How to Determine TCO for IP Telephone Systems

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1 How to Determine TCO for IP Telephone Systems

2 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 2 INSIDE: Getting Started What is TCO for UC? Count up Operational Costs Consider the Deployment Size How Much Training is Required? Consider the Features Cut Management Overhead Factor in the Cost of Downtime Get the Best Deal ShoreTel Connect: Brilliantly Simply UC with Low TCO

3 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 3 Getting Started In today s business world, workers need the ability to communicate how they want, when they want, and wherever they are, simply and easily. This has driven the need for unified communications (UC), which is the integration of the key components for robust business communications including voice, , instant messaging, presence, calendaring, video and audio conferencing and desktop sharing. That s why the global UC market is expected to grow at a CAGR of 14 percent from 2014 to There are numerous phone systems available that provide UC and they come in different deployment options onsite, cloud or hybrid. Yet when organizations select their next business phone system, it s essential to consider not only the capabilities of the system, but also the total cost of ownership (TCO). 1. Global UC Market, , TechNavio, November, 2015.

4 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 4 What is TCO for UC? When a UC solution is considered, it is often judged in terms of capital expenditures only. Organizations can overlook additional capital and organizational costs such as network upgrades, system implementation and ongoing system management. In order to accurately access TCO for UC systems, organizations need to consider: ) Operational costs ) Deployment size ) Training needs ) Requirements and features OPERATIONAL COSTS SYSTEM AVAILABILITY AND RELIABILITY ) Management overhead TCO DEPLOYMENT ) System availability and reliability SIZE MANAGEMENT OVERHEAD TRAINING NEEDS REQUIREMENTS AND FEATURES

5 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 5 Count up Operational Costs Many organizations focus heavily on the upfront costs of buying an IP telephone system, but the ongoing operating costs can really add up over time. Upfront Costs ) IP telephony equipment, including phones, software and voice switches ) Network upgrades ) System design and implementation ) User and administrator training Ongoing Costs ) System maintenance and software upgrades ) Moving, adding and changing users ) System management ) Training new administrators and users ) System downtime The following is a comparison of first-year costs among the major IP telephony providers, which ranked ShoreTel at the lowest. $942 $800 $805 $814 $817 $683 $711 $717 $566 $605 Source: Nemertes Research 2 ShoreTel Avaya Interative Cisco NEC Unify Alcatel Intelligence Lucent Mitel Microsoft OVERALL MEDIAN 2. True Cost of Ownership for Unified Communications: How Vendor Selection Impacts ROI, Nemertes Research, July 2015

6 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 6 Consider the Deployment Size Not surprisingly, the cost for an IP phone system is related to the size of the organization, and larger companies often benefit from economies of scale. In fact, an organization with fewer than 1,000 users may pay up to twice as much in the first year than an organization with more than 1,000 users. The following are the first year TCO for different-sized organizations, based on vendors. ShoreTel has the lowest costs for IP telephony in the first year for organizations of all sizes. $735,000 $2,739,000 $18,260,000 $599,000 $618,200 $2,331,000 $2,343,000 $15,540,000 $15,620,000 $521,600 $555,000 $396,200 $431,200 $1,296,000 $1,416,000 $1,710,000 $1.537,500 $9,440,000 $8,640,000 $11,400,000 $10,250,000 $270,800 $1,026,000 $6,840,000 ShoreTel NEC Interative Alcatel Avaya Cisco Intelligence Lucent Microsoft OVERALL MEDIAN ShoreTel Cisco NEC Avaya Interative Alcatel Intelligence Lucent Microsoft OVERALL MEDIAN ShoreTel Cisco NEC Avaya Interative Alcatel Intelligence Lucent Microsoft OVERALL MEDIAN FIRST-YEAR TCO: 200 ENDPOINTS FIRST-YEAR TCO: 1,500 ENDPOINTS Source: Nemertes Research 2 FIRST-YEAR TCO: 10,000 ENDPOINTS 2. True Cost of Ownership for Unified Communications: How Vendor Selection Impacts ROI, Nemertes Research, July 2015

7 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 7 The Cost of Training Workers want a phone system that is intuitive, easy to use and doesn t require extensive training. Administrators don t want to spend an inordinate amount of time spent on training related to administrating new switches and software, troubleshooting phones and monitoring the systems and network associated with a UC system. Yet all this can add to the TCO of a UC system. Consider how quickly workers and administrators will learn the new phone system and how much (or how little) training is required. All too often, businesses are surprised by the complexity of using and managing their new phone systems. Dial plans are difficult to set up. Monitoring and managing all of the capabilities require multiple tools. The system may be so complex that the office manager or IT people on staff need help from outside consultants.

8 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 8 What Features Do You Need? Businesses should look for a phone system that integrates the desired components for business communications into a single package. Many businesses are surprised to find that some UC features are not included in the phone system and cost extra. Common features of a UC system include: ) Voice Phone calls have superior sound quality and reliability. ) Instant Messaging Workers can communicate easily using instant messaging. ) Presence Workers can check the availability of a coworker. ) Video and Audio Conferencing Users can schedule, manage and participate in audio conferences and online sharing sessions on the devices of their choice. Integrated conferencing eliminates the need for expensive third-party conference call services. ) Mobility Workers can use their favorite smartphones and tablets with their business phone system so they can stay connected from anywhere while keeping business and personal calls completely separate. ) Application Integration Integrating phone system functionality into business applications that track and measure contacts, such as CRM, ERP and cost accounting, leads to higher productivity. ) Deployment Choice Businesses should have the choice to deploy their UC systems onsite, in the cloud, or both (hybrid).

9 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 9 Cut Management Overhead Consider the effort to manage and operate an IP phone system every day. There are duties like setting up a new employee with phone number, conferencing and instant messaging as well as more complex efforts, such as troubleshooting system problems or integrating applications. Administrators should be able to manage their entire IP phone system, including all of the UC capabilities, from a single management tool from anywhere. Management complexity should not increase as the number of users, locations, or UC capabilities grows. For example, ShoreTel Director is a convenient web-based tool that gives administrators a single-screen view of the entire ShoreTel system. Administrators can manage voice routing, voic , auto-attendant, conferencing, instant messaging and basic automated call distribution capabilities for every site.

10 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 10 Factor in the Cost of Downtime No dial tone is serious business. When the phone system goes down, business is disrupted, revenue is lost, employees are unproductive and IT goes into fire-fighting mode. Businesses need a phone system that will deliver the highest levels of availability and service. ShoreTel is designed to deliver percent reliability and 100 percent peace of mind. ShoreTel s distributed voice architecture and redundancy gives businesses the flexibility to deploy an IP telephone system in whatever configuration they desire. A business can still operate normally, even if a part of the network experiences an outage.

11 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 11 Get the Best Deal To get the best deal for a UC phone system, it s essential to get a full understanding of costs and cost structures. Using a dynamic cost model makes it easier to get an accurate picture of costs. ) Think beyond the initial purchase Extend the TCO analysis beyond the initial capital costs, maintenance and software upgrades. Understand the full cost of labor required to manage unified communications. ) Factor five years out Operational costs should drop as employees gain expertise and kinks are worked out of the systems. ) Negotiate When you negotiate, be sure that you get the best price for continuing maintenance costs, as well as one-time capital and licensing costs. ) Leverage Nemertes cost model data 3 Obtaining capital cost data through RFPs is relatively straightforward, but getting implementation and operational data without using the product or service is much harder. Nemertes has gathered this data, so be sure to use it. 3. True Cost of Ownership for Unified Communications: How Vendor Selection Impacts ROI, Nemertes Research, July 2015

12 HOW TO DETERMINE TCO FOR IP TELEPHONE SYSTEMS 12 ShoreTel Connect: Brilliantly Simply UC with Low TCO ShoreTel Connect is a scalable communications system that offers: ) One platform for a single user experience ) Two delivery options: as a service or as a product ) Three deployment options: CLOUD, ONSITE or HYBRID ShoreTel Connect CLOUD Your company subscribes to fully hosted and managed UCaaS. ShoreTel provides UC phone systems that are easy to deploy, use, manage, scale and maintain. Whether you choose a cloud or onsite solution or mix deployment types within your single phone system you ll get a more agile system at a low total cost of ownership. ShoreTel Connect s single platform for CLOUD, ONSITE and HYBRID phone systems simplifies how you deploy, manage and maintain unified communications no matter how many sites you serve. Whether you choose a managed cloud communications service, an onsite communications system, or a combination of the two, ShoreTel Connect delivers the same outstanding features and user experience to your entire team. ShoreTel Connect ONSITE Your company owns, maintains and controls your ShoreTel system. ShoreTel Connect HYBRID Your company combines onsite and cloud deployment features.

13 For more information visit shoretel.com or call ShoreTe(l) ( )

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