Budgets are flat. Staffers are overworked and overstressed. IT executives can be forgiven for wanting to take a pass on emerging technologies.

But IP telephony should not be one of them. Companies that have test-driven the technology report significant cost savings as well as improvements in productivity and mobility.

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Listen up, vendors
When the voice-over-IP wheels start turning

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Generally, voice-over-IP (VoIP) cost savings fall into three categories: less-expensive moves, adds and changes (MAC); lower bandwidth costs; and reduced personnel.

Big MACs

Some companies have justified VoIP rollouts entirely on the basis of MAC savings. Others might have dismissed the idea because MACs are part of an existing PBX maintenance contract or because they have employees who do nothing but handle MACs.

But significant savings can be found in all these scenarios by running the numbers. First, calculate the cost of each MAC. If they're outsourced to telephone companies or contractors, this is a fairly easy number to find. Typically, companies spend from $55 to $295 for each MAC, with the average of $119, based on Nemertes Research's recent survey of 42 large companies.

If MACs are performed in-house, calculating the cost can be more challenging, but it's still attainable. Determine the average salary of the people performing the MACs and how long it takes them. Nemertes found the cost ranges from $37 to $90.

A PBX MAC takes an average of one to two hours, depending on the complexity of the change, the amount of time it takes the staff member to get to the necessary locations, and the level of expertise. For a voice technician with PBX training, that amounts to $37 to $45 per one-hour MAC and $74 to $90 per two-hour MAC.

Second, determine how often employees move per year. On average we found that companies perform 0.87 MACs per employee, per year. That means each employee changes offices, leaves the company or is replaced roughly once a year.

Then do the math to get a rough idea of the total MAC costs per year. One firm that Nemertes worked with had costs as high as $20.9 million. Organizations that outsourced their MACs spent on average $4.35 million. Those that handled the task internally spent an average of $1.34 million to $3.26 million, according to the Nemertes study, which focused on large companies with an average of 41,472 employees.

Once IP telephony is implemented, many companies hand off MACs to help-desk support or other IT staff, which reduces the total time needed to about 15 minutes. In that case, per-MAC costs drop to between $9.25 and $11.25 per hour. Because those highly trained voice technicians are no longer needed for MACs, companies can opt to reduce headcount or reassign those staff members to other areas.

One financial-services company runs its voice traffic entirely on IP telephony, and the CTO recognizes that MACs are much easier than they were with traditional PBXs. "We no longer need to go into a closet; we can make the change from any network-based PC," he says.

Two staff members - an infrastructure manager and a server technician - handle the MACs, which take about 15% of their time overall.

Some IP telephony solutions can reduce the move/change part of MACs to virtually zero. Presuming a company uses all IP phones (some use analog or digital phones with IP PBXs), end users who switch offices can take their phones with them, plug them in and logon, or they can log on to the existing IP phone in the new office. That eliminates the labor part of moving an employee, though the phones cost about $400 (lower-priced models are available for about $200).

That's one element of success The Seattle Times discovered with its IP telephony implementation. Before rolling out its Avaya  IP telephony system, the company allowed one to three days before a move order was completed. "Now, users just pick up their phones and plug them into any red jack to make it work," says Thomas Dunkerley, communications manager.

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