There’s more to calculating the total cost of ownership (TCO) for communications systems than you might think. Here’s what you need to know and how unified communications as a service (UCaaS) can drive your communications TCO down.
Most companies already know that the benefits of moving to an agile and scalable cloud-based communications system far outweigh the advantages of a legacy phone service. However, it can be difficult to determine whether the total cost of ownership for your cloud-based solution can match your expectations for an on-premises legacy system.
For on-premises solutions, common outlays come in the form of things you can physically see and touch, like the PBX hardware you purchase. However, there may also be additional expenses hidden beneath the surface of an on-premises offering that today’s companies are failing to consider.
The true costs of an on-premise PBX
Businesses nervous about moving to the cloud often suggest that budget is a major reason for their decision. However, the truth is that the cost of a PBX system actually goes beyond the initial expense of hardware. In-depth cost rollup analyses reveal costs like:
- Upgrades, maintenance, and training for PBX systems: Expenses from licence fees, installations, network upgrades, and additional extras can quickly add up to a significant extra expense. What’s more, as legacy systems add new functionality, they require more highly-trained support personnel to maintain software and hardware and roll out regular system upgrades.
- Telecom costs: Legacy systems require bonded T1s, PRIs, and other trunk links to connect the PBX in the building to local telcos.
- Stand-alone services: Most legacy on-premises solutions can’t offer a full unified cloud communications solution by themselves. Costs for these services must come through third-party vendors, which can add up to substantial extra fees.
- Connecting locations: Even companies without multiple locations to support may have a dispersed workforce that they need to help. Bandwidth-intensive communications between buildings and sites can cause IT headaches and budgetary problems. What’s more, the presence of a wide selection of hardware can be an IT management nightmare.
The lack of future-proofing can be a common TCO issue for companies considering keeping their system on-premises.
The flexibility, simplicity, and potential of UCaaS mean that it's the ultimate solution for companies that want to reduce TCO and prepare their businesses for the future. Click To Tweet
UCaaS could be the answer
Replacing the unpredictable and often expensive on-premises communications strategy with an all-inclusive solution such as RingCentral Office® gives companies the advanced and fundamental communications solutions that they need, combined with the flexibility and scalability required to evolve in the future. Cloud phone systems:
- Provide everything you need for communications and collaboration in one solution: Features include meetings, audio and video conferencing, text, and team collaboration.
- Allow for lower multi-site management costs: Anyone can add or remove phones or numbers in a system.
- Reduce IT infrastructure and maintenance: Because RingCentral handles everything in the “as a service” model, operational expenses are minimised.
- Eliminate telephony costs: Remove several line items like switches because UC traffic travels over the internet.
- Increase worker productivity: Enhanced features and capabilities mean that workers can get more done, leading to improved revenue for the company.
- Reduce up-front and ongoing costs: Phones can be rented with a pay-as-you-go model, and RingCentral handles all the updates to your phone system for you.
- Minimise mobile workforce cost: Supporting a mobile workforce is easy with the RingCentral mobile app, which turns any smartphone into a fully featured office phone.
The flexibility, simplicity, and potential of UCaaS mean that it’s the ultimate solution for companies that want to reduce TCO and prepare their businesses for the future.
Originally published Oct 23, 2018, updated Apr 02, 2019