based IP PBX. The operating costs can be largely divided into the following 4 parts:

PBX Subscription Fees

PBX subscription is often associated with cloud-based solutions, where fully-managed services are often delivered on a standard per-user seat price that is charged on a monthly or yearly basis. For example, say you have 20 users in your office. That means you’ll pay a fee for each user to access the cloud phone system every month or year. In general, this cost depends on not only your service provider but the calling features you want. You may find plans starting as low as $15 per user/month, but the costs will rise as capacity increases. By contrast, on-premises PBX solutions do not charge recurring user access fees as you’re the sole owner of the PBX infrastructure.

Maintenance Contracts& Software Updates

If you’re using a healthy cloud-based PBX, you don’t pay additional fees for maintenance and software assurance. The cost is distributed to a per-user license over a contracted amount of time.

If you’re using a legacy (analog) phone system, maintenance can be steep, as onsite tech support is often required even for some basic configurations.

If you’re using a leading IP-based hardware PBX system that requires minimal support, the maintenance (the move, add, changes and software update) may cost only a few or even zero. But there is a certain amount of hidden costs like unexpected component break down and issue trouble-shooting that should be taken into considerations. Some on-site PBX suppliers would provide optional phone system managed services or maintenance contracts to offer low to no-cost replacement parts and maximize the ease of use for users.

Standalone Business Service and Licensing

Some business phone system solutions just don’t offer full functionality that your business needs. Costs for these services may come through third-party vendors, which can add up to substantial extra fees. Or, you may find extra costs for services such as call recording, video conferencing, and unified communications, which are delivered as standalone value-added services and charged independently as per minute/user/solution package.

Telecom Costs & Network Expense

Based on your business phone line requirement, this part may include monthly phone bills or network expenses, such as Internet access and bandwidth costs for voice over IP, physical lines with local access like PSTN, T1s, PRIs, and toll and SIP trunking charges.

In most cases, legacy phone systems require bonded T1s, PRIs, and other trunk links to connect the PBX in the building to local telcos. These lines usually charge at a much higher rate than Voice over IP, especially for long-distance or international calls. But if you’re working with an IP PBX, whether cloud-based or on-premises, you’ll have greater flexibility in choosing a cheaper option with SIP trunking.

The Bottom Line

Higher upfront does not necessarily mean a higher total cost of ownership. To get an accurate TCO analysis when comparing the on-premise PBX with the hosted, each of the above categories must be considered.

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User Login

Instantaneously receive user login credentials via email once the extension has been deployed by the adminstrator.

Log in conveniently via any web browser for access to the user portal.

Integrations

Integrate various CRM software for better customer service and satisfaction.

Enable transcription of audio messages into text with integration of third-party transcription service.

Enable API for integration with various third-party integrations for advanced performance such as call center and hotel reception services.

System

Provision email SMTP and template settings for event notifications to be sent out.

Manage storage allocation and duration of various types of data being stored on the PBX.

Determine the types of event notifications to be sent out, and the parties receiving them.

IVR

Add various audio voice prompts to be played according to different call scenarios.

Add voice prompts on multiple levels for more effecient and precise inbound call routing.

Voicemail

Customize default voicemail settings for each user extension.

Add various voicemail messages for allocation to different call scenarios and users.

Provision specific rules to how voicemail messages are played over the PBX system for better caller experience.

Reports and CDR

All call log activities are stored, with the option of having audio conversations recorded by default or for specific extensions.

Use intuitive visual call reports, to check various call statistics over extensions, trunks, queues, ring groups, and more.

Call reports can be viewed and downloaded directly from the PBX, or scheduled to be sent via email to respective parties.

Security

Restrict a general group or specific IP addresses to prevent unauthorized access to your PBX.

Limit the number of otbound calls users are allowed to make within a time period to protect against toll fraud.

Restrict certain country codes for outbound calls either company-wide or on certain extensions.

User Login

Determine extension ranges for different functions.

Define use of different voice prompts depending on call scenarios or intended function.

Provision basic and advanced SIP settings to be used on the PBX.

Recordings

Record all calls made on specified trunks, including inbound and outbound calls.

Recordings

Record all calls made on specified extensions, conferences, or call queues.

Paging and Intercom

Create different types of paging and intercom broadcast groups for selected extensions.

Set a time schedule to automatically start your broadcast.

Maintenance

Check for and download firmware upgrades to ensure that your PBX is always up-to-date.

Perform back-ups to prevent data and settings from getting lost.

Perform troubleshooting on your own to debug.

Conference

Pre-set conference settings and dial-in passwords for security, and allow internal users to send conference invites to external parties.

Speed Dial

Create multiple speed dial numbers to respective external numbers frequently used for outgoing calls.

Speed dial is activated when the set prefix (default or customized) is dialed.

Ring Group

Create multiple ring groups and determine custom ring strategies and failover settings for each.

Call Queue

Create different call queues with specific ring strategies and failover settings.

Static agents permanently answer calls in queue, while dynamic agents can log in and out. Allocate different extensions to each group.

Determine what actions are to be allowed for Mangers or Agents to manage on the Queue Panel.

Call Control

Have calls received on specific SIP trunks routed to designated extensions or destinations within the PBX.

Set-up dial patterns so that outbound calls are routed to their intended destinations.

Determine how calls are routed and received at different times of a day.

Contacts

Store, retrieve, and share company contact details easily on your PBX.

Organize company contacts into dedicated phonebooks and determine accessibility rights to extension groups for each.

Bulk import a list of contacts instead of having to key details in individually.

Role and Client Permission

Pre-defined user roles within the PBX are conveniently available for allocation, or create your own set of permissions.

Restrict users from viewing specific extensions, departments, or extension groups with Extension Visibility.

Allow or resrict specific users from managing or viewing certain company contacts

Auto Provision

Pre-defined setting parameters specific to respective IP phone models are conveniently available for easy set-up.

IP Phones can be quickly provisioned to your Yeastar PBX with just the pre-defined template and device MAC address.

Trunks

Register multiple SIP trunks on a single PBX as needed.

Different types of trunks can be created, Caller ID can be customized.

Extensions

View, deploy, add, and remove user extensions within your PBX system.

Configure default call and user settings for individual extensions.

Customize allocation of user extensions to specific ring groups.

Portal Login Page

Receive your administrator log-in credentials and set-up guide via email.

Log-in on any web-browser to get started with PBX set-up.

Installation Wizard will guide you through basic configurations.

User Login

Access all company contacts made available to you by the administrator.

Create your own personal contacts list for easy reference and dialing.

Bulk import contact details for convenient data entry.

User Login

Access and manage user settings for softphone application and voicemail.

Manage call routing and presence status for your individual extension.

Retrieve or download your personal call logs and recordings.

User Login

Receive your log-in credentials and set-up guide via email, sent by your admin.

Log-in on any web-browser to get started with PBX set-up.

Configure contacts and personal settings from the web portal.

Auto Provision

Add, remove, or modify IP phone settings from your web interface.

Upgrade IP phone firmware conveniently from your PBX.

Upload various default setting parameters specific to respective IP phone models for greater convenience during set-up.

Contacts

Store, retrieve, and share company contact details easily on your PBX.

Have detailed contact information for your vendors and clients conveniently stored .

Bulk add a list of contacts instead of having to key details in individually.

PBX Monitor

Monitor the status extensions, whether they aren idle, in use, or unavailable.

Know whether your SIP Trunk running properly, or experiencing problems.

Monitor the number of call conferences currently running on your PBX, and their individual durations.

Maintenance

Check for and download firmware upgrades to ensure that your PBX is always up-to-date.

Perform back-ups to prevent data and settings from getting lost.

Perform troubleshooting on your own to debug.

Call Detailed Report

All call log activities are stored, with the option of having audio conversations recorded by default or for specific extensions.

Filter by date, time, or extension number to retrieve specific call logs or recordings

Playback call recordings directly from the PBX or download to store externally.

Event Center

Determine what events and logs are to be recorded and/or have notifications sent.

Specify particular notifications to be sent to respective authorized personnel.

User Permission

Set up vaious groups of users for allocation to certain sets of access rules.

Determine what features a certain group of extensions can or cannot access.

Determine if users can access, play-back, or download call logs and recordings from the pbx.

Security

Restrict a general group or specific IP addresses to prevent unauthorized access to your PBX.

Determine specific the range of SIP ports for connection between your PBX and endpoints.

Restrict country codes for outbound calls either company-wide or on certain extensions.

Voice Prompt

Upload and designate customised audio recordings at multiple levels of a call journey.

Upload recorded music to fill the silence that would be heard by callers on hold.

Upload customised voice prompts to create a professional call experience.

General

Customize general call preferences either company-wide or for individual extensions.

Set-up feature dial codes for convenient user navigation to specific call features.

Determine how voicemails are retrieved, and also upload custom voicemail recordings.

Call Features

Add multiple automated responses to be played at different phases of a call journey.

Designate specific extensions to ring concurrently based on an external caller's dial pattern.

Customize messages and waiting times to keep external callers engaged when put on hold.

Call Control

Have calls received on specific SIP trunks routed to designated extensions within the PBX.

Set-up dial patterns so that outbound calls are routed to their intended destinations.

Determine how calls are routed and received at different times of a day.

Trunks

Register multiple SIP trunks on a single PBX as needed.

Provision SIP trunk settings and dedicate them to particular extensions.

Bulk add DDIs on each SIP trunk, for allocation to an individual or groups of extensions.

Extensions

View, deploy, add, and remove user extensions within your PBX system.

Allocate and deploy specific extension numbers to respective users via email.

Set-up default ring and presence status settings for individual users.

Deal One View

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View cases created for a Deal in One View.

View cases created for a Deal in One View.

Deal One View

View cases created for a Deal in One View.

View cases created for a Deal in One View.

View cases created for a Deal in One View.

Deal One View

View cases created for a Deal in One View.

View cases created for a Deal in One View.

View cases created for a Deal in One View.