VoIP costs outweighing benefits

"Firms are no longer interested in implementing IT for technology's sake, but are looking at how to justify it in terms of cost," said Daniel Singer, chief executive of IT solutions and consultancy firm FrontRunner. "Where there has been rationalisation or a department shutting down, for instance, we help organisations re-evaluate their cost base."

VoIP vendors have traditionally promoted cost savings as the main benefit of integrated voice and data networks. But the high costs of implementation mean that only a limited number of organizations will reap the financial benefits in the short term.

"Firms are calling us in to find out if the cost of installing VoIP can be justified ­ and in many cases it can't," said Singer, who added that companies are trying to safeguard themselves against an uncertain economic future by bringing in consultants to conduct inventories of their existing systems.

The cost of installing VoIP networks varies considerably, depending on the size and nature of a firm's infrastructure. The price of a single Internet Protocol (IP)-enabled telephone handset can reach £150 ($220).

In their sales presentations, many VoIP equipment vendors have stopped promoting the benefits of lower management and maintenance costs for converged voice and data systems, and are instead focusing on the advanced telephony applications that VoIP networks can support.