More and more companies are switching to VoIP (Voice Over Internet Protocol) for their office phone system, but is it right for your business?

First, let’s explain the basics of VoIP. It takes the analog audio signals used in telecommunications and converts them to digital data that can be transmitted through the internet. As long as you have a broadband connection, you can make calls, and it works with both desk phones and cell phones.

There are two basic options with VoIP: standard VoIP and hosted VoIP. With hosted VoIP, the system operates in the cloud instead of through hardware on-site at your office. Like most other hosted services, that means your hosted VoIP provider is in charge of the equipment, updates, security, etc.

Here are a few ways that hosted VoIP could save you money.

Minimal maintenance fees

Sometimes phone systems fail. Your business does not want to be without its phones, which means maintenance costs can be high for traditional phone systems when they fail. With hosted VoIP, the maintenance is covered as part of your contract, and it can be easier to get the system back up and running quickly.

Upgrades at no extra charge

If you have a traditional phone system in your office, any sort of change or upgrade is going to require a service call from your provider to install new hardware. And that’s probably going to cost you money. With hosted VoIP, upgrades are easily made through the cloud.

No major hardware investment

Traditional phone systems require a lot of hardware, and we’re not just talking about the phones you see sitting on the desk. Typically, a hosted VoIP solution requires much less hardware, as long as you have the network infrastructure and internet speed to support it. Most VoIP systems can work with your existing desktop and cell phones, so you’re not stuck buying new handsets either.

When is VoIP not the right answer for a business? Let’s take Joe as an example. He switched to VoIP phone service because he read an article that said it was a great way to save money and there was no major upfront investment required. Sounds like a deal, right? Except that VoIP runs off the same network as your computer and other devices using data, which means it requires a decent amount of network speed.

After he switched to VoIP, Joe had to upgrade his monthly package with his internet provider and buy a new router to make everything work correctly. That money he thought he was saving by switching to VoIP? He still spent it, just on increased internet speed and an upgraded router.

The moral of the story? Have an IT professional assess your network and your internet setup before you decide to switch to VoIP. They can also help you determine if it’s right for you and budget for any expenses related to the new service.