Investment and Costs

Topics: Investment, Rate of return, Net present value Pages: 13 (2464 words) Published: March 6, 2005
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IT Business Case Template:
Voice over Internet Protocol (VoIP) Solutions

General Introduction
Voice over Internet Protocol (VoIP) is one benefit of the convergence between data and telecommunications. Companies today are seeing the value of transporting voice over IP networks to reduce telephone and facsimile costs and to set the stage for advanced multimedia applications and services such as unified messaging, in which voice, fax, and e-mail are all combined.

[Include description of selected VoIP product(s) or solution(s) here, including features, benefits, etc.]

This business case explores the opportunities and benefits that can be realized in the deployment of VoIP product(s) or solution(s), as well as the costs and associated risks involved. However, the template may need customization. Each organization is likely to have unique challenges and opportunities that the business case should address.

Key technical and business objectives for VoIP:
A.Tangible goals or objectives
•Lower recurring transmission charges
•Deploy integrated voice-and-data applications
•Reduce operating costs
•Consolidate accounting systems
•Reduce cost of owning two separate networks
•Enable new features, services, and capabilities
•Reduce customer churn
•Reach new customers
•Impact and benefits from deploying VoIP
oDetermine number of employees who send and receive voice and data services oProvide expanded set of services with new and higher-value offerings oIdentify risk factors

•Systems affected upon deployment of VoIP
oDefine project size and market opportunity
oManage complexity of technology
oIncrease bandwidth allocation
oSelect proper standards
oInteroperate with other vendor systems
oImprove latency
•Executives looking to expand market opportunities
•Managers who want to maintain high level of customer satisfaction and reduce customer churn B.Secondary
•End-users like employees that communicate with co-workers, business partners, and customers III.Alternatives
A.No change
No change may be the best option if there is no strong demand for voice and data convergence services.

While the cost for the VoIP service is eschewed, other costs may be incurred: •Inability to deliver expanded services to customers
•Lost productivity of employees

2.Return on savings
Savings can be derived from the following:
•Based on the costs, the potential return on investment for not implementing VoIP may be zero or a negative number

•Risks include those mentioned in the "cost" section
•Higher cost of phone call charges in the future
B.Delay Procurement/Implementation
While the cost of VoIP is postponed, other costs may be incurred: •Costs may be similar to a No Change alternative. However, these costs will decrease once the service is implemented at a latter time

The short-term savings of not implementing VoIP are weighed against the costs of waiting and avoiding other costs to determine length of time to break even and see a return on the initial expenses. •Several implementation timelines may be used to show the incremental costs of waiting shorter or longer periods

•Future VoIP services may have higher costs if implemented •Future VoIP technology may not be compatible with current hardware therefore purchase of hardware will be necessary C.Outsourcing
List possible vendors for outsourcing services. Solutions may be layered and come from multiple vendors, or may be a single solution from one vendor. For each vendor, consider:

•Initial and monthly/ annual costs paid directly to the service provider for proposed solutions •Cost of ongoing maintenance
•Costs related to make existing hardware or software compatible, such as upgrades, replacements, reconfigurations, and additional telecommunications tools/...
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