What Are the Hidden Costs of Your Existing Voice Infrastructure?
Your previous stance on “growth at all costs” has likely shifted due to the latest economic climate. It seems the new rally cry is “better…faster…cheaper.”
This may seem like an impossible task– keeping telephony operations growing while also trying to find cost-saving opportunities to reduce your Total Cost of Ownership (TCO) on your legacy voice infrastructure.
But, it’s not!
There’s a surefire way to scale your contact center voice without ditching your on-premise call center voice solution. Below, we’re uncovering the hidden costs of your legacy infrastructure and what you can do to minimize your voice costs while maintaining growth.
The Four Components of Total Cost of Ownership
Your TCO directly aligns with your organization’s growth and expansion goals. Effective TCO management can help you achieve better, faster, and cheaper contact center voice operations.
Understanding the components of Total Cost of Ownership is the first step.
TCO is made up of 15% direct (or visible costs) and 85% indirect (or invisible costs). While direct costs are more apparent and easily quantifiable, indirect costs are often overlooked but have a significant impact on overall expenses. See the breakdown below:
1. Acquisition Costs (direct)
Acquisition costs are direct expenses associated with acquiring the necessary tools, technologies, equipment, or services to support your call center voice channel.
When thinking about acquisition costs for your voice infrastructure, these may include costs such as:
- Legacy system hardware
- Phone lines and cables
- Computers and laptops
- Deskphones, mobile devices
- SIP gateways
2. Operating Costs (indirect)
Operating costs are indirect and ongoing expenses incurred to facilitate the use of the equipment. These costs include items such as:
- Integrations and applications
- Licensing (infrastructure, platform, and software)
- Cloud services
- Compliance and regulation
3. Personnel Costs (indirect)
These expenses are associated with the workforce or personnel required to operate, manage, and support various aspects of the implementation of new technologies. Personnel costs can encompass the following elements:
- Salaries and wages
- Training and development
- Recruitment and onboarding
- Labor and maintenance costs
4. Interruption Costs (indirect)
Interruption costs refer to the expenses incurred due to system downtime, disruptions, or security risks that hinder the smooth operation of your contact center. Interruption costs can start adding up during events like:
- IT system failure/breach
- Power outages
- Phone fraud attacks
As a leader of your global voice operations, it’s more important than ever to evaluate each of these components of your current infrastructure so you’re not overpaying for your contact center voice solution. By breaking down the true amount of your on-premise voice cost, you can identify the financial impact it’s having on your budget– and compare it against cost savings opportunities like cloud voice.
Hidden On-Premise Voice Costs Eating Away at Your Budget
When considering the Total Cost Optimization (TCO) of your current voice infrastructure, the easiest place to start is with direct acquisition costs since they are tangible. But it's essential to recognize that acquisition costs are just the tip of the iceberg.
While the initial expenses of acquiring the necessary telephony equipment may be straightforward, many organizations overlook the associated costs that arise throughout the lifecycle of their voice systems.
These additional costs can significantly impact the overall TCO. Here are some commonly overlooked cost factors:
1. International Calling
International call charges are generally more expensive when using a legacy on-premise voice solution. These inbound and outbound rate charges can accumulate rapidly and significantly impact your contact center voice budget.
2. System Maintenance and Upgrades
On-premise voice systems are typically complex and require ongoing maintenance, upgrades, and patch updates to ensure smooth operability. This requires a significant amount of IT personnel oversight of the system and the call traffic making its way in and out of the contact center.
If your voice traffic increases, you may need to look into additional hardware and circuit investments to accommodate the growing demand.
3. Integrations and Customization
Enhancing your legacy voice system to meet evolving business needs may require more hardware and support to get it up and running correctly. You might even require consultancy services to implement new tools for seamless integration and customization.
These efforts can incur additional fees, especially when linking your voice infrastructure with UCaaS and CCaaS business applications you use every day.
4. Downtime
Legacy voice systems are more susceptible to call traffic issues and security vulnerabilities because of their limitations, which can lead to increased downtime. And that downtime may have financial repercussions because of network congestion and unsecured communications.
5. Service Support
Managing voice services in different countries can be challenging due to local regulations and communication setups. It likely requires the presence of in-country staff to ensure compliance, address legal requirements, and manage local service providers which can add up quickly.
6. Server Housing
When organizations maintain contact centers in multiple locations, housing servers is a major expense. The costs encompassing this need required by legacy voice infrastructure include:
- Server procurement
- Installation
- Maintenance
- Cooling
- Power supply
- Physical security measure
7. Training
Efficient use of the voice infrastructure requires training sessions so your employees can familiarize themselves with the system's features and functionality. Training costs, including materials, instructor fees, and employee ramp-up time, all make up your TCO.
Consider these often forgotten but essential cost factors that enable organizations to make informed decisions and develop a comprehensive cost optimization strategy for your contact center.
Maintain On-Prem Voice Growth Responsibly
By understanding the full scope of expenses associated with on-prem voice infrastructure, you can explore alternatives, such as a cloud-based voice solution, that offer cost efficiencies and alleviate many of these hidden TCO costs without having to divest your legacy systems.
You can start that discovery here. Learn how to minimize acquisition expenses, streamline operations, and effectively manage hidden costs to save your organization money with our Reducing Costs in Your Global Voice Infrastructure ebook.
When you’re ready to elevate your phone system, see how adopting a cloud-based voice solution (like the AVOXI Platform) can help lower TCO, improve scalability, and enhance business agility.
eBook
Reducing Costs
in Your Global Voice Infrastructure
Modernizing your on-premise voice in the cloud reduces TCO, so you can scale and grow your market coverage. Get the eBook and lower voice spending.
