Do you know the total cost of your business phone systems? Most organisations don’t and it’s not surprising – running your phone systems is one of your largest and most unpredictable business costs. Phone equipment, lines, calls, mobiles, fax, conferencing and support are often delivered by separate providers who send their bills at different intervals and in different formats; and many with a variable cost element.
Organisations that are considering switching from a traditional phone system to a modern cloud phone system often find it hard to make the cost comparison as the billing model is quite different. Here’s how to calculate the cost of a traditional phone system versus a cloud phone system, so you can make the cost comparison:
How to calculate the cost of a traditional phone system
A traditional phone system includes equipment that was purchased upfront (Capital Expenditure) combined with ongoing monthly bills (Operating Expenditure) for rental, services and support.
You can calculate your capital expenditure costs by adding equipment such as PBX, phones and other one-off expenses and spreading them over the life of your current solution to achieve an annual figure. Add the costs of all other regular billing, such as, quarterly phone and fax line rentals, broadband billing on top of your normal internet service provider, equipment rentals, calling costs, freephone numbers and conferencing service.
Don’t forget to add your mobile bills and charges for upgrades, support and technicians, to achieve a total average bill for the year.
How to calculate the cost of a cloud phone system
A cloud phone system is based entirely on an operating expenditure model with a fixed price monthly bill, as the service is provided over the internet so there’s no capital outlay for equipment. It’s quite simple to work out your costs as there is a fixed price and monthly bill per user that you total for the year. The bill includes porting your numbers, services, call minutes and support. Also, the total number of landline and mobile minutes can be shared across your users to keep costs down and you can add rental IP phones to the bill to keep your entire business communications to operating expenditure.
Cost comparison between traditional and cloud phone systems
It’s not uncommon for businesses to find there’s a potential 60% cost saving on moving to the cloud. Plus, phone equipment, lines, calls, mobiles, fax, conferencing and support can be delivered by one provider, saving you time and resource, as you don’t have to juggle multiple suppliers and bills.
If you want to find out how you can save money by moving to the cloud, the RingCentral team can provide you with a free bill analysis service.
Originally published Jun 17, 2014, updated Aug 07, 2020