By Wayne Webers, Veramark Sourcing and Contract Negotiations Manager
Many organizations with a focus on telecom expense management are investigating Session Initiated Protocol (SIP) trunking as an alternative telecom delivery system. In addition to getting rid of all those thick bundles of multicolored wires, most telecom experts agree that SIP trunking offers significant potential advantages: improved utilization of existing bandwidth; ease of expansion; improved system availability, and lower operating costs.
The big question everybody seems to be asking is
“How much can I really save with SIP trunking?” Service providers want you to think that you will always realize substantial savings with SIP, and many provide online savings calculators to support their claim. But...
If it sounds too good to be true…
The truth about these online SIP savings calculators is that they can be somewhat biased. Many are built on the assumption that your telecom system is over-trunked by 40 to 50% and that you haven’t done a good job of “grooming” your network. They also generally assume that you are planning a centralized network instead of a distributed network, since a centralized network will deliver the greatest savings on concurrent talk paths.
These calculators offer limited opportunities to input data that would help clarify your organization’s SIP savings potential. For example, they may offer a company size selection of small, medium, or large without providing any further definition. Some allow you to input your current rates, others don’t. Some calculators include only three variables: number of employees, number of locations, and percentage of long distance calls that are intra-company. We have performed tests on these calculators – we found that they are strongly biased toward the number of locations and may not accurately forecast your savings.
A more thorough analysis is needed
To accurately forecast your potential SIP trunking savings, we’re convinced that a more complete analysis is needed beyond what you can get from these free calculators. When analyzing the impact and cost benefit of a SIP implementation, we look at 17 important variables. All of these can impact the overall cost of a SIP solution:
- Existing Capacity (Kbps)
- Busy Hour Minutes
- B/W Fat Factor
- CODEC Used
- Voice Usage Rate – Local
- Voice Usage Rate – LD Intrastate
- Voice Usage Rate – LD Interstate
- Existing Data Access Cost per DS1
- Local Usg Mix %
- Interstate Usg Mix %
- Local Measured Rate
- Busy Hour to Monthly Factor
- Busy Day % of Month
- On-net %
- Minute Allowance per Concurrent Trunk
- Overage Rate per Min.
- Charge per Concurrent Trunk
SIP trunking CAN many organizations a substantial amount of money, but beware of the exaggerated projections delivered by these free online calculators. You don’t want to be the guy who assures your CFO that SIP will deliver 50% savings when the real number turns out to be 20%. Not that 20% savings is bad – actually, it’s substantial and most CFOs would jump at it…unless someone promises them 50% first!
LEARN MORE – Watch our on-demand Webcast “Consider SIP Trunking IF…”
DISCLAIMER: Veramark Technologies, Inc. does not guarantee the authenticity, accuracy, appropriateness, or security of any hyperlinks contained within this posting.
Thank you for another essential article.
Posted by: Naomi | 01/20/2012 at 03:00 AM