The case for SIP trunking: Calculating ROI

Posted on November 10, 2014 by

One of the most enticing qualities of SIP trunking is the opportunity for organizations to cut their telecommunications by as much as 80%. But even when the economics are an obvious slam-dunk, your CFO still wants a business case. Calculating the ROI of switching from TDM connections to SIP trunking is about more than just saving on call transactions. By building your case on following points, you can easily demonstrate a much faster ROI.


You mean we only pay for capacity we use?

There’s a saying that goes, “Why pay for the whole pizza when all you need is a slice?” Why is your phone system any different?

You don’t pre-order capacity. The channels are just there when you need them. And there isn’t a base fee for your connection. So you only pay for voice service that you actually use. Crazy concept.

Of course, the same can be said for your Internet connection; you’re not using all the bandwidth you’re paying for. When you implement SIP trunking for your business, you optimize your bandwidth consumption by merging voice traffic onto your data connection.

If you’re using T1s or PRIs, you’re overpaying for capacity. You probably only use a fraction of your full capacity most of the year. Run a test, hold the capacity you’re paying for up against how much you actually need by measuring your concurrent calls throughout an average day. My bet is you’re using less than half of what you’re paying for.

Looking into customer call records, we found wide variances between peak and average channel consumption. In one case, traffic was spiking as high as 57 concurrent calls, but the average capacity needed was only 11 channels. With a traditional setup, they’d need to pay for 69 channels (more six times their typical needs) all the time just to accommodate rare floods. But because they have a SIP trunking account from Flowroute, they only pay for capacity they actually use. Imagine cutting your phone bill by a factor of six.

Infrastructure gets downsized.

For organizations that have already installed an IP PBX, moving to SIP trunking eliminates the need for a VoIP gateway sitting between your switch and the traditional circuit-switched PSTN. Cancel the recurring maintenance fee for your gateway, and knock your equipment lease off the books. Not only is your phone architecture less complex, the simplification contributes to the economic win and therefore your business case.

You take control of your telecom spending.

SIP trunking allows you to better utilize native capabilities of your IP PBX to drive savings through the use of multiple carriers. Your IP PBX can be configured to find the most cost effective route for your outbound international calls. In case you’re unable to find a SIP trunking carrier that offers the most competitive rates to the destinations you need, you’ll be able to configure secondary providers as the lowest cost route for calls to a destination they’re able to offer a particularly low rate on.

You’re also in control of your call data. With SIP trunking as your voice connection, you can access up-to-the-second CDRs online. Investigating out of the norm usage and tracking departmental spending becomes incredibly easy. Accounting will sing your praises for helping refine their picture of cost and profit centers. How many hours will they save each month? Tell them how SIP trunking makes billbacks simple, and they’ll probably build your case for you.

SIP trunking drives productivity.

SIP trunking doesn’t only carry voice. It lays the foundation for the integration of countless other communications technologies like video, presence, and remote whiteboarding. When it’s time, your network will be ready, eliminating much of the cost of future implementations.

Also, because SIP trunking can be used over any authorized connection, remote and mobile users can be in contact over company lines from anywhere. They’ll be more efficient being able to receive and make calls on their laptop softphone, or mobile device. SIP trunking also powers important productivity features that come with your IP PBX or Unified Communications platform such as Find Me/Follow Me. Productivity will certainly climb by making your key producers more available. Is that benefit in your business case?

Quantifying your ROI.

Run a few quick numbers, and you’ll no doubt find ample justification for the move to SIP trunking. Of course, don’t forget to mention the per-minute rate is substantially less than what you were paying before, and that your local calling radius includes just about every rate center in North America.

The fact of the matter is, the switch to SIP trunking is a no brainer. You can lead the charge to a more productive workforce with a robust communications platform that will carry your organization into the future. And you can do it all while saving thousands of dollars.