Voice over Internet Protocol, or VoIP, is a term used to describe the transmission of telephone calls using a data network, rather than over traditional phone lines. It is a simple concept, but one that is having a very significant impact on the world of business communications.

VoIP is itself enabled by a much broader technological evolution, namely the convergence of multiple forms of communication, including voice, video and data, into a single network. This transformation is creating a revolution in the way communications works, and it has the potential to offer major benefits to your business. VoIP can help your company grow by broadening your communications capabilities, it can save you money on your telecommunications costs, and it can enable more productivity, mobility and flexibility in your workforce.

Many small businesses around the world are already benefiting from the advantages of VoIP systems, many of which are well suited to these kinds of organizations. Here are some examples of why VoIP is making a major impact on business communications for small businesses:

• VoIP provides the ability to use an integrated voice and data network at a lower cost than the separate parts.

• VoIP offers the small business communications capabilities on a par with the largest of companies.

• VoIP can open the door to new services and applications for the small business that can drive additional revenue and help cope with expansions in customer demand.

• VoIP can lead to increased employee productivity by giving employees a more flexible means of communicating and allowing more mobility, while increasing the flow of information.

There are different ways for small businesses to take advantage of the benefits of VoIP. An upgrade to an existing phone system, when available, can allow VoIP communications between different locations, without any major disruption to the infrastructure in each office. Alternatively, a new VoIP system can be purchased to replace an old phone switch and open up new capabilities. Yet another option is to pay monthly for a Service Provider to provide a hosted VoIP system, without buying any capital equipment at all.

Small businesses are often good candidates for VoIP systems, and have represented a majority of the early adopters of technology. While large companies have complex networks, with a multitude of different phone systems that can be difficult to integrate into a single converged network, small companies' networks are more straightforward, allowing an easier transition to VoIP.

However, some small businesses have found that there are complexities or difficulties that get in the way of them maximizing the impact of the new technology. Lack of good advice, a misconceived plan or a deployment by inexperienced personnel can all led to problems.

The keys to a successful transition to a VoIP based network start with a clear understanding of the business case behind it and an implementation plan that best fits the company’s overall objectives.

There are certain circumstances, however, where VoIP is likely to have a more significant impact than others. If your company is in one or more of the following situations you will tend to get a faster payback:

• expanding and need or likely to need larger offices.

• have a significant percentage of employees that travel on business or work full-time or part-time from home, using laptops.

• making acquisitions and need to integrate with other business.

• have international offices.

• have a growing volume of incoming calls.

• have not replaced or upgraded their phone infrastructure in the last 5 years.

• have a good penetration of Ethernet cabling and have communications equipment that is less than 3 years old.

• operate in an industry with dynamic competition where strong customer service levels are essential.

Overall, VoIP based phone systems offer great potential for small companies and can help to keep costs under control while growing a successful business.

Nick Pegley is President of smbINFO Inc (http://www.smbinfo.com) a technology information services company specializing in the needs of small businesses. With more than 20 years of experience in the networking, telecommunications and small business markets, Nick has seen first-hand how small companies can use technology to become more competitive, more responsive and more profitable when they know how to use it correctly. Nick is a regular speaker at small business events, including the US Federal Small Business Association Annual Convention, VAR Business Channel events, and numerous vendor and reseller conferences.